RFID tags can be powerful solutions to labor shortage, supply chain control

A growing number of Japanese companies have been carrying out demonstration experiments introducing self-checkout cash registers and unmanned stores in recent years. The moves gained impetus from an initiative launched two years ago by the Ministry of Economy, Trade and Industry (METI), which came out with a “Declaration on 100 Billion Electronic Tags for Convenience Stores”. This encourages convenience stores to attach RFID (radio frequency identification) tags with an embedded IC chip and antenna to all goods they sell by 2025. The number of goods handled by such stores across the country is estimated to reach 100 billion in that year. The introduction of RFID tags is expected to help ease the country’s chronic labor shortage through an enhanced merchandise management and inventory control.


 RFID tags are already widely used in daily life in the form of prepaid transportation IC cards. However, convenience stores have been unable to use them because of their high production cost. METI plans to promote mass production of such tags through financial support to companies that develop them in hopes of cutting the unit production cost to less than 1 yen from around 5 yen at present.


RFID tags are expected to be used in the future in the supply chain, a logistics system that covers all processes from procurement of raw materials and production management to distribution and marketing of products. By putting RFID tags to goods, manufacturers and distribution centers can record data on incoming and outgoing deliveries, accumulate them in their information sharing system and visualize inventory information. RFID which can contain a huge volume of information will allow for seamless merchandise control from production to marketing.


Furthermore, the use of RFID tags will allow shops to get data on a number of goods in a shopping basket all at once without reading barcodes on an item-by-item basis, which will make their inventory control easier and enable customers to cut the time needed for their payment. Shops will also be able to change the prices of goods in accordance with their expiration dates with greater ease.


Budding fashion brand GU has already introduced self-checkout machines based on RFID tags at some of its stores. Customers visiting the stores can quickly finish their payment by just putting everything they want to buy into a box of the machine which counts the number of items and read their prices. Such operation is possible because the box instantly reads the data embedded in the RFID tag attached to each item.


Apart from its high production cost, the RFID tag has some disadvantages. Its recognition rate degrades when it is attached to liquid, metal and aluminum foil. It is also vulnerable to heat and cannot withstand a microwave oven. However, if these are overcome, RFID tags will surely prove effective in easing the staff shortage through greater efficiency in the supply chain.

(Written by: Kairin Ka)


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