RFID for crossdocking: Is it worth the investment?

The continual advancement and capacity of RFID technology is spurring a wide acceptance and growing interest in various entities in the supply chain. Its benefits, as opposed to the prevalent bar code, are enticing with myriad possibilities envisioned to attaining better operational efficiencies. In an era where product lifecycles and order lead times are ever decreasing and customer demands tenacious, more and more companies are considering the notion of RFID primarily in asset tracking operations. Our study is concerned with the application of RFID-based systems in a simulated crossdocking environment. A comparative analysis is made with the operational capabilities of bar code systems. RFID technologies has shown to be more effective in such a setup with a 55.1% potential increase in throughput and a decreased pallet staytime at incoming docks of 86.3%. Subsequently, a return-on-investment (ROI) analysis for deploying such a system was carried out based on a $0.05 profit per pallet. Potential returns of fixed capital can be expected in the second year.