Automatic Identification and Its Role in Warehouse Management

What is Auto-ID or automatic identification?

Auto-ID or automatic identification refers to the identification process of the appropriate stock keeping units (SKU) during a supply chain process, using technologies such as RFID, barcodes etc. Automatic identification technologies improve the accuracy of the SKU identification process up to 99.99%. This naturally reduces errors while performing certain supply chain operations, thus reducing rework and improving time efficiency. These technologies also help businesses enforce certain rules such as FIFO, LIFO or a combination of rules that are absolutely necessary for smooth running of operations. Some of the areas where Auto-ID finds its application are receiving, binning, picking and packing.

The process of automatic identification includes capturing external data via images, sounds or videos, converting it into a digital file and storing this file for later analysis. Auto-ID uses sophisticated IT infrastructure to manage the large amounts of data.

Prominent Auto-ID technologies                                      

Some common Auto-ID technologies in use are

1. Barcode

   This uses encoding the information of the package in a barcode. When a barcode is attached to a package, the information of the package travels with it. A two-dimensional bar code carries more information than a regular bar code.

2. Radio Frequency Identification (RFID)

   RFID has a definite advantage over bar codes as they transmit real time information of the position of the packages. With  RFID, there is also a two way communication. Information of a package is encoded on an RFID tag. The RFID tag constantly emits radio frequency waves that can be captured by a receiver with a RF antenna. On the downside however, RFID has been employed only by certain companies due to the high costs of the RFID tags.

3. Biometrics

   Biometric identifiers use the technology of identifying human biological information associated with a particular package. These include techniques such as fingerprint identification, retina scan, and face recognition and so on. Biometric identifiers can be used for identification and authentication purposes. They find wider application in security and human movement related operations.

4. Optical Character Recognition (OCR)

   This technology can be used to electronically translate images of handwritten, text-written or printed text into machine readable and editable form. For example, they can be used to read and interpret serial numbers which can be used for matching, tracking or sorting packages as they move through various supply chain processes. However, OCR technology is yet to improve in terms of accuracy and speed in its applications.

5. Voice Recognition

   Voice recognition is another important technology used in automatic identification. It is a process where voice and speech are converted to commands to carry out certain operations. To use voice recognition, analog voice must be first converted to digital signals and compared with the data already in the database to carry out a particular command. Like any other technology, this too has a flip side. Any noise apart from the intended voice signal can alter the command sequence.

Benefits of Auto-ID technology

There are numerous benefits of Auto-ID technologies. A few of them are listed below.

1. They help identify the right goods on time
2. Accurate data capturing helps in accurate forecasting resulting in lesser stock outs.
3. Improved count and visibility of stocks, leading to lower stock shrinkage.
4. Accurate data collection leads to accurate binning and picking.
5. Auto-ID also helps in reducing labor costs.
6. Application of automatic identification processes enforces picking rules such as FIFO, LIFO or FEFO so that correct goods are delivered to the customer.
7. Accurate information about the package can be obtained without physically opening the package.
8. Accurate package linking to a delivery order or invoice is possible.

Role of Auto-ID technology in Warehouse Management

Warehouse Management is a key area of the entire supply chain. The primary purpose of a WMS is to control various processes such as identifying the right goods from the point of reception, identification of proper storage locations, sorting, picking, and shipping of the appropriate goods. When it comes to a warehouse, there is a huge flow of products in, out and within the warehouse. WMS uses Auto-ID to effectively monitor this product flow.

In modern times, warehouse management is not limited to a single warehouse anymore. The inbound, outbound and warehouse processes have implications on production management of a particular product. Close monitoring of these products can send accurate information to the original equipment manufacturer (OEM) or even help in accurate forecasting of that product. In its simplest form, a WMS looks at collecting data of a package or a product, interpreting it and storing it on a central database which can be either a standalone server in the warehouse or an ERP suite. Here is an example of how an automatic identification technique can help in effective warehouse management.

Barcodes and barcode scanners can capture the data of an incoming part and assign it to the appropriate storage/picking location. It can also provide you accurate information about the inventory levels of a particular SKU. RFID systems can help you monitor the flow of products, collect the data and provide real-time transmission and synchronization to a central warehouse. It can also help in optimal utilization of the warehouse space and assets as well as improve the efficiency of warehouse logistics in the areas of receiving, storage, packing and shipping.

Auto-ID helps WMS in achieving the objective of optimizing the cost of order fulfillment in a timely manner by managing the resources economically.