Cycle Counting with RFID: Definition, How it Works, and Applications

In logistics, manufacturing, and retail, accurate inventory data is the foundation of operational efficiency. One common method used to ensure accurate stock data is cycle count, which is the process of periodically counting some stock items to ensure consistency between system data and physical conditions. However, manual methods such as barcode scanning are often slow and have a high risk of human error.

Technology UHF RFID (Ultra High Frequency Radio Frequency Identification) present as a solution that allows the cycle count process to be carried out quickly, accurately, and in real-time without disrupting daily operational activities.

Understanding Cycle Count

Cycle counting is a method of counting stock incrementally and continuously, in which a certain number of items are counted at specific intervals without having to stop all warehouse or store operations. Its main purpose is to maintain inventory accuracy and detect shrinkage early on and ensure stock visibility is always up-to-date.

With the implementation of RFID, each item is tagged with a unique electronic EPC code (Electronic Product Code), which can be read without direct contact. The cycle count process can be performed using a handheld RFID device, which can read hundreds of tags in seconds. This makes RFID much more efficient than barcode methods, which require individual scanning.

Function

RFID has a variety of functions to support cycle counting and inventory management. Here are some of them:

1. Automation of the Counting Process

RFID allows mass reading of items without line of sight, reducing the time and effort required during the cycle count process.

2. Increased Inventory Accuracy

Each tag has a unique identity, thus minimizing data duplication and increasing stock accuracy to above 99%.

3. Faster Shrinkage Detection

With real-time readings, discrepancies between physical and system stock can be immediately detected to prevent further losses.

4. Operational Efficiency

Cycle counts can be performed while operations are underway without the need to stop warehouse or sales activities.

5. Integration with ERP/WMS

RFID reading data can be directly updated to the inventory management system (ERP/WMS) for automatic synchronization.

Component

To run an RFID-based cycle count, several main components are needed:

1. Tag UHF RFID

Serves as a unique identity for each item. It can be in the form of a label, inlay, or special tag depending on the product material.

2. Reader and Handheld RFID

A device for automatically reading tags, either in the form of a fixed reader or a handheld reader.

3. RFID antenna

Transmits radio waves from the reader to the tag. Antenna placement affects the reading area and accuracy.

4. Middleware and Software

Manage RFID reading data, filter out duplications, and send validated information to the main inventory system.

How it works

The cycle count process with RFID begins with installing RFID Tag on each item in the warehouse or store. Each tag stores unique data linked to the product SKU in the ERP/WMS system.

When a cycle count is performed, the operator uses an RFID handheld reader to scan a specific area. The reader will read all tags within the handheld's range and then send the data to the middleware for verification. The middleware then compares the reading results with system data. If any discrepancies are found, the system will notify the team to conduct an immediate inspection.

This process allows stock audits to be conducted more quickly, accurately, and repeatedly without the need to stop daily operations.

Advantages

This technology offers various advantages in increasing the efficiency and accuracy of stock management.

1. High Accuracy

Each RFID tag has a unique code that ensures no items are double counted or missed.

2. Time Efficiency

RFID allows cycle counting to be done up to 10 times faster than manual barcode scanning.

3. Minimal Operational Disruption

Cycle counts can be performed at any time without disrupting production or sales activities.

4. Real-Time Visibility

Stock data is always updated automatically so that decision-making is faster and based on actual data.

5. Scalability

RFID systems can be implemented from small warehouses to multinational supply chains with cloud integration.

Disadvantages

Despite the many advantages, there are several things that need to be considered in implementing RFID.

1. Initial Investment

Costs are required for tags, readers, antennas, and system integration.

2. Environmental Interference

Metallic materials and liquids can interfere with RFID signals, so the system design needs to be adjusted.

3. Data Management

Bulk reads can generate large amounts of data that need to be managed with efficient middleware.

4. Process Adaptation

Employee training and SOP updates are required to ensure processes are consistent.

Applications in Various Industries

This technology is now used in various sectors because of its ability to increase efficiency and data accuracy.

1. Retail

RFID helps with daily stock checks, speeds up replenishment, and maintains product availability on shelves.

2. Logistics & Warehouse

Speed ​​up the stocktaking process, increase data reliability, and detect losses during storage or shipping.

3. Manufacturing

Supports the accounting of raw materials, components, and finished goods without disrupting the production line.

4. Healthcare

Ensuring the availability of medical devices and medicines with fast and accurate stock audits.

5. Automotive

Optimize spare parts control and ensure inventory accuracy on the assembly line.

Conclusion

Cycle counting is a crucial activity for maintaining accurate inventory data and detecting shrinkage early. With UHF RFID technology, this process can be done more quickly, accurately, and efficiently without stopping operations.

RFID helps companies increase team productivity, reduce audit costs, and accelerate real-time data-driven decision-making.

As an end-to-end RFID solutions provider, TUDI is ready to help you in designing an RFID-based cycle count system that is efficient, accurate, and integrated with an ERP or WMS system. Consult our needs with the TUDI team of experts to get the best solution for your business.

Read Also: UHF RFID: Definition, Types, How it Works, Components, and Applications