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How to Implement RFID in the Automotive Supply Chain

How to Implement RFID in the Automotive Supply Chain

As average per capita income continues to increase, revenue for the automotive industry is constantly rising. However, competition is growing persistently in the industry. Also, price competition within the sector is limiting profits for automobile companies. Therefore, to stay competitive, auto manufacturers are making sure that their operations are running efficiently. And they are minimizing wasting resources. Handling the logistics of the automotive supply chain and manufacturing process is complicated as automobiles demand thousands of parts. Where, many of which are sensitive and must be handled with care. That’s where incorporating radio frequency identification RFID in the automotive supply chain optimizes the manufacturing process of the industry.

Top auto manufacturers are implementing technology for keeping track of inventory flow and making sure that operations are running effortlessly. RFID in the automotive supply chain is enabling companies to effectively manufacture automobiles and pushing in competing with other automakers. The RFID-integrated supply chain is allowing manufacturers in identifying damaged parts as shipments are scanned along their journey. Furthermore, this is saving the manufacturer time and money. Since they can avoid installing a damaged component and can recognize opportunities to improve the supply chain in ways that mitigate damage events from taking place.

Thus, how are leading car manufacturers implementing RFID in the automotive supply chain to streamline their operations?

Following are four ways that RFID is revolutionizing how automakers produce cars.

RFID Shipping Solutions

In short, RFID supply chain technology is helping car manufacturers with the following:

  • Getting the correct inventory to the right place- RFID automation is allowing companies in tracking thousands of items per second with a range of up to 30 feet. Automated scanning is enabling companies in minimizing human error. As well as getting the right inventory to the right place effectively.
  • Tracking the directional movement of inventory – Tracking movement will be allowing warehouse managers for monitoring the forklift loads and managing the flow of inventory with greater flexibility.
  • Receiving real-time data on your inventory and where it is going – Real-time data is allowing auto manufacturing managers in making faster decisions

Also read: Use of RFID in Cold Chain Logistics to Boost Market Growth

Production Flow Tracking

One of the biggest challenges with auto manufacturing is ensuring that the proper components are at the relevant location in time. RFID in the automotive supply chain technology is helping operators throughout the automotive supply chain and making sure that all parts are at the right location so that production runs smoothly.

It can help logistics managers in tracking inventory through their global automotive supply chain to make sure that items are on schedule to arrive when expected and make adjustments in real-time if complications occur. Warehouse managers can also be using RFID technology for managing the flow of work-in-process (WIP) inventory within the manufacturing facility.

Non-conforming Materials (NCM) Management

Non-conforming materials are complicating production planning as inventory levels do not accurately reflect what is available for production. Therefore, manually sorting through defective and non-compliant materials can slow down production and can take several days to complete.

Hence merging an effective RFID tag system with NCM automation software can help in improving NCM management efficiency and reducing processing times by as much as 10 times. A good NCM automation system will facilitate tracking all data for each item regarding non-compliance, enabling easier data analysis and decision-making.

As non-conforming items are recognized, they can be rapidly disposed of or placed into the systematic workflow. Quick detection also enables manufacturers to attain suitable replacement parts more quickly so that production can start on schedule.

Lot Management

RFID technology is aiding in lot management by enabling operators to rapidly identify the correct vehicle, even when it is in a lot with hundreds or even thousands of other identical vehicles. Using RFID for lot management will be improving logistics and save time and costs by making it faster and easier for operators to find specific vehicles.

Also read: How RFID Improves Asset Tracking and Inventory Management


Aeologic Technologies can help automotive manufacturers and others along the supply chain mitigate inventory management costs, prevent production delays, and remove the biggest production headaches. To stay competitive in today’s automotive manufacturing industry, optimizing RFID in the automotive supply chain is a must. With RFID, you can efficiently track and manage your inventory and recognize where damage is occurring within your supply chain.


How RFID is applied in logistics?

E-commerce has augmented RFID technology in the logistics process because of the visibility and interactivity it offers, which translates into a better experience for the customer. Radio-Frequency Identification (RFID) enables us to identify and monitor products automatically.

Why do you think the focus of RFID should be on supply chain management?

Automate verification of shipments- RAIN RFID offers visibility into a warehouse so items can be tracked as they move in and out of a facility. When linked with internal systems that run shipping and receiving, businesses receive information that can automate even more features of the job.