BlogSupply Chain TraceabilityRFID chips can now be used in pallet level tagging.

Reactions across the supply chain to pallet level tagging through radio-frequency identification (RFID) are mixed. Logistics managers on the retail and distribution center side of the supply chain are excited about the technology, and have been for some time. Walmart notably tried to mandate RFID pallet level tagging in 2003 as one of the chain’s pallet requirements for vendors. At the same time, manufacturers of consumer packaged goods and groceries are more skeptical of the technology. They are set up to track products at the case level through barcodes and enabling pallet level tagging is an extra equipment cost and administrative hassle for them. 

The resistance of its vendors doomed Walmart’s original push for RFID pallet level tagging. However, pallet level tagging using RFID technology does have real advantages, and as a result, the technology has seen widespread, if slow, adoption by both retailers and manufacturers in the years since Walmart’s original push.

Where Barcode Case Tagging Falls Short

Bar codes have traditionally been used in tagging pallet loads.Manufacturers and retailers both track their inventories in the form of cases and individual consumer products using stock-keeping units (SKU). These are the same barcodes that are scanned when cartons are offloaded from the truck, when stocking crews place items on the shelf, and when customers check out at the register. 

Pallet level tagging provides a possible means of tracking products during transportation.

A major drawback of this system is that manually scanning barcodes is time- and labor-intensive. In order to keep up in today’s fast-moving supply chain, these barcodes are generally only scanned when the products leave the manufacturer and when the retailer scans them in at their final destination. The result is that manufacturers can’t really say with any accuracy where their products are once they’ve left the facility and before they’ve arrived at the retailer. And retailers can’t say with certainty where the products have been before they arrived at their distribution centers. If the need arises to trace the journey of a load of products due to an outbreak of foodborne illness or the industrial contamination of packaged goods, there is no ready way to do so. Pallet level tagging provides a possible means of tracking products during transportation. It can also help to maximize efficiency during daily operations.

The Advantages and Disadvantages of Pallet Licensing

Using a bar code scanner to read a pallet load.The chief advantage of pallet level tagging is the transparency that it brings to the supply chain as a whole with a relatively small labor investment. Instead of scanning each SKU on each carton, whoever is loading or unloading a truck simply has to scan or record a pallet level tracking number. When this information is logged into a database, it is possible to find out not only where a pallet of product currently is, but where it has been. There is a methodology that notionally already fills this purpose: the pallet license.

Licenses are attached to the pallet and can be lost, misplaced, or damaged so that they are no longer readable.

A pallet license is a sticker or a piece of paper that includes information about a pallet’s load, such as product type, quantities, and batch numbers. A common argument against RFID pallet level tagging is that it is redundant when pallet licenses already exist. However, pallet licenses do have some disadvantages such as:

  • Labor: To create a pallet license, the relevant information has to be gathered, correlated, double-checked, and then printed out. This adds additional preparation time before a load can be checked out. Checking in a load also requires each pallet to be manually scanned in.
  • Database Association: Unless an additional effort is made to transmit the data that is recorded to other interested parties, the data from checking inventories in and out of a warehouse remains local to that warehouse and opaque to other partners in the supply chain for that product.
  • Lost Licenses: Licenses are attached to the pallet and can be lost, misplaced, or damaged so that they are no longer readable. When this is the case, the receiver of the pallet must either manually inventory the pallet or accept on faith that it contains what it was supposed to contain and that it has been handled appropriately.

The net effect of these disadvantages is that while pallet licensing is widely used, there has been little effort to expand it into a standardized system that fully supports supply chain transparency and trackability. RFID pallet-level tagging, however, offers some solutions to the drawbacks of pallet licenses.

The Advantages of RFID Pallet Level Tagging

Some plastic pallets have embedded RFID chips for tracking.The chief advantage of RFID tagging is the ability to get an accurate read on inventories without the need to manually scan barcodes for every pallet, carton, or product. With the right equipment, whole trailer loads of products can be inventoried in seconds simply by driving the trailer through RFID sensors. This vastly reduces the time needed to inventory incoming products and ensure order fulfillment. 

Since (with the proper technology in place) RFID-enabled pallets can be automatically scanned going in and leaving, and will automatically update the warehouse management system, track and trace is simply a matter of making that database of inventory accessible to those who need to view it. This kind of transparency is a valuable asset in hunting down sources of product damage in the supply chain and resolving them. It’s especially crucial in the food supply chain. Food traceability isn’t just good business practice; the ability to swiftly trace food back to its source has the potential to save lives.

Pallet level tagging enables a transparent supply chain for a much lower cost.

The advantages of RFID pallet level tagging versus RFID case-level or item-level tracking is that it allows the same functionality as item-level tagging for a vastly reduced cost. RFID chips are relatively inexpensive, but the cost of RFID tagging every low-cost product in a pallet load quickly adds up. Pallet level tagging enables a transparent supply chain for a much lower cost. Since high-quality pallets like plastic pallets are a reusable asset, this means that RFID chips will be reused over and over again, making the most of each chip while ensuring a safer, more efficient, and more reliable supply chain for food, pharmaceuticals and other products.

The iGPS plastic pallet is a reusable and recyclable RFID-equipped rental pallet with outstanding durability for long-term reuse in the supply chain. Start building a more sustainable supply chain by giving our team a call at 1-866-636-6443, emailing a specialist at [email protected], or visiting our contact page.