Track Every Part – RFID Drives Supply Chain Visibility
A Rising Need for Real-Time Visibility
The automotive industry operates within complex, globally linked supply chains, continually navigating challenges from raw material shortages to geopolitical events. Recent global events, including the pandemic, semiconductor shortages, material and labor constraints, and ongoing geopolitical shifts, have profoundly impacted automotive supply chains. These disruptions have highlighted the industry’s vulnerability, leading to production halts, unreliable forecasting due to poor inventory visibility, lost sales, and soaring costs
Moving Past Manual Parts Identification
For decades, manual scanning, often with barcode labels, was the main way to identify parts in automotive manufacturing. But today’s complex vehicle production, with its many variants and options, quickly pushes manual scanning to its limits. Faster production cycles leave less time for reading labels, even as more data needs tracking. Manual processes demand more labor, are prone to errors, and can’t provide real-time updates. Plus, damaged labels often become unreadable. Even camera-based readers need a line of sight, which is ineffective once parts are installed. The automotive industry’s strict quality standards demand higher accuracy and better data integration to eliminate errors and leverage IoT.
RFID Makes a Smart Difference
In response, automotive manufacturers are increasingly adopting Radio Frequency Identification (RFID) to track inventory across parts shipments and manufacturing operations.
RFID tags are well-suited for the harsh conditions, efficiency, and speed demanded by automotive production. They can be embedded or encapsulated into parts, remaining readable whether in a cardboard box, on a pallet, or in a truck. Entire pallets or truckloads can be simultaneously identified without continuous manual counts, and line-of-sight is not required, allowing parts to be identified even after vehicle assembly. With digitally connected inventory across supplier, logistics, and plant operations, manufacturers can seamlessly link part identification data to production management systems, including cloud, enterprise resource planning (ERP), and manufacturing execution systems (MES). The result is that RFID automates tracking, achieves fast read-rates, boasts extremely low error rates, and facilitates smart manufacturing approaches.
RFID in Automotive: Driving End-to-End Efficiency
The full benefits of RFID in the automotive supply chain emerge when suppliers apply tags at the component level. This automates data collection across logistics and all manufacturing stages, providing detailed visibility that helps OEMs and suppliers avoid stock shortages and disruption. RFID inherently supports Just-in-Time (JIT) and Just-in-Sequence (JIS) deliveries through automatic loading verification, which ensures correct components, smoother assembly lines, and avoids costly penalties.
„The greater the importance of sequencing and scheduling, the more important that RFID becomes as a means of improving the flow and efficiency and quality assurance of the process.“ – Richard Wilding, Professor of Supply Chain Strategy, Cranfield University.
Beyond simple parts tracking, RFID also significantly improves production control even as model volume and variety increase. Granular, real-time part data enables optimized material flow, helping reduce excess buffer stock, tracking obsolete components, and supporting sustainable recycling.
RFID excels with complexity, quickly and accurately identifying parts across diverse model variations. It is highly durable even in harsh environments, connecting data to manufacturing systems and IoT. RFID read points across facilities—at gates, forklifts, or conveyor belts—track each major component from delivery through material stock, bodyshop, paintshop, assembly, and finished product yards, providing end-to-end visibility.
„With end-to-end RFID, suddenly the ‚big picture‘ is available.“ – Stephan Freichel, Professor of Distribution Logistics, Cologne University of Applied Sciences.
RFID readers can directly link to plant ERP and MES, creating a log of all serialized components and an as-built record for each car. This data forms the basis for continuous workflow improvement, reduced cycle times, and future machine learning and AI optimizations. RFID offers unparalleled flexibility in data capture, regardless of part visibility or fitment, delivering better and more accurate data without interrupting production flows.
In conclusion, the strategic implementation of RFID in automotive supply chains provides essential visibility and control. By optimizing logistics and manufacturing processes, RFID drives greater efficiency, reduces waste, and enhances sustainability across the entire operation. Download the full white paper by filling the form below to explore how these advanced solutions can transform your automotive supply chain.
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