RFID technology represents the next wave in supply chain innovation, allowing for greater efficiency in capturing data and the potential for finer data granularity. This will provide businesses with the impetus to examine their existing processes to gain more efficiency, allowing them to achieve better visibility to items as they move through the supply chain. The improved visibility inherent with RFID technology can reduce stock-outs, resulting in improved sales.

RFID readers positioned at checkpoints in the workflow will perform data capture quickly, without the need for time-consuming manual verification steps.

RFID is a step forward from Barcode, as it does not constrained by issues like line of sight and malfunction due to tag mutilation. This allows companies to develop processes in which more data is captured, resulting in a variety of benefits.

Many of the costs associated with labor are a direct result of the time workers spend capturing information and verifying the accuracy of tasks performed. RFID readers positioned at checkpoints in the workflow will perform data capture quickly, without the need for time-consuming manual verification steps.

A direct consequence of the improved visibility facilitated by RFID is the reduction in the excess buffer stock points in the supply chain, which drastically improves order delivery times. In sales, a stock-out is equivalent to a lost sale because the customer will look elsewhere for the product if it is not available within their expected timeframe.

In addition to reducing buffer stock, the finer granularity of inventory data availability allows for better deployment of inventory with expiration dates, or for pushing near-obsolete inventory to discount channels before they become obsolete.

Using RFID to verify the contents of each shipment before it is sent to a customer can improve order accuracy, resulting in improved customer satisfaction and reduced returns.

By Tracking critical supply chain events across the network, such as confirmation of shipments and proof of deliveries, companies can synchronize invoice practices, taking time out of the cash cycle.

Attaching RFID tags to reusable assets such as totes, pallets, forklifts, etc. allows tracking of their utilization to improve usage and reduce working capital requirements.

By embedding RFID tags into product components, manufacturers and retailers can combat "shrinkage," or the unintentional loss of product across the supply chain by helping businesses pinpoint exactly where and when shrinkage is occurring.