Many warehouses are converting to smart labeling systems because they provide efficient tracking capabilities with minimal effort. Smart labels drastically reduce the amount of time it takes to keep track of inventory moving in and out of a location. This also in turn lowers your cost of operation. Here’s what you need to know about smart labels before you implement them in your own warehouse.

What are Smart Labels?

Smart labels utilize RFID (radio frequency identification) technology to help improve warehouse inventory tracking.

These labels emit a passive radio frequency that helps communicate product identification information. You can install various RFID readers around the warehouse that will pick up these frequencies, so you can monitor them. The smart labels can be attached to pallet loads or boxes of product and then when they move throughout the warehouse, your scanners pick up the RFID frequency and send information to your computer tracking system.

Benefits of Smart Labels

With the use of RFID tracking through smart labels, you can eliminate the need for workers walking around and scanning barcodes or other identification tags. A computer system automatically collects and tracks RFID codes to help you manage inventory as items come and go. This drastically cuts back on labor costs and the amount of time required to go and scan every single item or pallet load that enters your warehouse.

Because smart labels help increase productivity, you can move and manage your inventory much faster on a daily basis. This allows you to send shipment out faster, which helps increase the output you have each quarter. Because you can move inventory much faster, you are able to keep up with increased demand and sell more product. This raises your potential profit because now you can sell more in a given time period with your inventory capabilities.

Another major benefit of using smart labels is the increased amount of information you can gather and the accuracy of that information. More product identification information can be stored behind the RFID codes than with a traditional barcode. The scanners or RFID codes are also more reliable compared to barcodes, which can be smudged or rubbed off during transport. Having accurate information is key when working with thousands of moving products on a daily basis.

Implementing Smart Labels

The process of implementing smart labels into your warehouse operations is going to be a big investment initially. You will need the right equipment and technology to pick up and track the RFID codes. This involves getting the right computing software installed, as well as training your employees on how the system works. You will also have to purchase RFID smart labels and start applying those, whether by hand or with automated equipment.

You should complete a cost vs. ROI (return on investment) analysis before moving forward with smart labeling to ensure you’ll see the savings you want. In most cases, making the initial investment is worth the extra savings you’ll experience over time. But a cost and ROI analysis will help you know exactly what those savings are and how many months it will take for them to start affecting your budget.

Because of the convenience of smart labeling systems, it’s easy to predict that this will become common warehouse practice in the future. Having the ability to track and manage inventory without scanning barcodes is going to revolutionize the way your warehouse operates. The computer system and RFID scanners eliminate the need for manually scanning barcodes as new product comes in or stored product ships out. This in turn saves your company thousands of dollars through reduced labor costs and increased productivity.