The Factory Floor Is the Front Line of Inventory Accuracy. It’s Time We Treated It That Way.

We recently asked a simple question on LinkedIn: at what point in your supply chain are RFID tags applied to products?

The responses were telling. Nearly two in three respondents said tagging happens at the factory. Source tagging is clearly the dominant model. But what caught my attention is what’s happening beyond that majority: nearly one in five respondents said tagging still happens in-store during receiving, and one in eight said they’re not using RFID at all yet. That tells me a significant share of the market is still living with the cost, delay, and error risk of late-stage tagging – or hasn’t started the journey – and it reinforces why getting source tagging right matters so much for those who’ve already made the shift.

Source tagging is not a finish line. It’s the starting point. And for too many brands, the conversation stops the moment a tag is applied, as if the act of tagging itself guarantees accurate data downstream.

It doesn’t.

The gap between tagging and data integrity

Most brands today have sophisticated visibility into what happens once inventory reaches their own walls: the DC, the store, the shelf. But the factory? That’s often a blind spot. Not because brands don’t care, but because factory-level operations sit across complex, multi-tier supplier networks where control is harder, and standardization is inconsistent.

This is where source tagging quality is won or lost. Not in the boardroom where the RFID mandate is written, but on the production floor where a team is encoding thousands of tags per shift across dozens of SKUs, often for multiple brands simultaneously. Consistent tagging ensures uniformity and reliability, reducing the risk of errors. But that consistency has to be engineered into the process, not assumed.

What precision at the point of origin looks like

When we talk about source tagging at SML, we mean an integrated process: the right tag format for the product and packaging, encoding aligned to the brand’s data architecture, validation at the point of application, and exception handling before the carton is sealed, not after it’s opened at the DC.

Here is a principle I come back to often: the most expensive tag is the one you have to re-process. When encoding accuracy and placement quality are managed at the source, downstream exception costs drop dramatically. That’s not a technology conversation. That’s a process design conversation, and it has to start at the factory.

Our teams are embedded within production workflows, not bolted on after the fact. Across SML’s production facilities worldwide, we manage source tagging inside the factory environment – with quality oversight built into the process and digital identity management through our serialization and data management systems. The result is data that starts clean and stays clean, from first scan to point of sale.

This isn’t a standard we only set for others. Within our own production facilities, we apply the same rigour to our RFID inlay manufacturing process – managing data quality from bonding and converting through to print and encode. It’s how we ensure the tags themselves are built to perform before they ever reach a supplier’s production line.

Why this matters now more than ever

The pressures are compounding. Inventory accuracy expectations are rising. Omnichannel fulfilment demands are compressing timelines. By embedding RFID tags at the point of origin, companies unlock efficiencies, reduce costs, enhance security, and deliver superior customer experiences. And as supply chains become more complex, source tagging positions organizations to thrive in a data-driven, omnichannel world.

There is also a new dimension to consider. With Digital Product Passport requirements and traceability mandates emerging across key markets, the integrity of product-level data from the point of origin isn’t just an operational concern anymore. It’s a compliance and brand-trust imperative. The data that starts at the factory will follow each product through its entire lifecycle, from first sale to resale to recycling. That data has to be right from the start.

The question has changed

For the majority, the industry has moved past “should we source tag?” But for the nearly one in five still tagging in-store – and the 12% not yet using RFID at all – the case for starting at the source has never been stronger. The real question now is whether your source tagging process is actually delivering the data integrity your downstream systems depend on.

That’s the conversation I want to have. Not about whether RFID works, but about what it takes to make it work from the very first scan.

If you’re navigating this – whether you’re deep into source tagging, still tagging downstream, or evaluating RFID for the first time – I’d welcome the conversation. The path from directional to precise isn’t one any brand needs to walk alone.