Impact of RFID on Supply Chain

ASAD ALI JAVED (6731)AHAD AHMED KHAN (13010)IQBAL LALANI (11041)

INSTITUTE OF BUSINESS MANAGEMENT (IoBM)

RFID TechnologyWhat is RFID ? Radio Frequency Identification A micro-chip in a label used to transmit data when the label is exposed to radio wavesRFID belongs to the class of technologies that exchange data wirelessly

RFID BasicsWhat are the main components ?

RFID Tags RFID Reader Antenna and transceiver(reader)

Host Computer

RFID BasicsHow it works ?AntennaPassiveActiveA passive tag is an RFID tag that does not contain a battery; the power is supplied by the readerAn RFID tag is an active tag when it is equipped with a battery that can be used as a partial or complete source of power for the tag's circuitry and antenna.

RFID in Retail Supply ChainRetail Supply chain processSupplierManufacturingRetailer/DistributorRetailer storeConsumerManufacturers can especially benefit from RFID, since the technology can make internalprocesses more efficient.At the distribution center or warehouse, tags are readagain by readers integrated into the warehouse gates for incoming and outgoing goods.

RFID in Retail Supply ChainAutomate the Supply chain processRFID TAGReader

RFID in Retail Supply ChainBenefits at a glance

Decrease in lost stock Faster locating stock Lower labour requirement Reduction of out-of-stock Low safety stock level Facilitation of JIT

RFID in Retail Supply ChainBenefits at a glanceBenefits for Retailers 5 8 % improvement in shelf stock rate 5 10 % lower inventory levels 3 4 % lower logistic costs 2 10 % higher sales due to lower out of stocks

Benefits for Manufacturers 5 30 % lower inventory levels 2 13 % lower warehouse and transportation costs 10 50 % reduction in lead-time (facilitates JIT)1 5 % higher sales due to lower out of stocks

Opportunities TimeBeing able to respond more quicklyTaking quicker decisions FeedbackMinimize human factor SavingsStreamlining orgsLong term savings

Cost aspect of RFIDCost

Most companies that sell RFID tags do not quote prices because pricing is based on volume, the amount of memory on the tag and the packaging of the tag

Active tags are $25 and up. Active tags with special protective housing, extra-long battery life or sensors can run $100 or more.

A passive costs from 7 to 15 U.S. cents. If the tag is embedded in a thermal transfer label on which companies can print a bar code, the price rises to 15 cents and up. Low- and high-frequency tags tend to cost a little more.

RFID system performanceFrequency is the leading factor that determines the read range, resistance to interference and other performance attributes. The reason is that radio waves behave differently at different frequencies, thus generating different properties such as different ranges.Range, besides frequency, the power output and the directional sensitivity of the antenna may also influence the systems read range as well as the immediate physical environment.Antenna orientation, position, proximity and reading area of the tag antenna are crucial to consider in order to ensure optimal reads.Signal attenuation is not only due to the fact that an emitted signal attenuates naturally with distance and that a reflected signal attenuates at much faster rate.Electromagnetic interference a wide variety of machines such as conveyors with nylon belts or manufacturing robots can interfere with RFID systems.

References and recommended readingPublications

A Workshop Report from the Staff of the Federal Trade Commission. 2005. Radio Frequency Identification: Applications and Implications for Consumers. Diane Publishing.

Finkenzeller, K. 2005. Second Edition. RFID Handbook: Fundamentals and Applications in Contactless Smart Cards and Identification. John Wiley & Sons Inc.

Glover, B. and Bhatt, H. 2006. RFID Essentials. O'Reilly Media Inc.

Practel, Inc. 2004. RFID Report: A New Horizon for Accountable Society. Information Gatekeepers, Inc.

Shepard, S. 2005. RFID: radio frequency identification. McGraw-Hill.

Websites

en.wikipedia.org/wiki/RFIDwww.rfidjournal.com/www.rfid-weblog.comwww.spychips.comwww.verichipcorp.comwww.wethepeoplewillnotbechipped.com

**To achieve its purpose, supply chain management needs accurate identification and trackingof goods as well as knowledge about what inventory a company have, where it is, how muchit has and in what condition. Such information is crucial today in order for companies tosurvive and thrive. Furthermore, more than ever before, there is a pressure on manufacturers,distributors and retailers to maximize process efficiency, minimize cost and provide the bestpossible value for end-customer, which boils down to further improve supply chainefficiency.*RFID is an automated identification tagging method for storing and retrievingdata from a distance using RFID tags, which are attached to items and which contain amicrochip and an antenna. Using an RFID reader, a remote device with one or more antennas,data on the microchip can be read at appropriate points in a business process via radio waves,allowing the tagged item to be automatically identified without a direct line of sight. Theinformation picked up by the reader is passed on to middleware and application software thatvalidates and process the data, so that they can be used to create business value.

*Passive tags, which are by far the most common, require no internal power. Theyreceive transmission power from the incoming radio frequency signal sent by thereader. They require no maintenance and are cheaper than active tags. They cost from20 cents to 40 cents. Passive tags can operate at low-frequency. Theirpractical read distance can range from about 10 cm to a few meters, depending on theantenna size and design and the chosen radio frequency.Active tags include a battery to power transmission, which makes them larger andmore expensive than passive tags. On the other hand, they have a much faster datatransfer rate and a larger storage capacity, allowing more programming options. Dueto their onboard power supply, active tags are suitable for longer distances and cantransmit at higher power levels than passive tags, enabling them to work better aroundsuch offending materials as metal and water. They have ranges anywhere from tens ofmeters to hundred of meters. active tags generally cost from $20 to $50

*Tracking the movement of goodsRFID in logistics operationsAsset managementInventory controlShipping and receivingRFID in manufacturing******