Wal-Marts shift to Radio Frequency Identification - Essay Example

Wal-Mart’s shift to Radio Frequency Identification There was a time when barter system was the only mode of obtaining necessary things that people didn’t have. People would go to market with things that they had in excess and exchange them for the things that they needed. Business used to be that unsophisticated but it was in the process a tedious job. Then with the advent of the concept of money in the form of coins made of rare metals and then in the form of paper money, the concept of buying and selling was introduced. The earliest known use of money occurred in Mesopotamia around 2500 BC. Replacing the barter system, in which one goods was exchanged for another, the use of money brought about an explosion in the variety of goods available. With money, people could easily purchase exactly what they wanted or needed. This continued on for a few centuries and is still in use in the world though not in the same sense as it used to be before. Today science and technology have revolutionized each and every aspect of human life. Shopping and business are no exceptions-they too have been profoundly modified by technology. Credit cards, billing systems, shopping on the web, internet bank accounts and the system of barcodes on products are some of the examples that depict the extent to which technology has penetrated into this frontier. Even though many advances have been made, global concerns are growing regarding aspects like shoplifting, piracy and misappropriation of products. To check these many solutions have been proposed like the bar code system and most recently the RFID technology. This technology has both merits and demerits as does every other technology ever conceived. Wal Mart’s decision to make use of it has given it an impetus. This essay describes about the prospects and aspects of RFID technology keeping Wal Mart in the background. RFID Technology: RFID, an emerging technology, stands for Radio Frequency Identification. According to RFID: From Wikipedia, the free encyclopedia (2005), “Radio Frequency IDentification (RFID) is a method of storing and remotely retrieving data using devices called RFID tags or transponders. An RFID tag is a small object, such as an adhesive sticker, that can be attached to or incorporated into a product, animal, or person. RFID tags contain antennas to enable them to receive and respond to radio-frequency queries from an RFID transceiver. Passive tags require no internal power source.” The tags are generally miniaturized electronic circuits enclosed in protective cases. When they absorb signal from a reading device they get activated and send out data to the reading device. When an RFID tag passes through the electromagnetic zone, it detects the reader's activation signal. The reader decodes the data encoded in the tag's integrated circuit (silicon chip) and the data is passed to the host computer for processing(RFID: From Wikipedia, the free encyclopedia 2005). In this way details like its location etc can be ascertained by the reading device. Based on power consumption tags are classified as active or passive. Passive RFID tags have no internal power supply. They do not contain any batteries inside them. The minute electrical current induced in the antenna by the incoming radio frequency signal provides just enough power for the tag to transmit a response. Lack of an onboard power supply means that the device can be quite small and light weight: commercially available products exist that can be embedded into many products. As of 2005, the smallest such devices commercially available measured 0.4 mm × 0.4 mm, which is thinner than a sheet of paper; such devices are practically invisible to the naked eye (RFID: From Wikipedia, the free encyclopedia 2005). Passive tags have practical read distances ranging from about 10 mm up to about 6 metres which is considered small. This is because of the fact that the capacity of the radio-waves to induce currents in the chip decreases rapidly with increasing distance between the tag and the reader. Active RFID tags, on the other hand, have an internal power source, and may have longer range and larger memories than passive tags, as well as the ability to store additional information sent by the transceiver. At present, the smallest active tags are about the size of a coin. Many active tags have practical ranges of tens of metres, and a battery life of up to several years(RFID: From Wikipedia, the free encyclopedia 2005). Because passive tags are much cheaper to manufacture and have no battery, the vast majority of RFID tags in existence are of the passive variety. As of 2004, these tags cost from US$0.40(RFID: From Wikipedia, the free encyclopedia 2005). Universal RFID tagging of individual products will become commercially viable at a production volume of 10 billion units per year, driving production cost to less than US$0.05 according to one manufacturing company. Current demand for RFID integrated circuit chips is not close enough so that the price can be supported. Analysts from independent research companies Gartner and Forrester Research agree that a price less than $0.10 (production volume of one billion units) is achievable in 6–8 years, thus limiting near-term prospects for widespread adoption of passive RFID. However, new manufacturing techniques may rapidly lower the price of RFID. While the cost advantages of passive tags over active tags are significant, other factors including accuracy and reliability make the use of active tags very common today. An RFID system consists of several components like tags, tag readers and tag programming stations. The purpose of such a system is to enable data transmission by a tag to a RFID reader. The reader processes the data into useful information according to the needs of the application. The information may provide many details about the tagged product like its price, color, date and year of manufacture, date of expiry, etc or may provide details regarding the present location of the product itself. In a typical RFID system, individual objects are equipped with small and inexpensive tags. The tag contains a transponder with a digital memory chip that is given a unique electronic product code. The interrogator, an antenna packaged with a transceiver and decoder, emits a radiomagnetic signal activating the RFID tag so it can read and write data to it. When an RFID tag passes through the electromagnetic zone, it detects the reader's activation signal. The reader decodes the data encoded in the tag's integrated circuit (silicon chip) and the data is passed to the host computer for processing. This the way a tag fuctions and acts as an identifier. As far as historical aspects of RFID are concerned, one of the first devices similar to the present day RFID devices was invented by Leon Theremin, a Russian scientist. It was designed to function as an espionage device for use by the Russian Government. A similar technology, the IEE transponder was invented by the British in 1939 and was used routinely by the allies in World War II to identify and locate airplanes. Another early work exploring RFID technology was the landmark paper written and published in 1948 by Harry Stockman. It was entitled “Communication by means of reflected power” and was published in “The proceedings of the IRE”. Stockman predicted that “…considerable research and development work has to be done before the remaining basic problems in reflected power communication are solved and before the field of useful applications is explored.” It required thirty years of advances in many difficult fields before RFID became a reality (RFID: From Wikipedia, the free encyclopedia 2005). Wal Mart and implementation of RFID technology: Wal-Mart Stores, Inc. is a company that operates a variety of retail chain stores, based in Bentonville, Arkansas. Wal-Mart is the world’s leading retailer. Retailing is a business activity of selling goods and services directly to consumers. Instead of selling products for resale, a retailer sells goods or services to individuals making purchases for themselves or their families. Wal-Mart’s operations include Wal-Mart discount stores, Wal-Mart Supercenters, Bud’s Discount City stores, and Sam’s Club warehouse stores. Wal-Mart discount stores are bargain department stores, selling a variety of household furnishings and appliances, clothing, electronics, sporting goods, hardware, gardening items, automotive supplies, and pharmaceutical and food items. Wal-Mart Supercenters combine Wal-Mart discount stores with full-service supermarkets. Bud’s Discount City stores are also department stores that offer about 75 percent of the same kinds of merchandise as do Wal-Marts. The remaining 25 percent of Bud’s merchandise includes manufacturers’ closeouts, discontinued items, overstocks, and refurbished goods, all sold at substantial discounts. Sam’s Clubs combine warehouse facilities, which stock large quantities of goods, and retail stores (Wal Mart Inc: Microsoft Encarta 2003). Due to the large number of branches and a huge volume of business transactions that Wal Mart has to handle, it needs to go for new methods for checking the integrity of goods that it sells and also to check out illegal activities like shoplifting and piracy. Also as the volume of goods that pass through its shelves is large, the bar code system proves to be inadequate when the parameters of the goods like date of manufacture, date of expiry, price, color etc are to be effectively monitored. Hence it opted for the use of RFID technology. In 2003 retail giant Wal Mart stressed that it was serious about using the electronic product code (EPC) to track pallets and cases. The message was delivered by Vice-chairman Tom Coughlin, Wal Mart stores president and CEO Mike Duke, CIO Linda Dillman and others at a gathering of Wal Mart’s top hundred suppliers outside of Bentonville, Arkansas, on 4th and 5th November(RFID Journal: Wal Mart Details RFID requirements n. d). Potential use of RFID RFID tags are often envisioned as a replacement for UPC or EAN bar-codes, having a number of important advantages over the older bar-code technology. Bar Code is a series of parallel vertical lines, or bars, used to assign a unique identification code to an item. In a bar code, a number or character is represented in binary form by a short sequence of alternating black and white bars of varying width. A bar code combines several of these sequences to create a unique set of numbers or characters that identifies the item. Laser scanners read the bar codes, and the information is then transmitted to a computer for processing. RFID tags may not ever completely replace barcodes, due in part to their relatively higher cost. For some lower cost items the ability of each tag to be unique may be considered to be overkill, though it would have some benefits such as the facilitation of taking inventory(RFID: From Wikipedia, the free encyclopedia 2005). RFID tags have the potential to streamline and improve inventory management by allowing manufacturers to more efficiently enter and track the flow of goods. For example, RFID could let a company add a boxful of goods to its inventory systems all at once, without having to unpack the carton and scan each piece separately. An RFID scanner can pick up signals from all the chips in the sealed box; something bar code systems can't do (RFID and Wal Mart n. d). RFID technology is going to bring about a major advance in supply chain management in the coming few years. This is because of the advantages that RFID technology has over the traditional bar codes system. Even then the enterprises will have to do considerable planning and practical testing to successfully implement this new and innovative technology. Practical testing is a must as it is very much necessary to get information the way customers take this new technology. It is also necessary to test the opinion of the customers as many customers have their own concerns regarding RFID. Although RFID technology is being used in a wide variety of fields, more focus needs to be given to supply chain. This is because of its wide impact in that respective field. About this Caton M. (2004) says. “RFID will have a significant impact on every facet of supply chain management- from the mundane, such as moving goods through loading docks, to the complex, such as managing terabytes of data as information about goods on hand is collected in real time.” RFID will initially be used to manage the identification of large lots of goods-for example at the pallet and carton level. RFID tags therefore must have unique serial identifier information that associates each lot with a corresponding bill of loading sent from the originator. Because RFID readers can scan tags many times during a one second period, the serial identifier will prevent the application making the data request from getting multiple counts of the same item (Caton M. 2004). At the individual level RFID tags can store information relevant to many applications. For example embedded tags could contain information about warranty and prior service to make it easier for companies to service those items. Demerits and Concerns Though RFID technology promises consumers many benefits, it has also raised a variety of privacy concerns as do many new communication and information storage technologies. There are two ways by which RFID might be used to compromise and invade an individual’s privacy. These are Direct monitoring: It is possible for somebody in the manufacturing and sales departments to learn about or track down a customer against the in personal interests of the customer. As Harper (2004) exemplifies, “…RFID could be used to note a customer’s purchases and then learn when the customer returns to the store- or at least when the associated tag has done so. Conceivably information like this could be used to develop a dossier about a consumer and his or her activities. The mere collection of too detailed information may offend consumer’s sense of privacy.” Indirect monitoring: An outsider to a RFID network may use the existence of RFID tags to read and collect personally identifiable information contrary to the interests of those being monitored. One can scan an RFID tag and use the further reading of the tag else where as a proxy for the presence of the same individual in the second location. For example union operatives could surreptitiously scan for RFID tags on clothing, Identity cards and so on at the entrance to a right to work rally. When the RFID tag’s serial number that was scanned at the rally arrives with person at the union hall he or she could face retaliation from the union (Harper J. 2004). Also there is a rising concern regarding health hazards that may result from exposure of body to UHF waves emanating from the RFID tags. Current RFID tags in the UK which may be read remotely by equipment which consumers and shop staff will be exposed to works either at High Frequency 13.56 MHz, with a nominal range of 5 meters, or at Ultra High Frequency 868Mhz. This latter frequency is very close to the 900 MHz frequency used by a lot of GSM Mobile Phones. UHF frequency bands for EPC Auto-ID chips vary from 868Mhz in the UK/EU to 915MHz in US/Japan, so currently, a single frequency UHF tag will not work worldwide (multi-frequency ones may be available, but they must cost more). People have been worried about the potential health risks of GSM Mobile Phones and Phone Transmitters, which are much more powerful radio energy sources than RFID tag readers. Are there potential health risks to customers and staff from the hundreds of RFID tag readers in a supermarket full of "intelligent shelves" constantly transmitting, as they read each unique RFID tag in sequence? Nobody knows, because the trials so far have not yet wired up a whole supermarket with this technology (RFID tag privacy concerns n. d). In this regard more testing and experimentation need to be done to identify the effects that RFID technology has upon the health of human beings. Future Prospects In the coming future the prices and the efficiency of RFID tags are predicted to improve. Any technology in the beginning seems to be non-feasible and impractical due to many constraints like its high cost, sophisticated technology involved and its limited use. This notion changes gradually with time as customers become more experienced with it. Similarly RFID technology too would become very much feasible and would be used widely. This becomes more evident from the quote made by Fischer K. (2005), “RFID tags are poised to become the most far-reaching wireless technology since the cell phone. Worldwide revenues from RFID tags will jump from $300 million in 2004 to $2.8 billion in 2009. During this period, the technology will appear in many industries with significant impact on the efficiency of business processes.” Many regard RFID as a technology in its infancy with as yet untapped potential. This assessment seems true. The technology has many benefits to offer. Its stumbling point seems only to be a variety of issues outside the technology itself: marketing problems, false promises, and a lack of standards. Industry members, however, have become painfully aware of these problems and are trying to do something to remedy the mistakes of the past. If they are able to successfully unify the industry with standards, deliver on future promises, and convince end users of the technology's benefits, then RFID's future looks favorable (Campbell D.2000). The costs of RFID tags and the technology itself are decreasing. Dropping cost is bringing RFID to the fore. In the very near future, some RFID tags may cost as little as $0.05-0.10 in large quantities which is an economically feasible price. We are rapidly approaching a critical turning point at which inexpensive RFID tags would be viable as cost-saving replacement to barcodes, of which some 5 billion are scanned around the world every day (A primer of RFID n. d). These are the prospects that RFID technology holds out for the future. Conclusion As of today the role of RFID tags in any field is still in its infancy. RFID tags though may have come to replace bar code systems in the developed nations, are skill unfelt and unheard in the developing and underdeveloped nations. Their cost of operation is still much higher when compared with other technologies. Their prices have been predicted to fall in the coming near future with more advancement in radio and semiconductor technology. Also there have been raised many questions regarding its morality in the society. The answer to these questions would be decided by only coming future where in RFID may become a part and parcel of existence. References: RFID-From Wikipedia, the free encyclopedia. (2005) Retrieved July 27, 2005 from http://en.wikipedia.org/RFID - Wikipedia, the free encyclopedia.htm Caton M.: (2005) Retrieved July 27, 2005 from http://www.eweek.com/rfid/ RFID Reshapes Supply Chain Management.htm. RFID and Wal Mart. (n. d) Retrieved July 27, 2005 from http://www.rfidsurvival.com/RFID and Walmart RFID Survival.htm Wal Marts Inc. (2003) Retrieved July 29, 2005 from The Microsoft Encarta 2003. RFID journal: Wal-Mart Details RFID requirement. (2003) Retrieved July 28, 2005 from http://rfidjournal.com/ Harper J. (2004): RFID tags and privacy. Retrieved July 29, 2005 from http://www.cei.org/pdf/4080.pdf RFID tag privacy concerns. (n. d): Retrieved July 30, 2005 from http://www.spy.org.uk/cgi-bin/rfid.pl. Fischer K. (2005): RFID Tag Market to Approach $3 billion in 2009 Retrieved July 30, 2005 from http://www.instat.com/press.asp?ID=1205&sku=IN0402440WT. Campbell D. (2000): The future of RFID, Retrieved July 30, 2005 from http://www.integratedsolutionsmag.com/Articles/2000_02/000209.htm. A primer of RFID. (n. d): Retrieved July 30, 2005 from http://www.rsasecurity.com/rsalabs/node.asp?id=2116. RFID: Applications, security and privacy. (n. d) Retrieved July 30, 2005 from https://www.aimglobal.org/estore/ProductDetails.aspx?ProductID=340. Read More