Implications of RFID Technology - Coursework Example

The business world has evolved a lot since the turn of the 21st century ten years ago. New technologies have appeared that have influenced the way many companies perform business. A technology that has taken off and has impacted many industries including the retail consumer markets is radio frequency identification (RFID). RFID is a technology that uses tiny computer chips to track items at a distance (Spychips, 2010). Multinational companies such as Wal-Mart have utilized RFID technology to improve their logistics and inventory handling. The use of RFID has greater implications than ever before because companies are no longer hinder by economical factors that prohibited its use. The purpose of this paper is to discuss different applications of RFID technology and its implications on our society. RFID technology can change the way people realize business. Stores can create smart money cards that customer can use to realize their purchases. An industry that utilized RFID to create solution that customers wanted is the water park recreational industry. The enterprise Interlock created RFID tags that can be used by customer to open up lockers and to serve as smart money cards to replace the need to carry cash in the recreational water parks (Lock’em Up, 2010). The smart tags can also be used in these theme parks to identify the age and body specification of children such as height which may prohibit a child from using certain park rides. In the cellular industry companies have the capacity to insert RFID tags inside the mobile phones so that the devices can be used for payment system applications. The integration of the telephony and banking industry can further promote consumerism in the marketplace. Companies in the logistics business can use RFID tags to tag valuable assets in order to know its location at all times. The tags can be used for security purposes. The prices of the tags have come down a lot which has permitted many companies to take advantage of its applications. In the apparel industry company can keep better track of its inventory which can enabled firm to optimize sales during peak seasons. The total spending in RFID supply chain application in 2007 was approximately $1 billion (Ftc, 2005). Due to value of information many libraries across the United States and Europe are tagging their books with RFID technology. The use of RFID provides manager with a greater level of inventory control precision. This information can be used to improve their purchasing cycles. Some people believe that RFID create a security risk for consumers. The only identifiable area in which there are privacy risks is where the information is control which is the database. Adequate security protocols are needed when dealing with the private information of consumers. The use of RFID technology in the fashion industry can help retailers reduce their losses associated with running out of stock which account for nearly $69 billion annually (Motorola, 2010). Managers and accountants can use the information provided by RFID technology to improve the ordering system of companies based on actual data. In the past tracking merchandise across the supply chain could have been seen as irrelevant information, but nowadays it can be the foundation that is used to implement a business strategy. The use of RFID technology as a payment tool has been effective at location where there a mass amount of consumers paying small standardized amounts. City highway tolls and the subways systems are places where RFID technology has been implemented smoothly. Cars no longer have to stop to pay a person manually if they carry RFID prepaid cards. Understanding the basic elements that compose RFID is important. The four basic components of an RFID system are a chip, antenna, reader and the database in which information is stored. The database is an external component that is independent of the transmission and collection of data. There exist two types of tags: passive and active. Passive tags have no onboard power source, thus they cannot initiate communication. The more complex applications of RFID use active tags that can initiate communication and have a power source. The private industry has many users for RFID technology particularly in the supply chain of firms. The technology can provide benefits for all the participants of the chain including distributors, vendors, and point of sale establishments. It is estimated that in 2005 the retail industry suffered between $180 million to $300 million in losses associated with poor supply chain visibility and the ability to track products across the chain (Ftc, 2005). In order for the use of RFID to properly work in the retail industry there must be cooperation among companies. The products manufactured must have RFID tags inserted into its packaging and the subsequent handlers of the merchandise must do the same if repackaged. Airports can use RFID technology to improve its security tagging system of bags carried by the travelers on board flights. Security our airports and ports has remained a top security priority since 9/11. The use of RFID technology can provide city inspectors with valuable information about the carry load in commercial vessels. The information can be used to possible detect the entry of illegal drugs or other goods into the country. The world largest producer of consumer goods, China, has become the biggest spender in RFID technology as of 2007. The People’s Republic of China spent $1.9 billion in RFID which represents 38.30% of the $4.96 billion global marketplace (Researchandmarkets, 2008). An RFID project that helped China in 2008 deal with its national security was implemented at the Beijing Olympics. Many of the leading manufacturing companies in the RFID marketplace are have chosen China as its preferred location due to lower materials and labor costs. The ability to sell these tags at pennies per tag has increased the demand for the product. Today it is economically viable to place an RFID tag in a $5 item at a store. Wal-Mart is ready to install smart shelves that provide network RFID readers, while Gillette started a 500 million promotional purchasing campaign to bring attention to the technology (Pinto, 2004). The application of RFID technologies can be seen across many industry including agriculture and farming. Farmers are tagging their animals with RFID technology to protect its livestock and maintain better control of is animal inventory. The tags can provide personalized information about the animals such as size, weight, age. The use of RFID in livestock is one of the fast growing segments of the RFID markets. Sales are expected to jump from $233 million in 2007 to $2.96 billion in 2017 (Labelingnews, 2009). The use of RFID technology has helped public health officials prevent disease outbreaks among animal populations. In the United States health care providers of human patients are using RFID technology to track equipment, instruments, and sponges used in surgery to ensure nothing is left behind inside a patient (Hp, 2010). The used of RFID affects the national security of many countries because they insert RFID it the passports of citizens. The passport can monitor the movement of people inside critical locations such as airports where each person must carry their passports with them at all times. The same concept is true for the creation of identification of critical personnel during crisis such as a hurricane, earthquake, or volcano. Public officials, doctors, and security personal can be quickly identified using RFID technology in IDs. The military can also take advantage of the technology to tag prisoners and activate weapons remotely. The technology has advanced so much that now humans can be inserted with RFID technology. The development of human centric applications for RFID has lots of potential for applications in the medical field. (Masters & Michaels, 2006). Emergency medical healthcare providers such as ambulance workers could retrieve valuable information such as donor eligibility if people carried around identification cards inserted with the technology. The RFID technology has taken off as prices have gone down. The technology had many applications that had been hidden from us due to budgetary constraints. Companies such as Walt-Mart have proclaimed strong support for the technology which has helped accelerate its implementation through numerous industries. As the prices of the technology has gone down companies have been able to implement the technology upwards and backwards through its supply chain network. The technology has utility due to its wide variety of range of applications. RFID can help improve security, protect against disease outbreak, and help save human lives. The biggest producer of consumer goods in the world has accepted the technology and is currently the preferred location for RFID producers. China in itself poses as major consumer of RFID related products due to its immense population of 1.3 billion citizens (Culturegrams, 2010). The benefits of RFID have arrived and our society should embrace its continuous use in order to improve our communication networks and lower business costs. The proliferation of RFID technology will improve the ability of companies to react to consumer behavior. References CultureGrams (2010). China. Retrieved March 31, 2010 from CultureGrams datababse. Ftc.gov (2005). Radio Frequency Identification: Applications and Implications for Consumers. Retrieved March 31, 2010 from http://www.ftc.gov/os/2005/03/050308rfidrpt.pdf Labelingnews.com (2009). Farms Harvesting RFID Benefits. Retrieved March 31, 2010 from http://www.labelingnews.com/2009/11/farms-harvesting-rfid-benefits/ Lock’em up (2010). Splash, 64. Retrieved March 31, 2010 from EBSCOhost database. Hp.com (2008). RFID Technology can help save lives in health care sector – and preserve privacy – Commissioner Cavoukian and HP. Retrieved March 31, 2010 from http://h41131.www4.hp.com/ca/en/pr/rfid-technology-can-help-save-lives-in-health-care-sector.html Masters, A, Michael, K. (2006). Lend me your hand: the use and implications of human-centric RFID. University of Wollongong. Retrieved March 31, 2010 from http://ro.uow.edu.au/cgi/viewcontent.cgi?article=1390&context=infopapers Motorola.com (2010). Retail Fashion Market RFID Solution. Retrieved March 31, 2010 from http://www.motorola.com/staticfiles/Business/_Documents/static%20files/2010%20Industry_Brief_-_Retail_Fashion_Market_RFID_Solutions.pdf?localeId=33 Researchandmarkets.com (2008). RFID in China 2008-2018. Retrieved March 31, 2010 from http://www.researchandmarkets.com/reportinfo.asp?report_id=590995 Pinto, J. (2004). RFID – A significant technology with far reaching implications. Retrieved March 31, 2010 from http://www.jimpinto.com/writings/RFID.html Spychips.com (2010). What is RFID? Retrieved March 31, 2010 from http://www.spychips.com/what-is-rfid.html Read More