RFID Impact on Supply Chain Management - Research Paper Example

A comprehensive definition covering all the concepts is available in network dictionary: “Radio frequency identification (RFID) is a system for tagging and identifying mobile objects such as store merchandise, postal packages and sometimes living organisms (like pets). RFID uses low-powered radio transmitters to read data stored in a transponder (tag) at distances ranging from one inch to 100 feet. RFID tags are used to track assets, manage inventory and authorize payments, and they increasingly serve as electronic keys for everything from autos to secure facilities. RFID works using small (sometimes smaller than a fingernail) pieces of hardware called RFID chips. These chips feature an antenna to transmit and receive radio signals. So-called passive RFID chips do not have a power source, but active RFID chips do. RFID chips may be attached to objects, or in the case of some passive RFID systems, injected into objects” Radio Frequency Identification (RFID) is a technology to recognize objects. This technology is for eternity classified as a technology similar to Automatic Identification and Data Capture (AIDC). AIDC consists of Barcodes, Biometrics and Smartcards. Apparently, RFID and Barcodes technologies are considered as one of the key drivers in supply chain management operations to categorize objects or merchandize at various workflow stages. In the intervening time, Biometric and Smartcard technologies are employed for access control procedures, banking and communication industry. The prime advantage of RFID technology is its ease of use and minimalism. RFID replaces barcodes and is a time saving, effective and reliable alternative. That is the reason why it is adopted and deployed in multipurpose applications i.e. Supply Chain Management (SCM), Inventory Tracking, Theft Protection, Location based Services, Electronic Health Monitoring for health care systems, RFID integrated travel documents, payment systems and context-aware applications. In recent years, this technology is flourishing robustly due to its extensive usability in upcoming technologies i.e. Ubiquitous Computing, Pervasive Computing, or Ambient Intelligence Solutions. RFID technology comprises of transmitters spreading electromagnetic technology in the environment to send and receive signals. The communication is conducted between two elements, transceiver and transponder. The radio waves propagation is emitted the form of electromagnetic waves and promulgate in speed of light. The applications of radio waves consist of Radar systems, Fixed Mobile and Satellite Communication, Media Broadcasting and Computer Networks. Radio waves can utilize different band of frequencies measured in Hertz (Hz) which represents the natural process of oscillation in waves. RFID technology utilizes Low Frequency (LF), High Frequency (HF) and Ultra High Frequency (UHF) from the electromagnetic spectrum. Light waves have certain limitations when passing through objects. On the other hand, radio waves travel through solid objects and opaque materials. RFID is implemented in many domains to improve business processes and supply chain management. RFID Usability Factor There is always a logical concept of analyzing RFID as a better substitute for the barcodes systems. However, the consideration of difference between these two technologies is imperative in order to deploy them successfully. Undeniably, RFID technology does not entail a line of sight to read the tags as compared to barcodes, where it is mandatory to identify the tag optically to scan it within a squat distance. Furthermore, in RFID technology, the space for data in a tag can be more than 100 bytes, which is far greater than the maximum space available in barcodes. The available storage space provides the freedom to assign identification numbers not only to a brand but also to each item individually. The valuable functionality of identifying multiple tags concurrently enhances the efficiency in any operational environment employing this technology. On the other hand, RFID technology is prone in terms of attenuation and propagation problems hereditary from radio frequency, more specifically in the existence of metal or liquid. It is also a cheaper deployment as compared to barcode technology. Consequently, RFID industry stakeholders are working tirelessly to minimize the cost of RFID technology. The efforts are making the component prices lower, which are vital in calculating a cost of any RFID solution. RFID has provided enormous advancements for industrial engineering as in the last ten years, corporate organizations have relied on platforms supporting integration and enterprise wide applications. The benefits of implementing these platforms include synchronization of data and the flow of information from trading associates and within the organization. Likewise, these platforms aided valuable processes for optimizing and planning reporting features. However, the role of these platforms for supply chain management was still not adequate. The challenge for real-time tracking and data capturing were not highlighted. RFID technology has played a viable role via radio wave communication in multiple business domains including retail, manufacturing, logistics, security, and distribution. Moreover, RFID technology facilitates visibility, efficiency and low cost for the supply chain procedures. Furthermore, RFID technology also provides an efficient collaboration channel that facilitates trading partners to communicate with new high levels of sensitivity and competence (Kamaladevi, 2010). RDIF integration in supply chain also has a valuable contribution in terms of strategic challenges. (Sabbaghi & Vaidyanathan, 2008) conducted a study on RFID fundamental concepts for an all-inclusive supply chain strategy, supporting the efficiency and success for supply chain management. Four primary processes for the supply chain management were implemented, to underline economic opportunities and challenges during the deployment and planning of RFID technology. Moreover, RFID technology also enables organizations to develop and integrate models for supply and demand chain to gain competitive advantage. The Engineering Economics of RFID in Specialized Manufacturing Apart from providing great advancements to improve industrial engineering, RFID has also shown its contribution in specialized manufacturing sector. The objectives for industrial engineer sector are to guarantee production of specialized products and tools by using cost effective methodologies. If an organization fails to produce the required product within the allocated manufacturing cost, they may lose the customer as well as suffer from high audit cost, high labor cost and consequently lost sales. A study from (Jones, Riley, Franca, & Reigle, 2007) highlighted cost reduction in non-calibrated tools by implemented RFID solutions. Calibrated tools are vital for quality production and require constant tracking for most advantageous labor efficiency and productivity. The RFID solution will track the calibrated tools and reduce cost significantly. The study also concludes the calculation of a net present value analysis as compared to do-nothing scenario, , by deploying the RFID technology, the cost saving figures were approximately $ 60,000. By implementing RFID, other areas can also be integrated to save more cost and produce efficiency. Therefore, RFID integration in specialized manufacturing is beneficial in terms of cost, efficiency and tracking. Moreover, asset management systems that are integrated to Enterprise resource planning (ERP) will be useful when integrated to RFID technology. The objective of asset management systems is to locate accurate assets, specifically at the exact time, and present information about each, along with its status. In order to carry out processes in asset management systems, a tag is attached to each asset, which allows the transmission of information, by frequency identification to the reader. After receiving the data, the reader sends it to the inventory management system for tracking the location via the production facility (Jones, Riley, Franca, & Reigle, 2007). Automated Manufacturing and Logistics Control The other dimension of RFID is passive RFID that is implemented in automated manufacturing and logistics control. The passive RFID technology is beneficial for any business process requiring fast flow of items. Moreover, passive RFID systems transmits energy entirely from the reader devices called transponders which are relatively inexpensive, making them the ideal choice and easy to apply for manufacturing and logistics control systems. Likewise, these transponders are easy to fix on the object for identification. Furthermore, RFID technology facilitates real time object visibility with high accuracy providing organizations to continuously identify and locate all items with real time data management (Keskilammi, Sydänheimo, & Kivikoski, 2003). Real World Examples In order to gain a better idea, some real world examples will illustrate the operations and processes that are facilitated by RFID in organizations. This section will describe some real world examples of implementing RFID for improving the efficiency of production in a department for packing integrated circuit. Liu and Chen conducted a study in 2009 for improving production efficiency in an integrated-circuit packaging house by implementing RFID technology. The integration with electronic framework, RFID technology, and ERP system was implemented along with Oracle AIM. The system reflected two modules named as electronic receiving modules and inventory transaction module respectively. The conclusion and results highlighted the implementation of electronic receiving module is utilized to enhance accept / check operation issues, operations associated with stock-in-record processing and document hauling operations. On the other hand, inventory transaction form is capable to handle demands for entry information related to accounting, transaction form request related to inventory, transaction records and processing replacement. By implementing RFID integrated electronic control system, the processing takes less time along with elimination of client’s complaints to a minimal level along with reduction of penalties. Moreover, manual operations eliminated by electronic control system along with significant reduction in labor and operation cost for the packaging house. Moreover, ‘Yard operations’ is a “solutions such as access, in/out control, equipment pool and yard location. This allows companies the ability to maximize asset utilization for operational planning, and minimizes time-consuming yard checks, equipment searches and lost equipment with time and date verification for management reporting. Intermec products are used in a wide range of Yard Operations applications, including Asset Tracking, Dispatch, Labor Productivity, Paperless Repair Operations, Parts Inventory, Asset Utilization, Fleet Yard and Gate Management, Overage, Shortage or Damage and Security Compliance” (Intermec transportation and logistics solutions: Yard operations ). RedPrairie has integrated RFID technology with yard management via a new module for warehouse management. RedPrairie productivity solution provider with “34,000+ customer sites, Over 20 sales and service offices globally, Global headquarters in Alpharetta, Georgia, Approximately 1,100 employees and customers in over 40 countries” (About RedPrairie ). The features of this solution provides advanced visibility by integrating RFID technology to monitor and trace trailers from ‘check in’ and ‘check out’ gates. RFID passive tags are used, to track the movement of trailers (RedPrairie introduces RFID solution for yard operations.2008). Security Issues RFID also have some drawbacks in terms of security. The hackers try to breach the system by several different ways. If a malicious attacker breach in to the system, to disable an RFID tag, the hacker will pose a considerable risk related to that when entirely destroying the tag or fetter it in the process for a sufficient duration. The attacker will try to physically remove the tag or cause a physical harm to it in order to make an RFID tag malfunction. Moreover, ‘kill’ command is executed for disabling a tag; the hacker can execute this command to illegally execute tags, which will assure to achieve malicious goals. Switching tags between two different items will eventually split their prices. This kind of attacks is proficient and applicable on barcodes by shoplifters. Even though, RFID tags are embedded with physical protection to eliminate these kinds of attacks. Various other tags are vulnerable and easy to split from one item to another to pay less at the checkout point. This hacker does not require any technical knowledge to perform this kind of attack. This attack has certain limitations and cannot be executed on large number of tags. Correspondingly, the destruction of tag follows same rules and theory. Attacker may attempt to apply pressure or extend efficient chemical substances or the cause of having a tiny cut to the visible antenna to render the tag to pass it through checkpoints. Essentially, physical damage is not the cause of attacker only; the tags can also be tempered by friction or high temperatures. Some tags becomes dead due to consumption of the batters installed in them, as passive tags are better in this scenario because they generate power from radio waves. Furthermore, RFID tags can be easily damaged quickly by applying an electrostatic discharge from a conveyor belt in any industrial environment or any produced high-energy waves due to their compassion to static electricity; this damage is carried out with both intentionally and accidentally. Conclusion The first section comprehensively defined what RFID is. , and what are the components that are associated with it. The carrier i.e. electromagnetic waves, on which the technology travels is also defined in detail. After describing RFID, the usability factors comes in, that describes how RFID is used by the organizations and its significance in the domain of industrial engineering is demonstrated by different studies by the researchers. Moreover, the contribution of RFID in industrial engineering is highlighted with the following advantages: The ability to save cost by eliminating redundancy, Valuable processes for optimizing and planning reporting features, Synchronization of data and the flow of information from trading associate within the organization, To successfully address the strategic challenges for Supply Chain Management. The coursework also defines the contribution of RFID in specialized manufacturing and ‘logistics control’. Some of the real world scenarios are also discussed where RFID is successfully implemented and operational. The real world scenarios include the integrated circuit packaging house and yard operations. The security issues related to RFID are also defined in detail, providing an overview of security breaches and their consequences. RFID is an emerging technological evolution in terms of supply chain management, industrial engineering and logistic control operations. It is a great future prospect for industrial engineering students, due to its significant involvement in the supply chain management. Likewise, RFID is an emerging technology that requires appropriate training and skills and industrial engineering professionals must emphasize on RFID, to lead the industrial revolution (Jones & Chung, 2008). References Radio frequency identification. (2007). Network Dictionary, , 399-400. Sabbaghi, A., & Vaidyanathan, G. (2008). Effectiveness and efficiency of RFID technology in supply chain management: Strategic values and challenges. Journal of Theoretical & Applied Electronic Commerce Research, 3(2), 71-81. Kamaladevi, B. (2010). RFID - the best technology in supply chain management Advances in Management. Jones, E. C., Riley, M. W., Franca, R., & Reigle, S. (2007). Case study: The engineering economics of RFID in specialized manufacturing. Engineering Economist, 52(3), 285-303. doi:10.1080/00137910701503951 Keskilammi, M., Sydänheimo, L., & Kivikoski, M. (2003). Radio frequency technology for automated manufacturing and logistics control. part 1: Passive RFID systems and the effects of antenna parameters on operational distance. International Journal of Advanced Manufacturing Technology, 21(10), 769-774. Liu, C. M., & Chen, L. S. (2009). Applications of RFID technology for improving production efficiency in an integrated-circuit packaging house. International Journal of Production Research, 47(8), 2203-2216. doi:10.1080/00207540802380556 Jones, E. C., & Chung, C. A. (2008). EDUCATION in modern solutions. Industrial Engineer: IE, 40(8), 29-33. Intermec transportation and logistics solutions: Yard operations Retrieved 3/23/2011, 2011, from http://www.intermec.com/solutions/transportation/yard_ops/index.aspx About RedPrairie Retrieved 3/23/2011, 2011, from http://www.redprairie.com/about-us/ RedPrairie introduces RFID solution for yard operations. (2008). Apparel Magazine, 50(3), 38-38. Read More