Radio Frequency Identification - Essay Example

Radio Frequency Identification Table of Contents Table of Contents 2 Introduction to Information Technology (IT) 3 Introduction to logistics 3 Importance of logistics 4 Introduction to Radio Frequency Identification (RFID) 4 Core components of RIFD Technology 5 Applications of RIFD Technology 6 Advantages of RFID 6 Disadvantages 7 Future of RFID 8 Conclusion 8 References 10 Introduction to Information Technology (IT) Information technology has changed the face of international business completely. It has transformed the working process of companies. Innovation is a key component for a successful organization and the credit goes to services provided by Information Technology. Information technology has acted as a catalyst for companies to enhance the efficiency level of the workers. On an average more than one third of a non IT company’s revenue comes from the products and services that did not exist even five years ago (Nambisan, 2009). This data is quite shocking as most of the IT companies do not even depend heavily on IT services (Tan, 2002). In the mid 1990s the introduction of IT services has enhanced the product development process of the manufacturing companies (Nambisan, 2009). The operational efficiencies of the companies are mainly due to the effective contribution of IT services. Issues related to innovative design for manufacturing units, supplying goods, schedule optimization and production process can be solved easily. The second transformation in industries took place with the invention of internet and digitization of products and services. IT has increased the revenue of companies which deal in sales of products and services and reduced their problems. IT has reduced the communication gap between customers and companies (Nambisan, 2009). Different types of IT tools have been invented to support project management and product development. For example, tools like Capability Maturity Model and Enterprise Resource Planning has helped in cross project knowledge management and operations management (Nambisan, 2009). The tools of IT are very complex and this fact has resulted in development of a separate wing dedicated totally to the research and development of IT services. IT has made complex business models and processes simpler (Nambisan, 2009). Introduction to logistics Logistics means the organized movement of goods, services and employees. The scenario of logistics industry has transformed because of globalization. The logistics system includes inventory, warehousing, facility site location, protective packaging, cargo insurance, handling of payments etc. Initially logistics was used for military purposes but now it is used for commercial activities. Trade and commerce has increased rapidly due to logistics system. Cost associated with logistics is known as transport and insurance costs. In logistics, channels are the most important component. Distribution channel help in physical movement of goods whereas transactional channels help in contracting and trading of goods (Wood, 2004). Importance of logistics The logistics are of economic and governmental importance because it facilitates trade and balance of payment. The success of a company usually depends on the successful operation of its logistic company. (Ailawadi and Singh, 2005). Logistics is also important for defence purposes because it helps in carrying defence equipments. It has helped in planning and coordination of activities in companies. It also helps in lowering and reduction of warehousing and storage costs of the company. Therefore, we can conclude that logistics plays an important role in developing and integrating an economy (Wood, 2004). Introduction to Radio Frequency Identification (RFID) RFID is a gadget that uses wireless data to identify data from tagged objects, people and animals. RFID is a cost effective technology used by many companies to enhance the efficiency levels of the workers. The technology was incorporated by companies like Walmart and Department of Defense (DoD). In 2003, Walmart introduced this gadget in their company to track inventory. It was mandatory for Walmart suppliers to use the RFID technology for tagging pallets with Electronic Product Code (EPC). EPC is the first RFID technology standard. The reasons for Walmart to incorporate RFID technology is increased shipping decreased cost of labour, decreased storage costs and stocking efficiency (Hunt, Puglia and Puglia, 2007). Walmart and DoD are the world’s largest retail company and supply chain operator respectively (Hunt, Puglia and Puglia, 2007). The applications of incorporating the technology were as follows: To establish a common technology standard initially, there was a serious barrier to the growth of the industry. RIFD scale has created an economy of scale (Shepard, 2005). To establish a schedule for RIFD technology for easy and smooth operations (Hunt, Puglia and Puglia, 2007). Core components of RIFD Technology The basic components of RIFD technology are as follows: The tag is called Transponder and is composed of antenna, semi conductor chip and a battery. The interrogator of the device is called a reading and writing device and is composed of an antenna, electronic module and a control electronic module. The controller is called a host and performs the function of workstation running database and control. The main task of the interrogator and the tag is to transfer information from one another through radioactive waves. The tags hold various kinds of stored information about the stored objects. Tags hold information like time stamps, serial numbers and configuration instructions. Once the interrogator receives data, the information stored in the data relays back to the controller through a standard network interface. The tags are also known as ‘smart tags’ as they can read store large amounts of information and have an addressable memory that can be changed (Hunt, Puglia and Puglia, 2007). Applications of RIFD Technology They are used for supply chain and pallet tracking purposes. Companies like Walmart and DoD use RIFD technology for these purposes. RIFD technology is used for point of sale applications in supermarkets and other stores. For example, Exxon mobile company uses this application. (reframe) The technology is used for automatic toll collection systems in bridges, tunnels and highways. The RIFD technology is used on the animals by livestock management companies to track animals. The technology is used for tracking automobiles and vehicles (Brazeal, 2009). The technology is available in wrist bands and anklets forms. They are worn by prisoners in jail which helps the jailor to keep a track on them (Hunt, Puglia and Puglia, 2007). Advantages of RFID The interrogator of the device is actually a computer in small form which has the ability of reading, writing and relaying the tags. They can read all types of information, ensure whether a data is authenticating, and encrypt data to protect the information. Point of Sale systems are dependant solely on the interrogator as they help in identifying fraudulent activities. Data encryption performed by the interrogator helps in preventing attacks on the system from external sources. For example, it prevents virus entering the system and prevents hackers from using and corrupting the data. The RIFD controllers are known as ‘brain controllers’ of the system and enable the inventory suppliers to keep a track of their inventory. For example, if the inventory stock is depleting then it will notify the inventory suppliers. RIFD can use different frequency bands of communication like Very High Frequency (VHF) and Ultra High Frequency (UHF) bands. It is an environment friendly product. It provides 100% visibility of inventory to the companies of supply chain. It means that movement of goods has become easier with the use of this technology (Hunt, Puglia and Puglia, 2007). It is very difficult to replicate or build (Hunt, Puglia and Puglia, 2007). Disadvantages The RIFD technology uses the Low Frequency (LF) band which is very easy to manufacture but not portable. Moreover, the High Frequency (HF) band is more in use worldwide. It is not superior to the OCR (Optical Character Reading) technology. Although it is superior to the bar coding device it is not as widely used as the bar coding device. Over 60% of the grocery stores in America use bar coding device (Hunt, Puglia and Puglia, 2007). The read range of the tags is no more than a couple feet, due to poor antenna range. The electromagnetic waves are very high. Future of RFID Asset management and supply chain applications are expected to rein the industry growth of RFID in the next few years. As it has been forecasted, by late 2007 asset management and supply chain will account for 70% of the RIFD technology sales. In the last five years the sales of RIFD has increased from 323 million units to 1621 million units. The below mentioned chart shows the estimated industry growth of RIFD technology: Figure 1: Estimated Growth Rate (Source: Hunt, Puglia and Puglia, 2007) The future of the RIFD looks prosperous because of the following points: The early users of RIFD technology have been able to lower their operational costs and supply chain costs by 3 to 5%. Revenues of RIFD technology users increased to $7.5 billion dollars. In the pharmaceutical sector, the RIFD technology saved more than $8 billion dollars in the year 2006 (Hunt, Puglia and Puglia, 2007). Conclusion The future of the RIFD technology is very prosperous and there is a huge chance that companies would acquire this technology for enhancement of their productivity and efficiency. References Ailawadi, S. C. and Singh, R.P., 2005. Logistics management. New Delhi: PHI Learning. Brazeal, M., 2009. RFID: Improving the customer experience. New York: Paramount Market Publishing. Hunt, V.D., Puglia, A. and Puglia, M., 2007. RFID: A guide to radio frequency identification. New Jersey: John Wiley & Sons. Nambisan, S., 2009. Information technology and product developmenttion. 5th ed. Berlin: Springer. Shepard, S., 2005. RFID: Radio frequency identification. New York: McGraw-Hill Education. Tan, F.B., 2002. Global perspective of information technology management. Pennsylvania: Idea Group, Inc. Wood, D.F., 2004. International logistics. Berlin: Springer. Read More