Radio Frequency Identification - Essay Example

..a transmitter sends a burst of radio waves through the antenna to the chip inside the tag to read the information stored in it" (Hoctor and Thierauf 237). In fact, Higham calls it a "must-have accessory in the supply chain" (23). The scope of this paper is to answer three specific questions regarding RFID based upon the reading assigned. 1. Based on the background readings, what makes RFID such a big deal in managing production and inventory Of all the issues related to RFID and its implementation, both positive and negative, the two most noteworthy aspects are strongly positive; it allows producers to increase their productivity through the efficient management of the SCM process, and it increases the security and accuracy of delivery.

By streamlining the product data process, RFID allows suppliers to increase their productivity in numerous ways. First, in terms of general organizational efficiency, RFID allows suppliers to monitor and control things like batch management and returns, shipping and receiving accuracy, as well as inventory visibility (Byrne, 43(5) 31). The ability to know exactly where each item in the supply chain is, where it has been, and where it is going, is vital. The information provided, and the ease at which it is obtained, is not inexpensive.

After the investment in the technology is made, however, the raw cost of goods sold is actually decreased because of the increased productivity available to the front end of the supply chain. For example, the cost of labor can be drastically reduced because of the fact that many features of inventory tracking and management become automated in an RFID system. Further, in terms of unit location, serviceability, and depletion, an RFID system provides the ability to direct capital outlays and increase accuracy in reporting (Byrne, 43(5) 32).

Finally, RFID is a big deal in managing resources because of the enhanced security it offers. An organization can use RFID to track a particular item, establish and maintain product authenticity through the coding sequence, ensure end-user safety where necessary through inventory control procedures, and prevent shrinkage through theft or other means (Byrne, 43(5) 32). On the whole, the technology represents a significant step forward for streamlined SCM.2. What is the nature of the impact that RFID is having on industries, and on individual companies within those industries One of the first notable impacts of RFID technology is the adoption of it by major end-user markets and the obvious effect that has on their suppliers.

The huge company, Wal-Mart, is now requiring its business partners to participate in the use of the technology (Byrne, 43(9) 31), which makes perfect sense as the organization must efficiently track vast quantities of inventory through multiple distribution centers as well as ensure just-in-time supply to its thousands of stores. The effect on the suppliers is significant, as they must stay in tune with such technological developments if they are going to maintain their customer base. Even if their participation is somewhat forced (Byrne, 43(9) 31) or pressed upon them, they still will reap the benefits of a much more secure and efficient SCM process.

Accordingly, supplier demand brings great impact not only to the industry but also to the individual suppliers. Another impact of RFID technolog