Radio Frequency Identification Technology


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Introduction of Radio Frequency Identification Technology


Radio Frequency Identification (RFID) expertise comprises a stimulating discovery that has a large promise upside and some important downsides as well. With its proficiency to pathway pointers and store facts and numbers, RFID is assisting producers to modernize supply chain administration, retailers to decrease lengthy lines in shops, and clinics to pathway patients and persevering files. But buyer privacy supports are progressively worried by what they glimpse as the infringement of "big brother." This concern, we accept as factual, has the promise to slow or even disrupt upcoming RFID applications. In alignment to bypass this conclusion, we propose that RFID expertise has the dual blame to both effectiveness and to defend privacy. We reconsider the present tendencies in RFID expertise, gaze at how manufacturers and authorities are speaking to buyer privacy concerns and finish with a suggestion that a coalition be conceived that encompasses producers, retailers, government envoys.

Introduction of Radio Frequency Identification Technology

Chapter I: Introduction


Radio-frequency identification (RFID) is a generic term for the technology that uses radio waves to automatically identify an object, place, or person from distance (McKelvin Jr et al, 2005; Want, 2004). Some tags can be read from several meters away and beyond the line of sight of the reader. Radio-frequency identification RFID can include smart cards, smart label, smart tags and other form of radio- frequency (RF) tracing devices (RFID Journal, 2005; Shephard, 2004).

There are generally three types of RFID tags: active RFID tags, which contain a battery and can transmit signals autonomously, passive RFID tags, which have no battery and require an external source to provoke signal transmission, and battery assisted passive (BAP) which require an external source to wake up but have significant higher forward link capability providing great read range. (Byrne, B. M.2001)

The applications of Radio Frequency Identification (RFID) and Electronic Product Codes (EPC) in supply chain management have vast potential in improving effectiveness and efficiencies in solving supply chain problems. EPC is the concept of storing product identification on chips no larger than a grain of sand, then placing these chips on tags, which in turn are placed on objects so they can be uniquely identified. RFID technology can track inventory more accurately in real time resulting in reduced processing time and labor. The complete visibility of accurate inventory data throughout the supply chain from manufacturer's shop floor to warehouses to retail stores brings opportunities for improvement and transformation in various processes of the supply chain. Various types of RFID tags are produced to be used in different environments and applications, such as card board cases, wooden pallets, metal containers or glass objects, in order to improve the performance of the complete system (Intermec 2004).

In RFID system, individual objects are equipped with RFID tags, containing a digital memory chip and an antenna. When an RFID tag passes through an electromagnetic zone created by a reader, the tag detects the reader's activation signal and in turn transmits its stored data to the reader. The reader then decodes the data contained in the tags microchips and converts it into data, which is passed to the host computer system for processing (Jones et al. 2004a).

Aim of the Study

This study examines the fundamental components of RFID technology that directly support the effectiveness and efficiency of supply chain management.

The study will examine

  • The appropriate business processes affected by the RFID technology.
  • The required planning and examination for successful implementation.
  • Potential impacts on effectiveness and efficiency of supply chain management.

RFID technology has a huge potential in the supply chain, but this is the job of a IT consultant to convince the supply chain companies that how RFID technology can facilitate their business process. Then address the planning and monitoring issues of the successful implementation and last but not the least what are the potential benefits the company can achieve after deploying RFID technology in their system.  (Yu, S-C. 2007)

Challenges faced by the Companies

Despite all the investment and potential benefits associated with the use of technology RFID, it also poses serious problems to be overcome before full implementation is possible in the companies. The following seven key issues, in general, facing the company. (Byrne, B. M.2001)

1) Technical problems

2) common problems

3) Patent Issue

4) expenditure challenges

5) problems of infrastructure

6) return on investment

7) barcode to RFID issues

Passive tags are RFID tags cheap, but they are not the batteries for their power, but rely on an antenna on the waves received from the reader. Radio waves will reflect when traveling in the direction of metal and refracted in the water, this will reduce / degrade the quality of reception in the tag. (Atkinson, W.2004)

Thus, the product, enclosing the tag becomes a problem, for example, a bottle of water and tin baked beans. Another RFID technology is that to create a vast amount of data that can be very difficult to manage, and this may lead to a massive burden on the IT systems company. However, the implementation of relevant data management systems that can analyze a huge amount of data that may be able to quickly solve this problem

Another important task is to standardize, at present there is no internationally agreed standards for RFID. According to scientists, RFID success will depend on the mandatory open standard technologies like the Internet. The issue became a serious obstacle to adapt to technology, RFID. In 2004, these two organizations, EPC global and the International Organization for Standardization (ISO), which were issued reports that are still evolving, but not compatible(Lin, S-H et al 2002)

However, in June 2004, a joint venture between the European and North American authorities agreed on the members of the established protocol on the types of tags that will be used. This marks an important step in the development of common standards. During the meeting between representatives of the leading companies Britain and the United Kingdom's leading providers of RFID technology in 2004, states that there are no international standards is irrelevant as a general standard is already adapted British EPC,

EPC global developed and recognized by all major RFID user standards. (Yu, S-C. 2007)

The decision to move from barcodes RFID tags in retail should be financially viable, as well as the time needed for repayment of the huge investment potential that the introduction of RFID will bring. However, in their studies in an experiment Sainsbury's from RFID, Kärkkäinen (2003) found that the investment required for implementation is from £ 18 to £ 24million and the payback period is estimated to range from 2 to 3years. This is a very short payback period given the enormous investment. (Byrne, B. M.2001)

Again, the cost of RFID tags can be expensive. At the moment all the big companies make most of the experimenting in the supply chain. For general adaptation in retail trade, would be no need for mass production of labels. Managing Director of MGI Metro Group Information Technology, States that "for the use of RFID technology can be a viable alternative to the bar code, the unit cost should drop to € 0,01 or less. However, Kevin Ashton, executive director of MIT's Auto-ID Center believes that $ 0.05 is achievable in the next few years. (Atkinson, W.2004)

Finally, the issue of confidentiality was raised by civil liberty groups . The adaptation of RFID technology at the level of individual products of the company will be able to track the movement of not only their products, but also their clients, and this term is an interference with the privacy of its customers. For example, experts believe that there should be consultation with consumers, as well as a campaign to convince customers that the use of RFID is to increase efficiency in the store, lower prices and better trading experience. Some activists even went further to call for government regulation, and encouraged the company to limit the range at which tags can be read. That is, should be the proximity between the reader and tags. The client must also have the opportunity to destroy the RFID-chips once the product is paid (Yu, S-C. 2007)

Radio frequency identification technology

Producers and other actors (e.g. retailers) in a provide string of connections have conventionally utilized bar-coding as a way to pathway and hold command of goods in a logistic system. Bar-coding uses a digital dialect to encode facts and numbers in order that it might be read automatically by a computer-based scanner.

Bar-coding has some benefits in relative to manual management in periods of facts and numbers correctness, facts and numbers move pace and flexibility. A major handicap of bar-coding is that each pieces a lone merchandise, batch or motor truck need to be scrutinized manually, even though numerous endeavors have been made to computerize scanning methods with blended results. (Karaer, O., Lee, H.2007)

Another handicap is that bar-coding can only shop a restricted allowance of information. A third handicap is that when a tag is published, the data comprised in the tag will not be changed. New data needs a new tag. Insensitive atmospheres can furthermore impairment the tag so it will not be read by a scanner. Though the RFID expertise is not new and was utilized, for demonstration, by the British infantry to pathway planes and vehicles throughout World War II, some large retailers are at this time looking at the expertise as a signify to competently organize their provide chains (Glover and Batt, 2006; Prater et al 2005).

The RFID expertise conceives a readable and rewriteable tag scheme for items as they progress with the supply chain. The expertise presents furthermore the opening to conceive intelligent goods that can feed data into the provide string of connections in an automated latest tendency (Boström, 2006).

A RFID scheme has three rudimentary constituents namely an antenna, a transceiver (with decoder) and a transponder (RF tag). Figures were developed and retained by a computer in a alike method to a barcode system. The antenna develops a magnetic area which triggers the magnetic tag and endows connection between the tag and the transponder. (Byrne, B. M.2001)

In numerous situations the antennae and transceivers are crammed simultaneously as a reader. The variety of the scheme counts on the tag (transponder) and the functioning wavelength. Low- wavelength schemes have shorter reading expanse and smaller scheme charges, while high- wavelength schemes can come to higher scanning races and distances, but furthermore at a higher cost (Atkinson, W.2004)

Chapter II: Literature Review

Literature Review

Most histories of RFID trace the technology back to the radio-based identification system used by Allied bombers during World War II. The British pioneered RFID during World War II to identify their aircraft returning from sorties over occupied Europe. (Yu, S-C. 2007)

In the late 1960s, the U.S. Government began using RFID to tag and monitor nuclear and other hazardous materials (Simson et al. 2005). RFID have been used extensively in various manufacturing environment, in order to automate individual functions, dramatically increasing production speed, reducing labour requirements and eliminating human error (Finkenzeller 2003).

By the use of RFID tagging inventory management improved dramatically. Reduce out-of-stock occurrences in the retail environment, as it enables accurate monitoring of inventory levels on the shelves and in the warehouses (Heinrich 2005, McCrea 2004).

Barcodes Replacement

Barcodes are a line-of-sight technology, which means the scanner has to be oriented to the barcode in order to read it (Intermec, 2002; RFID Journal, 2005; Smith et al, 2003). In comparison to this RFID does not require line of sight because the tags attached to the products can be read from a distance with our specific orientation, which also allows for greater automation (RFID Journal, 2005; Shephard, 2004; Want, 2004)

RFID technology has been promising to enhance support supply chain management efforts. (Atkinson, W.2004)The future success of RFID and other mobile services will be strongly affected by the ability of businesses to offer the right products and services to consumers. RFID has the potential in other areas of operations, such as manufacturing, after-sales service support, and total product life cycle management. (Byrne, B. M.2001)

An RFID system can be used to identify many types of objects, such as manufactured goods, animals, and people. RFID technologies support a wide range of applications-everything from asset management and tracking to manufactured products and related customer services to access controls and automated payments. Each RFID system has different components and customizations so that it can support a particular business process for an enterprise. (Karaer, O., Lee, H.2007)

RFID in the literature

There have been numerous seminars throughout latest years about the execution of RFID technology. In other words, the significances for retailers, packagers and emblem proprietors have been talked about. Wal-Mart's conclusion for accomplishment of RFID by its dealers will likely force numerous firms's to evolve schemes for its use inside the genuine supply chain (Prater et al, 2005; Vijayaraman and Osyk, 2006). Even companies that are not opposite supplier demands are now taking grave notice in the new expertise (RFIDnews, 2007a). The RFID expertise has abruptly become an appearing commerce with numerous new anticipations for explaining understanding difficulties inside worldwide circulation schemes and retail chains (Sandberg, 2006). In spite of the anticipated leverage on numerous commerce the implementation of RFID expertise has come to unassuming study interest from a managerial issue of view. (Atkinson, W.2004)

A latest work has been undertaken about the accomplishment of RFID in relative to barcodes in libraries (Yu, 2007). Earlier investigations have enclosed varied localities in relative to the foreword of RFID technology. One work has considered RFID and the discovery cycle (Sheffi, 2004), while other investigators have considered some of its promise submissions, advantages and trials for retailers (Jones et al., 2004). A conspicuous promise part for RFID is food retailers as they have been at the front position of technological discovery and growth inside the retail part of the finances (Jones et al., 2005a, b). Another investigation has considered the market drivers premier to RFID execution in the food shop commerce (Prater et al., 2005).

In one of the couple of empirical investigations undertook about execution of RFID, the investigators are enquiring the warehousing industry. The outcomes from that work display that there are still several anxieties about buying into in RFID expertise in relative to the advantages that can be paid e g in warehousing (Vijayaraman and Osyk, 2006).

Another study direction anxieties the significances for administration when RFID is in work in the every day enterprise (Wyld, 2006) RFID has furthermore been considered from notion to execution and the investigators contend for that the expertise is a ordered evolution for a effectively integrated provide string of connections (Speakman and Sweeny Iansiti and Levien, 2004, p. 2).

Additionally, RFID has been considered on a theoretical cornerstone speaking to its abilities and submissions in diverse commerce (Attaran, 2007). Since, RFID expertise is experiencing prevalent adoption over numerous businesses, luggage management and security has been investigated inside the financial aviation industry. The authors accept as factual that is absolutely crucial for airlines to gaze into the likelihood of utilising RFID following schemes as a means for concluding the service anticipation consignment gap (Wyld et al., 2005).

The RFID apparatus serves mostly the identical reason as a barcode or a magnetic narrow piece on a borrowing card. (Byrne, B. M.2001) An important benefit of RFID expertise is that the RFID apparatus does not require to be positioned accurately in relative to the scanner an exceptional reader. (Karaer, O., Lee, H.2007) A major handicap has been the cost of the apparatus in relative to the bundle, for demonstration a food shop merchandise for example a milk or juice extract carton (cost of tag/margin on the product). The first study inquiry in this paper mentions to: (Atkinson, W.2004)

The literature and practicability studies would be examined by a network viewpoint and the A-R-A form. (Lin, S-H et al 2002)

A network perspective

Firms in developed markets function in a quality of accessible technology. In a collective grade mechanical interdependencies are distinguished by technological schemes or "paradigms". (Yu, S-C. 2007) The technical attachment echoed in these patterns and their development is a foremost force forming the background of a firm and its connections with third parties. "Business connections can be glimpsed as connections that form and contemplate the living technology" (Håkansson and Snehota, 1995, p. 3) Analysis of applying a new expertise enhances thus the relevance of the developed mesh model. When the outlook of a firm as a output unit is directed, it is the undertaking structure of the mesh that is most important for investigation in relative to the consequences of the technology. (Gaudin, S.2008)

A supply chain

Any firm's achievement in an enterprise market counts to a large span on its connections with consumers and dealers. In most commerce connections are constructed up throughout substantial time. A connection between distinct companies can be clarified over a field from untainted transactional connections to collaborative connections or partnerships (Ford et al., 1998). The employed connections are embedded in enterprise systems comprised of attached connections (Håkansson and Snehota, 1995). Working connections and enterprise systems are convoluted phenomena that furthermore live at multiple levels. (Gaudin, S.2008) An enterprise mesh can be advised as a position of two or more attached enterprise relations. Linked in this sense means the span to which substitute in one relative is dependent upon exchange (or non-exchange) in the other relative (Anderson et al., 1994).

Two close connections can furthermore be exactly or obscurely attached with other connections as a part of a bigger enterprise network. A focal connection can furthermore be attached to some distinct connections that either the supplier or clientele has, where some are with the identical third parties. (Byrne, B. M.2001)

A substantial allowance of study has been dedicated to interpret connections and enterprise systems (Easton, 1992; Håkansson and Snehota, 1995). The enterprise mesh can be analysed by utilising a form of three constituents - A-R-A (Håkansson and Johansson, 1992). Actors are companies for example suppliers and customers that present undertakings and command resources. (Yu, S-C. 2007)

Actors present undertakings for example transactions and conceive worth by changing these assets in the brain of the consumers. Resources can be of numerous types and mentions to any thing that actors specifically worth for their enterprise processes. This means that assets can take numerous types for example expertise and mechanical know-how, gear, staff or capital for savings which a firm may use to develop larger worth for itself or other stakeholders. (Karaer, O., Lee, H.2007) In a few positions, a firm can own a granted asset for strategic reasons, but might rather than gaze for other companies to evolve the asset collaboratively. (Lin, S-H et al 2002) This may be in the pattern of a joint project or a coalition. Iansiti and Levien (2004, p. 1) contend that scheme is evolving, to an expanding span, the art of organizing belongings that one does not possess. (Atkinson, W.2004)

In a structure of the supply chain management publications, (Tan 2001, p. 40) contends that in a really "integrated" supply chain, the last buyers drag the inventory through the worth string of connections rather than of the constructor impelling the pieces to the end-users. (Harland 1999) interpret supply chain organization as a vibrant unified supply chain, while (Hewitt 2000) recounts a growth stage after integrated enterprise systems as demand string of connections societies. (Byrne, B. M.2001)

The aim of this literature review is the developing structure of the supply chain and how major actors are utilizing the assets for formation of comparable benefit. This is in row with (Cooper et al. 1997) how they recount the addition of enterprise methods over the supply chain as a basic fraction of supply chain management.

Actors in a supply chain

In a wrapping supply chain, there are distinct actors engaged at each supplemented worth degree. In the first phase, the manufacturers are counting on distinct suppliers of unprocessed resources. The dependence on outer actors is counting on the degree of upright mixing in the following phases of the supply chain. This is emphasized when it arrives to farther altering or supplemented worth methods for example lamination or outer level of distinct materials. (Yu, S-C. 2007)

The upright incorporation can be both in the pattern of a mechanical or a financial incorporation in the supply chain. In SCM study publications, the customary buying and logistic purposes have developed into a wider strategic approach to components and circulation administration renowned as supply chain management (Stank and Goldsby, 2000; Alvardo and Kotzab, 2001; Tan, 2001).

Other study concerns have enclosed international locating (Kotabe and Murray, 2003); administration try (Basnet 2003; Bales et al., 2004) and integration inside a provide string of connections (Cousineou et al., 2004).

Resources in a supply chain

The assets inside a supply chain are restricted by the distinct actors. Nevertheless, rudimentary assets of strategic worth are furthermore controlled by lone or together controlled by actors' out-of-doors manufacturing. (Lin, S-H et al 2002) These assets are either in the pattern of unprocessed components or as provision essential for the output method in the pattern of goods or services for the industry. Assets are varied and have qualities in an limitless numeral of dimensions (Håkansson and Johansson, 1992; Håkansson and Snehota, 1995). Some of the assets have furthermore an alternate use either inside other commerce, or for farther processing. (Karaer, O., Lee, H.2007)

Activities in a supply chain

From a theoretical issue of outlook, undertakings happen when one or some actors blend, evolve exchange or conceive assets by utilising other assets (Håkansson and Johansson, 1992). These undertakings take the pattern of changing and processing distinct assets by supplementing worth at distinct phases in the supply chain. Another significant component is furthermore the move undertakings either to farther processing or exactly to customers.

Single undertakings can be connected to each other in distinct ways. A major distinction can be inside commerce with a high degree of upright integration in evaluation to comparable companies at a smaller grade of integration. Many undertakings are thus firmly connected to each other ones while other ones are more roughly coupled. However, a entire undertaking cycle is seldom controlled by a lone actor.

RFID - a new asset in the packaging concept

The major role that companies have allocated to packaging has conventionally been associated to the objective of defending the goods acceptably from manufacturer to customer. Though, new clientele desires have highly ranked concern of new obligations on the conceive and growth stage of wrapping encompassing logistic, financial and ecological purposes (Dimitratos et al., 2003; Hogg, 2003).

The logistic role is characterized by the means merchandise takes from the manufacturer to the buyer and the wrapping should fulfill the personal obligations inside the supply chain. (Gaudin, S.2008) The financial function anxieties the desires from trading connection, information of clientele insist and its promise influence on the buy conclusion process numerous components have made wrapping to a significant trading tool. (Atkinson, W.2004)

The ecological function interacts to the re-use, reprocessing and decrease of wrapping components in addition to the general environmental attentiveness. The function furthermore encompasses the market natural environment with buyer, affray and legislative needs. (Byrne, B. M.2001) The RFID tag can be advised as purpose of the packaging notion and thus advised for trading reasons e g charge reasons on the ledge in the store. Suppliers to international producers require addressing the execution of RFID tags into the packaging notion (Sörensen, 2006).

Challenges for RFID

The RFID expertise is founded on a self-acting recognition procedure relying on saving and distantly recovering facts and numbers utilizing apparatus in the pattern of tags or transponders. An RFID tag will not only be adhered to or included in merchandise or bundle but can furthermore have numerous other submissions, for demonstration in identification (Aval, 2006).

The reason with the tag is for saving or following data about a merchandise or bundle with the help of utilizing wireless signals. Chip-based RFID tags comprise silicon chips and antennas. Tags that are inactive do not need any interior power, while tags that are active need a source of power. (Yu, S-C. 2007) Nevertheless, in compare there is furthermore a growing buyer anxiety about the execution of the RFID tags in stores since buyer assemblies are worried about the likelihood that dealers use the tags for supervising buyers one time that they have left stores with their buys. Lawful and moral measures live round such matters in the United States and Europe, but they are not inevitably clear or unconditional (Erickson and Kelly, 2007).

The RFID expertise has conspicuously become a significant progress task in numerous localities but the innovation is presumed to arrive when the cost has come to such a grade that it can be utilized for common transport and circulation systems. Areas that are of exceptional interest mention to use inside wrapping of nourishment and other financial items and thus restoring barcodes (Karaer, O., Lee, H.2007)

One of the large-scale possibilities by utilizing the expertise is the flow of data that can be moved in the supply chain between the dealer and the end clientele (Glover and Bhatt, 2006; Spekman and Sweeney II, 2006).

The new expertise can be significant apparatus for coming to comparable benefit for companies in the supply chain, but clientele reactions can furthermore be an obstruction and hinder the introduction of new expertise and thus hold up the opening of products. The active or passive tag could either be integrated in the merchandise, or bundle of the manufactured goods. (Byrne, B. M.2001)Another possibility is to integrate the tag in a pallet for supervising reasons throughout the route of the supply chain. In numerous merchandise localities, it appears that supplier likes to apply the tag in the bundle (e.g. buyer electronics, food products), while buyer concerns are worried about accomplishment into the merchandise itself because of the risk of supervising the use or utilization of the genuine product. (Atkinson, W.2004)

A progressively intriguing direction to accomplishing a cost benefit arrives not inevitably from coming to capacity by finances of scale, but by logistic management. In some commerce logistics charges comprise such an important percentage of total charges that it is likely to make foremost cost decreases through basically reshaping logistics methods (Christopher, 1998). Another scheme is to groundwork the financial undertakings on service superiority. This can be sustained by utilizing new expertise for coming to better responsiveness and dependability from dealers by decreased lead times. (Lin, S-H et al 2002)

RFID can be a significant apparatus in carrying distinct logistic methods by giving the likelihood to insert supplemented worth services in the supply chain. Viable benefit can thus be drawn from the way in which companies coordinate and present undertakings inside the supply chain (Erickson and Kelly, 2007).

In alignment to gain comparable benefit over its competitors, a firm should consign worth to its consumers through accomplishing undertakings more effectively than its competitors, or by accomplishing the undertakings in a exclusive way that conceives larger differentiation in relative to competitors (Barney, 1991; Peteraf, 1993; Slater, 1996; Christopher, 1998). The RFID expertise can support such methods by coming to a higher effectiveness in the supply chain (Vijayaraman and Osyk, 2006).

Market for RFID systems

Although RFID expertise has been performing from the World War II, important expertise improvement in latest years has spurred prevalent interest and adoption of the expertise over some industries. Among the expertise improvement, the major assistance is lesser tags and advanced scanning apparatus which have assisted to decreased charges for applying RFID solutions. (Karaer, O., Lee, H.2007)

As companies become more proficient at influencing their IT communications, they are furthermore looking at other potential for coming to comparable benefits from savings in technology. (Gaudin, S.2008) With decreased charges for RFID expertise and improved motivation for utilizing expertise for advanced effectiveness, numerous new submissions are emerging. Barcode is the prime expertise that RFID may restore in the future, but as the charges of the expertise extend to down turn, its submission is certain to grow. (Lin, S-H et al 2002)

Initially utilized for infantry submissions RFID expertise is now accessible for numerous submissions inside the financial part like transport and distribution; financial street and rail transport companies to pathway their fleet, and for following financial goods inside a supply chain. (Yu, S-C. 2007)

Other submissions worry electrical devices toll assemblage schemes and issue of buy systems; vehicle parking and following one-by-one goods, or for recognition of cattle. RFID tags have furthermore been utilized to defend costly individual goods for example vehicles, yachts, watches, devices and so on. As, RFID tags are location-sensitive, they may also be utilized to increase individual security in general, or for supervising reasons

The possibilities for submission of RFID are many and by applying this expertise companies can accomplish cost savings plus advancing the service they can supply (Oldeén, 2006; Rehn, 2006). Although RFID expertise can be utilized inside numerous localities, the most conspicuous influences are presumed to be amidst retailers in the locality of record management. (Byrne, B. M.2001)

When Wal-Mart determined that its peak 100 dealers should start supplying pallets to its shops with tags in the start of 2005, they began a new age in supply chain of connections management. This order initiated dealers in the supply chain to aim on applying RFID expertise and to find essential solutions. (Gaudin, S.2008) This was merely the starting of the Wal-Mart transformation in this locality and numerous more dealers were tagging pallets and cartons and some one-by-one pieces by the end of 2006.

RFID offer functional advantages to any firm who desires to hold pathway of personal possessions and suppliers can advance their designing and implementation by integrating the expertise in the supply chain.

Obstacles to inserting RFID technology

One of the biggest technical obstructions to the accomplishment of RFID expertise in the retail part, or any other commerce, is the need of global benchmark format (Erickson and Kelly, 2007). If, for demonstration, every retailer values a distinct format the cost of execution might be unreasonable. Still, business organizations are employed supportive a standardization though lone retailers may be reluctant to share their comparable benefit come to by more effective inventory following or supply chain effectiveness. (Karaer, O., Lee, H.2007)

Another hindrance is affiliated with RFID scanners and tags. RFID tags produce UHF swell which are soaked up by water and other fluids and the swell are furthermore echoed by metals which may direct to incorrect reading. However other suppliers might deny obeying with a firm execution agenda due to high-costs affiliated with evolving it.

Chapter III: Research Methodology

Research Method

Depending on the application in an industry and the enterprise within an industry, A RFID system can be very complex, and its implementations may vary greatly. Conceptually

(1)An RF subsystem, which performs identification and related transactions using wireless communication

(2) An enterprise subsystem, which contains computers running specialized software that can store, process, and analyze data acquired from RF subsystem transactions to make the data useful to a supported business process. (Gaudin, S.2008)

(3) An inter-enterprise subsystem, which connects enterprise subsystems when information needs to be shared across organizational boundaries(Lin, S-H et al 2002)

However during literature review we observe that cost isn't the only thing perverting mass acceptance of RFID. Standards have not been fully implemented to govern the use of RFID. Radio frequency ranges have been setup, but the U.S. often operates on a range different from the rest of the world. (RFID Journal, Frequently Asked Questions, 2004) 

Every RFID system contains an RF subsystem, which is composed of tags and readers. In many RFID systems, the RF subsystem is supported by an enterprise subsystem that is composed of middleware, analytic systems, and networking services. However, in a supply chain application, a tagged product is tracked throughout its life cycle, from the manufacture to final purchase, and sometimes even afterwards (e.g., to support targeted product recalls or related service), and thus its RFID systems has to share information across organizational boundaries. (Yu, S-C. 2007)

However, profits always have a way of overruling any concerns. Wal-Mart is a chief example as it has become the pioneering icon of RFID technology. Wal-Mart is forcing its top 100 suppliers to implement RFID by January at no additional cost so the chain can monitor its inventory and stocked items. 98 will make the deadline, while 2 have received extensions for extenuating circumstances. (Warren, 2004)      

In this study the term business values means more customer satisfaction, better shelf replenishment, tracking of order goods throughout the whole process, time and labour cost reduction in order to make business more profitable. This study will touch all of these issues related to business values. (Byrne, B. M.2001)

"RFID has the potential to change the way we do business all around the world. It is a huge challenge, not just because of the sophisticated sensor-network technology, but also because of the vast systems integration and IT tasks ahead of us". (Paul G. Ranky, 2006)

Based on the outcome from the publications and the aim assembly interview, a self-administered review survey was evolved with multi-item scales. The equipment comprises of pieces to assess the RFID variables in the suggested study form, encompassing intrinsic qualities, advantages and dangers, and strategic influence on enterprise performance. (Atkinson, W.2004)

It furthermore encompasses inquiries about the grade of acquaintance with the expertise and the stage and aim of RFID implementation. In supplement, common demographics of respondents and their companies (e.g., place and work know-how, annual sales capacity, and figure of workers) are included. (Karaer, O., Lee, H.2007)

RFID intrinsic attributes. Dimensions were taken of the grade of significance of RFID as seen by the respondent for each of the inherent qualities advised vital for thriving execution. These qualities include both technological and enterprise features. Examples of the pieces utilized to assess these qualities encompass facts and numbers correctness, EPC measures, price of hardware, and middleware. Each piece was assessed utilizing a 5-point ranking level, with 1 being "very insignificant," and 5 being "very significant."

Research design

The major portion of this study will be carryout by using quantitative research methodology. In quantitative methodology use of objective measurement and statistical data to understand and explain the phenomena by the help of SPSS software

In exploring the effectiveness and efficiency of RFID applications, I will consider the key processes that make up the supply chain management process. These processes provide a framework for various aspects of strategic and tactical issues present in the management of the supply chain. (Byrne, B. M.2001)


  • How much information can an RFID tag store?
  • What's the difference between read-only and read-write RFID tags?
  • What's the difference between passive and active tags?
  • Who are the leading RFID tag vendors?
  • What are micro-electro-mechanical systems (MEMS)?

Data collection and company as a sample

Secondary data was collected from International Data Corporation (IDC). IDC approximated that the market for RFID associated conferring; implementation and organised services will augment 47 percent in 2004 and come to $ 2 billion worldwide by 2008. IDC furthermore accounts that almost two-thirds of associations are contemplating RFID submissions in 2004 demonstrated that they would depend on external assets in applying RFID. IDC furthermore show a farther development of the IT services part and facts and numbers administration affiliated with the implementation RFID.

Although the supply chain applicationt (inventory administration and control) are expected to account for the biggest dollar worth of the person going by car technologies RFID, reconsider of 450 developers worldwide are undertook Evans Data Group, accepts as factual that RFID is progressively utilised for security applications. (Yu, S-C. 2007)

However, as the cost of RFID tags extend to fall, the use of this expertise for inventory administration is expected to increase. The demands of Wal-Mart and other foremost retailers and the U.S. Department of Defense (DoD), needing their peak suppliers to use RFID tags on pallets and containers to pathway shipments has provoked the latest acquisition of technology. Both have handed out RFID compliance deadlines for their suppliers. (Lin, S-H et al 2002)

Wal-Mart anticipates its Top 100 suppliers to tag all shipments to Wal-distribution hubs in March, after January 1, 2005. Ministry of Defense, which established a alike time border for implementation, as well as the needed service assess of provide in the warehouses of the Ministry of Defense. Both stages of the demands in periods of two to three years because of the restricted number of shippers and circulation hubs for all shippers, components and circulation hubs or warehouses (Byrne, B. M.2001)

A review was undertook in March 2007 with a experiment of 2000 bosses and managers employed in retail industries. The experiment was drawn from three causes of promise participants: (a) a mailing register of 1,090 top bosses employed for foremost retailers in the U.S. amassed and supplied by a retail conferring association, (b) a register of 40 bosses who assist on the Advisory Board of the School of Merchandising and Hospitality administration at the University of Florida, and a assembly of professionals registered in two MBA trading and logistics categories at the University of Florida. (Atkinson, W.2004)

To make the review more befitting and to boost the answer rate, it was circulated in both hardcopy and electrical devices format. The published type of the self-administered survey was mailed or in person send. Two weeks subsequent, a postcard was dispatched to recall the executives of the review, and to boost them to take part, and announce them that the review was accessible online and supplied the world broad web address. (Lin, S-H et al 2002)

About a week subsequent, an e-mail prompt was dispatched to 595 managers whose e-mail locations were accessible to the investigators, from which 87 answers were obtained, of which 80 were regarded practical. (Gaudin, S.2008) Without 27 mailings that were came back as undeliverable from the experiment, the answer rate to the review was about 7 percent.

The most of the review members were older bosses and executives of retail companies, and their self-reported names or places include: (a) Chairman (19%); (b) Senior Vice President (17%); (c) Supply Manager (8.5%); Store administrator (4.7%); and Other (50.5%). The mean work know-how described with the present association was 8.5 years. The taking part companies comprise a very broad variety of dimensions as assessed by the figure of workers with the subsequent breakdown: (a) 100 or less (11.8%), (b) 101 to 500 (21%), (c) 507 to 1,008 (15.5%), (d) 1,010 to 5,015 (19.2%), (e) 5,050 to 10,150 (11.7%), (f) and more than 10,150 (22.9%). They furthermore encompass a broad variety of dimensions in periods of annual whole income, from $1.8 million to more than $ 49 billion, with the average of $3.14 billion. (Byrne, B. M.2001)

Selection of methodology

The study will adopted the said methodology in order to allow for an in-depth exploration of the activities and programs targeting with RFID. The following methods will be applied. 

  • Review of published research literature.

  • Review of the material development by the various researchers.

    Quantitative Research

    "The purpose of research is to discover answers to questions through the application of scientific procedures. These procedures have been developed in order to increase the likelihood that the information gathered will be relevant to the question asked and will be reliable and unbiased. To be sure, there is no guarantee that any given research undertaking actually will produce relevant, reliable and unbiased information. But scientific research procedures are more likely do so then any other method." (Selltiz et al, 1965, p. 2)

    By the use of quantitative research methodology the study will attain its main research aims i.e.

    a:  Facing challenges

    b:  Improve business values

    by the introduction of RFID technology. This study will develop the hypothesis based on research aim by the use of SPSS software.

    Data analysis

    An investigative component study was undertaken to recognize foremost extent of intrinsic attributes, seen advantages, and dangers of RFID. The validity of assesses was considered with confirmatory component investigation utilizing greatest prospect and utilized Cronbach's alpha to set up inter-item reliability. (Atkinson, W.2004) To analyze connections amidst RFID intrinsic attributes, insights of advantages and dangers and strategic influence on enterprise presentation, (Lin, S-H et al 2002) AMOS 4.0 was utilized to present Structural Equation Modeling (SEM) founded on a association matrix with the greatest probability. Overall fit of the form was considered by diverse statistical catalogues for example Chi-square (?2), Comparative Fit Index (CFI), Incremental Fit Index (IFI),

    Evaluation of Secondary Data

    Secondary data will be collected by the help of reading material like Books, Journals, Papers, Online Research and previous work done in the same area. Then the study will make a comparison that "what has been done and what need to be done"

    By looking as a prospect of IT Manager the study will address several issues while deploying RFID technology into a supply chain industry, and try to narrow down the gap or concerns that were left unaddressed in the previous researches.

    Companies using the RFID technology learning lessons in optimizing the technology However efficiently analyze manage and respond the magnitude of data gathered by RFID systems (Chau 2004; Clark 2004). Most big names are actively chasing RFID and encounter significant barriers in adopting the technology. (Yu, S-C. 2007)

    It is unlikely that RFID will replace barcodes in the near future but both technologies will be used until RFID has greater widespread use (RFID Journal, 2005; Zebra, 2004).

    After a very careful thought the study will be conducted by the use of quantitative research methodology in order to achieve the research aim, the study will develop a correlation between research aim and challenges (problems) and develop hypothesis based on research aim. (Byrne, B. M.2001)

    Ethical issues:

    1: Confidentiality

    2: Conflicts of interest.

    3: Issues concerning honesty and integrity.

    4: Discrimination.

    5: Responsibilities towards organization/people and individuals.

    6: Issues of competence.

    7: Adherence to moral and legal standards.

    8: Human rights issues.

    9: Organizational versus consultant values and ideologies.

    Chapter IV: Results

    Retailers' Perceptions of RFID Technology

    The SPSS software was used to draw the results. An investigative feature analysis exposed three main features of intrinsic qualities of RFID: (a) technological features, (b) industry features, and (c) data features. (Lin, S-H et al 2002) These three aspects accounted for 81.3 percent of the whole variance. Specific aspect items and feature consignments are shown in Table 2.

    Supposed RFID benefits. The first 25 things of RFID profits were examined by principal part aspect study with varimax rotation. Three items were abolished because of low loadings less than 0.52. Four things with Eigen value above 1.3 were found to comprise of 74 percent of the whole variance. (Lin, S-H et al 2002)

    Cronbach's alphas were elevated, varies from 0.86 to 0.97, suggesting an elevated degree of interior steadiness of items inside each feature. Supposed benefits of RFID contain four major aspects: (a) better inventory supervision, (b) speed of retail cycle, (c) incorporated trade model, and (d) well-organized store operation. Table 3 summarizes these four factors recognized from the factor study. (Yu, S-C. 2007)

    The data points out that the respondents observe better inventory supervision as the most significant profit of RFID, subsequently effectiveness of store operation, integrated industry model, and speed of retail cycle as shown in Figure 2.

    Perceived RFID threats. Factor study was done on the first list of 18 items used to calculate perceived threats linked with RFID. Three items were eliminated because of low things loadings, and the study shown three main features with Eigen value above 1, which answered for 74.6 percent of the whole variance. (Atkinson, W.2004)

    High Cronbach's alphas propose that the tool was dependable with high degrees of internal reliability. As shown in Table 4, the three major RFID threat factors include: (a) dearth of expertise, (b) complication of the technology, and (c) vagueness of the technology. The respondent's analysis the vagueness and dearth of standards as the mainly grave risks for employing RFID (see Figure 3). (Karaer, O., Lee, H.2007)

    Structural Equation Model

    The study form that hypothesized causal connections amidst RFID intrinsic attributes, seen RFID advantages and dangers, and strategic influence on enterprise presentation for retailing (see Figure 1) utilizing Structural Equation Modeling (SEM) investigation was scrutinized. AMOS 4.0 was utilized for the investigation with concurrent estimation of functional and estimation models. (Byrne, B. M.2001)

    The hypothesized functional form integrated one exogenous assemble of RFID intrinsic attributes, and five endogenous make ups - the first two components of seen RFID advantages, the first two components of RFID dangers, and one assemble of strategic influence on enterprise performance. (Yu, S-C. 2007)

    Measurement form results. The estimation form evaluation the latent constructs assessed in periods of discerned signs and recounts the validity and dependability of the measurements. Before checking the functional formula form, multiple signs of each assemble were grouped simultaneously in alignment to equalize estimation heaviness over sign. (Atkinson, W.2004)

    Next, 22 signs were utilized to assess six latent constructs by eliminating pieces because of reduced component loadings through confirmatory component study. The kindness of form fit for confirmation component investigation was elevated with chi-square worth of 242.147 (df = 172, p < 0.001), CFI of 0.940, IFI of 0.942 and NFI of 0.823.

    In supplement, the RMSEA worth of 0.077 was furthermore inside the suggested variety between 0.06 and 0.09 (Byrne, 2001). 

    Table 5 summarizes the outcomes of the estimation form, encompassing the factor loadings, benchmark mistakes; assemble reliability, and percentage of variance removed for each construct. (Lin, S-H et al 2002) All pieces laden considerably on their parallel latent constructs, signifying convergent strength was established. It is proposed that the dependability and variance taken out for a latent assemble should be computed individually for each various indicator assemble in the form utilizing sign normalized loadings and dimension errors (Hair, et al., 1998). Construct dependability for all put up exceeded .73 with an exclusion of Strategic Business presentation with .64. While the usually acquiesced upon smaller limit assemble reliability is .71, a smaller variety between .61 and .70 is advised agreeable (Hair, et al., 1998; Robinson, et al., 1991).

    The variance taken out assess, a complementary assess to the assemble reliability worth (Hair et al., 1998), exceeded .81. Discriminant authority is sustained when the Average Variance Extracted (AVE) between each two of constructs is larger than F ² (i.e., the squared association between two constructs). This benchmark is advised the toughest check of discriminant validity. As explained in Table 6, F ² not ever goes over AVE between each two of constructs. This verifies that our extents are legitimate and dependable for checking functional model. (Atkinson, W.2004)

    Structural form result. Structural formula modeling was utilized to work out the causal outcome of fundamental attributes of RFID on the advantages, dangers, and the strategic influence on enterprise performance. (Lin, S-H et al 2002) Overall form fit of the hypothesized form was not agreeable due to the little experiment dimensions (n = 70) with the chi-square worth of 278.96 (df = 181, p < .001).

    In alignment to advance the form fit, three signs (e.g., Y7: decreased shrinkage, Y13: Lack of teaching time, and Y14: supervision disinclination of innovative technology) with reduced component loadings were deleted. As shown in Figure 4, this alteration produced in the form with the chi-square worth of 160.199 for eighteen signs (df = 124, p < .05) agreeable by Hair et al.'s (1998) suggested level. (Byrne, B. M.2001)

    Other fit statistics were furthermore inside agreeable varieties (CFI = .95; IFI = .96; NFI = .83; RMSEA = .06). The distinction in chi-square worth between the hypothesized form and the changed form was statistically important (??² (57) = 117.76, p < .001), implying that the changed form was agreeable (Bagozzi & Yi, 1989).

    By analyzing causal connections amidst all constructs, it was discovered that two constructs of seen RFID dangers were not considerably associated to intrinsic attributes (?31 = .08, t-value = 0.56, p = .57; ?41 = .16, t-value = 1.18, p = .23) and strategic influence on enterprise presentation (ß53 = -.01, t-value = -0.03, p = .97; ß53 = -.12, t-value = -1.05, p = .29). Thus, the two constructs of seen RFID dangers and the hypothesized routes were omitted from the model. (Yu, S-C. 2007)

    The last modified functional form demonstrated an advanced fit with a chi-square of 68.19 (df = 60; p = .24). Other fit catalogues (e.g., CFI of .99, IFI of .99, NFI of .90 and RMSEA of .04) were furthermore improved. Comparison of the last form to the former one displays an important change in ?² relation to the distinction in level of flexibility (??² (64) = 93.609, p < .01) proposing that the changed form is acceptable. (Gaudin, S.2008)

    The last modified form interprets 27.6% of the variance of velocity advantage, 56.6% of inventory advantage, and 50.0% of strategic influence on business. Figure 5 depicts the last functional formula form in periods of normalized component loadings of signs for estimation form and important route coefficients for normalized route coefficients for each relationship. (Yu, S-C. 2007)

    The functional form proposes that intrinsic attributes of RFID had an important effect on velocity of retail cycle (?11 = 0.53, p < .001) and inventory administration (?21 = 0.75, p < .001). The form furthermore shows a powerful connection between strategic influence on enterprise presentation and velocity of retail cycle (ß31 = .55, p < .001) and enhancement of inventory administration (ß32 = .27, p < .05). The functional form presents empirical clues for the widespread conviction that diverse advantages of RFID can supply a means to advance inventory command and provide string of connections administration (Hardgrave, 2005; Jones, et al., 2004).

    Our investigation displays that the foremost consequences from the execution of RFID are automational consequences on operational methods and informational consequences on executive processes. (Lin, S-H et al 2002) The finding is reliable with the three-stage form proposed by Mooney et al. (1996) considering the influence of IT on enterprise value. According to Mooney et al. (1996), first alignment consequences of IT on operational methods are automational, producing mainly from the automation of few operational procedures; and the first alignment consequences of IT on executive methods are informational mainly through the accessibility of better data for command, (Karaer, O., Lee, H.2007)coordination, and decision-making. As an outcome of method automation and discovery, the data content of operational methods rises, therefore developing the second alignment effect (informational effects) of IT on outfitted processes. At the mean time, method innovations decrease the allowance of data processing and automate certain facets of administration methods, therefore conceiving second alignment consequences (automational effects) on executive processes. (Atkinson, W.2004) In other phrases, the second alignment consequences of IT are the elongation of the automational consequences of IT to managerial methods and the elongation of informational consequences to operational methods. Also, a third alignment renovational effect of IT is begun from the new abilities and new methods of doing business.

    If we request the overhead form to the influence of RFID on the provide string of connections, a three-stage form can be proposed. The first alignment influence of RFID on provide string of connections is affiliated with automational consequences on operational methods by decreasing work, automating inventory enumerate and command, and decreasing throughput time, and is furthermore affiliated with informational consequences on managerial methods through the accessibility of better data for output command, conclusion making, and coordination and asset usage. (Yu, S-C. 2007)

    In this phase, RFID is mostly applied at a various entity (retail shop, stores/supplies and production) in a supply chain. RFID is utilized to computerize certain operational methods, for example inventory enumerate, merchandise pin pointing, and items boats and receiving. At the identical time, the accomplishment of RFID would have informational consequences on executive methods since it develops real-time data for better organization. (Lin, S-H et al 2002) This contention is verified by our empirical clues showing that the most of RFID implementations has merely first alignment influence on the supply chain. This is likely because of an early stage of RFID implementation by associations.

    With the computerization of operational methods, the accessibility of wealthy data for managerial methods, and the expanded wideness and deepness of RFID implementation over the provide string of connections, RFID would have the second alignment influence on the supply chain. (Lin, S-H et al 2002)

    This engages not only informational consequences on operational methods but furthermore automational consequences on managerial processes. The aim of this stage will be the better comprehending and utilization of data developed from RFID systems. By investigating and utilizing such data, associations will be adept to advance asset utilization, boost outfitted elasticity and responsiveness, and advance value (informational consequences on operational methods).

    As well, the accumulation, investigation and use of data from executive methods will endow the mechanization/routinization of certain executive methods, such as organizing, inventory replacement and forecasting. Merely restricted empirical clues was discovered in this work to hold the second alignment influence of RFID on provide chains. (Lin, S-H et al 2002) This is not astonishing. (Karaer, O., Lee, H.2007) As RFID is yet at an starting stage of implementation, most associations only apply RFID at a smallest grade to rendezvous the demands from, for demonstration Wal-Mart and the Department of Defense and only a couple of associations are adept to completely utilize the data developed from RFID systems. (Yu, S-C. 2007)

    Chapter V: Findings and Discussion

    Demand for RFID

    The productive use of the huge facts and numbers apprehended by RFID schemes and the incorporation of RFID expertise all through the entire provide string of connections has been cited as a foremost topic in RFID implementation. (Gaudin, S.2008) Venture Development Corp. reviewed 102 Chief Technology Officers and discovered that facts and numbers administration and supervising has been ranked as one of most significant matters in the execution of RFID systems. Over half of the reviewed persons conveyed anxiety with the value and synchronization of the facts and numbers developed by RFID devices.

    Field study undertook by Wal-Mart, the Auto-ID Center and key dealers at Wal-Mart's navigate circulation center in Oklahoma for tagging of situations produced in the lifetime of 30 times more facts and numbers as goods were followed through the provide string of connections (Wilding and Delgado, 2004b).The third alignment consequences of RFID will be transformational, propelled by method discovery and provide string of connections redesign to accomplish comparable advantage. (Byrne, B. M.2001)

    In this phase, the execution of RFID schemes will revolutionize provide string of connections dynamics by considerably expanding provide string of connections clearness through the distribution of large allowances of unquestionable, real-time data. This facts and numbers can be utilized to enhance conclusion making all through the provide string of connections to boost provide string of connections effectiveness by decreasing lead times and inventory grades, whereas reducing stock outs, overstocks and shrinkage. These developments ought to lead to higher grades of clientele approval, sales and earnings, and sustainable comparable advantage. Based on the overhead considerations, we formulate the following propositions considering RFID expertise in the supply chain. Future study could check or change these propositions. (Yu, S-C. 2007)

    • P1. The consequences of RFID on outfitted and executive methods pursue a stage model.
    • P2. For outfitted methods, RFID would first endow automational consequences, pursued by informational consequences and then transformational outcomes.
    • P3. For executive methods, RFID would first endow informational consequences, pursued by automational consequences and then transformational results.
    • P4. For outfitted methods, RFID will help transformational consequences when the method is reengineered to considerably decrease output or provide string of connections cycle times.
    • P5. For executive methods, RFID will help transformational consequences when the method is reengineered to considerably advance comparable capability.

    In numerous situations, the profits are not due solely to RFID technology. As documented in the Introduction, the two Bain administration device reviews (

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