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RADIO FREQUENCY IDENTIFICATION
Presented byAllison TippettCharlotte
ClaeysDonald SengurTeresa FongTolu Gamu
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WHAT YOU WILL LEARN AFTER THIS CLASS
1) WHY IS RFID IMPORTANT?
2) WHAT IS RFID?
3) BUSINESS APPLICATIONS
4) POTENTIAL CHALLENGES TO MANAGE
5) MANAGERIAL IMPLICATION
6) THE FUTURE OF RFID
Tu
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WHY IS RFID IMPORTANT?
Tu
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PROMISED BUSINESS BENEFITS

• RFID is a rapidly evolving technology that can
  dramatically improve operational efficiencies and
  customer service
• RFID will fundamentally transform the way
  information about products, equipment, animals
  and even people is gathered and analyzed in real
  time, providing new business opportunities across
  all industries.

Tu
Alan D. Smith (2005),Exploring radio frequency
identification technology and its impact on
business systems, Information Management
Computer Security, Vol. 13, No. 1
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TOP 10 LEADING COUNTRIES ADOPTING RFID BY NUMBER
OF PROJECTS IN 2006
Te
http//www.idtechex.com/research/articles/review_o
f_rfid_in_2007_00000799.asp, viewed October 24
2008
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SIZE OF MARKET - APPLICATION
Te

• Anonymous (2008),RFID Market Projections 2008 to
  2018, IDTechEx

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SIZE OF MARKET - REVENUE
Te

• Anonymous (2008), RFID Market Projections 2008
  to 2018, IDTechEx

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FORECAST OF GLOBAL SALES OF RFID TAGS
Te

• Anonymous (2008), RFID Market Projections 2008
  to 2018, IDTechEx

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TECHNOLOGY
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WHAT IS RFID?

• Radio Frequency Identification describes
  technologies that use radio waves to mechanically
  recognize people or objects.

Tu

• http//en.wikipedia.org/wiki/RFID, viewed October
  24, 2008

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HISTORY OF RFID

• RFID was founded in 1946, by the Soviet Union,
  which retransmitted incident radio waves with
  audio information
• The device was a passive listening device not
  an identification tag as it has been attributed
  as a predecessor to RFID technology.

Tu

• http//en.wikipedia.org/wiki/RFID, viewed October
  24, 2008

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FOUNDER OF RFID

• Mario Cardullo is the father of RFID
• He was the corporate planning officer to the
  chairman of the Communications Satellite
  Corporation (Comsat)
• After leaving Comsat, he put together a business
  proposal to develop the EKG terminal and his new
  idea, the RFID tag. Many people were interested
  in his ideas and gave him the necessary funds.
  With these funds he started the company ComServ
• Mario Cardullo received the first patent for a
  read-write RFID tag a passive radio transponder
  with memory.

Tu

• ,http//en.wikipedia.org/wiki/RFID, viewed
  October 24, 2008

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TIMELINE OF RFID
1940 1950 Radar refined and used, major World War II development effort.
1950 1960 Early explorations of RFID technology, laboratory experiments.
1960 1970 Development of the theory of RFID. Start of applications field trials.
1970 1980 Explosion of RFID development. Tests of RFID accelerate. Very early adopter implementations of RFID.
1980 1990 Commercial applications of RFID enter mainstream.
1990 2000 Emergence of standards. RFID widely deployed. RFID becomes a part of everyday life.
2000 now RFID explosion continues
Tu

• Directly quoted, http//ieeexplore.ieee.org/iel5/4
  5/33027/01549751.pdf, viewed October 24 2008

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RFID VS BARCODE
A
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PARTS OF RFID TECHNOLOGY
Tags Readers /Writers Softwares Antennas

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PARTS OF RFID TECHNOLOGY

• RFID tags
• Passive
• requires no interior power source
• only active when a reader is nearby to power
  them
• Active, or semi-passive (also known as
  battery-assisted)
• requires power source, usually a small battery
• RFID can hold up to 10Kbits of data.

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• ,http//en.wikipedia.org/wiki/RFID, viewed
  October 24, 2008

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PARTS OF RFID TECHNOLOGY

• Reader
• Read all the tags within reach in sequence
• Active tags send signals to readers
• Readers send signal to passive tags and read the
  data broadcast by the tags
• Writer
• A reader/writer could read and write information
  on reusable tags.

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• ,http//en.wikipedia.org/wiki/RFID, viewed
  October 24, 2008

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PARTS OF RFID TECHNOLOGY

• Antennas
• Placed on the tags
• To emit and receive the signals from the readers.

D

• ,http//en.wikipedia.org/wiki/RFID, viewed
  October 24, 2008

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HOW PARTS WORK TOGETHER

• WMS Warehouse Management System
• OMS Order Management System
• TMS Transportation Management System
• SCM Supply Chain Management
• CRM Customer Relationship Management
• SRM Supplier Relationship Management

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HOW PARTS WORK TOGETHER
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BUSINESSAPPLICATION- CASE STUDY
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RFID IMPLEMENTATION HISTORY

• April 30, 2004
• pilot testing
• 8 manufacturing participants
• 28 volunteers
• January 2005
• Mandate top 100 suppliers.

A
Anonymous (2004), Wal-Marts January Deadline,
Greenhouse Grower, Vol. 22, No. 10, pg. 34 John
S. McClenahen (2005), Wal-Marts Big Gamble,
Industry Week/IW,Vol. 254, No. 4, pp. 42-49.
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RFID EXPANSION

• June 2005
• another 200 suppliers joined the effort
• End of 2006
• All domestic suppliers participated
• 2006
• Expected international roll out.

A
Carol Sliwa (2004), Wal-Mart Revises 05 RFID
Expectations, Computerworld, Vol. 38, No. 21,
pg. 14
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WAL-MARTS ROI

• Will not disclose any information on how much
  money is being saved using RFID
• According to an estimate published in Fortune
  Magazine, Wal-Mart will receive a return of 21.5
  on capital with the use of RFID.

A
Christine Y. Chen (2004), Wal-Mart Drives a New
Tech Boom, Fortune, Vol. 149, No. 13, pg. 202
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SUPPLIERS ROI

• Short-term
• the cost of RFID overshadows any trickle-down
  effect received through increased sales
• Long-term
• increased visibility of the supply chain will
  help suppliers better production scheduling and
  inventory management.

A
John S. McClenahen (2005), Wal-Marts Big
Gamble, Industry Week/IW, Vol. 254, No. 4, pp.
42-49 David Blanchard (2008), Wal-Mart Lays
Down the law on RFID, Industry Week/IW, Vol.
257, No. 5, pp. 72-74.
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SUPPLIERS INCENTIVE

• Do not want to lose Wal-Mart as a distributor
  because of its size, power, and reach.

A
John S. McClenahen (2005), Wal-Marts Big
Gamble, Industry Week/IW, Vol. 254, No. 4, pp.
42-49
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RFID RESEARCH

• Wal-Mart sponsored research at the University of
  Arkansas
• Purpose to validate the usefulness and
  effectiveness of RFID technology.

Te
David Blanchard (2008), Wal-Mart Lays Down the
law on RFID, Industry Week/IW, Vol. 257, No. 5,
pp. 72-74
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RESEARCH ANALYSIS

• Analysis at the universitys RFID Research
  Center indicates in test scores that an automated
  RFID-enabled inventory system improves accuracy
  by 13
• This finding is important because inventory
  inaccuracy can lead to a 10 loss of profit
• With reports of inventory inaccuracy being as
  high as 65, the 13 improvement rate
  demonstrates how RFID can significantly improve
  this problem.

Te
Directly Sourced David Blanchard (2008),
Wal-Mart Lays Down the law on RFID, Industry
Week/IW, Vol. 257, No. 5, pp. 72-74
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KEY ISSUES FOR SUPPLIERS

• Cost
• Standards
• Technology infrastructure.

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KEY ISSUES - COST

• Wal-Mart pushes the cost of RFID onto its
  suppliers
• AMR Research estimated that the Wal-Mart
  suppliers as a whole have spent over 250 million
  on RFID technology and implementation
• Factors affecting cost are the number of tags
  needed, complexity of tags, types of products,
  and the distribution environment.

A
John S. McClenahen (2005), Wal-Marts Big
Gamble, Industry Week/IW, Vol. 254, No. 4, pp.
42-49
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KEY ISSUES - COST
Cost of Implementation
Tags and Readers 5 million to 10 Million
System Integration 3 million to 5 million
Changes to existing supply-chain application 3 million to 5 million
Data storage and analytics 2 million to 5 million
Total 13 million to 23 million
A
Directly Sourced John S. McClenahen (2005),
Wal-Marts Big Gamble, Industry Week/IW, Vol.
254, No. 4, pp. 42-49
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KEY ISSUES - STANDARD

• There are several RFID tag classes and there has
  not been an official standard which complicates
  the application and use of RFID.

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http//knowledge.wharton.upenn.edu/article.cfm?art
icleid1005, viewed October 8, 2008
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KEY ISSUES - TECHNOLOGY INFRASTRUCTURE

• Suppliers are realizing that the information
  being collected through RFID cannot be stored or
  used properly with existing databases
• Updates are needed to filter information
  especially in areas of business intelligence
  tools, data mining, the use of standard data
  definitions across the corporation
• The biggest obstacle of making RFID work is the
  managing of information.

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http//knowledge.wharton.upenn.edu/article.cfm?art
icleid1005, viewed October 8, 2008
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SCENARIO OF RFID IMPLEMENTATION
A case of product leaves the manufacturer and is
tracked and instantly routed when it reaches a
Wal-Mart distribution center. Theres no need to
rip open a case and inspect the contents because
the RFID reader has already identified the item.
At the store, the goods are monitored in
real-time so theres no need for inventory. When
the shelves are empty, RFID readers alert workers
to restock shelves. If Wal-Marts inventory is
depleted, a replenishment message is
automatically sent to the supplier.
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http//knowledge.wharton.upenn.edu/article.cfm?art
icleid1005, viewed October 8, 2008
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INDUSTRY IMPACT

• Many companies are worried about being left
  behind
• Target, Albertsons, and Walgreens have all
  started pilot programs and implementation.

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Christine Y. Chen (2004), Wal-Mart Drives a New
Tech Boom, Fortune, Vol. 149, No. 13, pg. 202
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OTHER BUSINESS APPLICATIONS
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CONTACTLESS SMART CARDS

• Largest RFID by far and business is booming
• Over 800 millions tags sold in 2007
• Identification cards that do not need to make
  contact with the reader to be read, or swiped in
  a special slot
• Applications building access, biometrics,
  parking, cashless vending/payment, time and
  attendance, loyalty programs, etc
• Available in plastic cards, key fobs, watches,
  documents, mobile phones.

Te
David C. Wyld (2006), RFID 101 the next big
thing for management, Management Research News,
Vol. 29, No. 4 Anonymous (2008), Strong growth
of RFID smart cards/ payment key fob, IDTechEx.
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CONTACTLESS SMART PAYMENT

• MasterCard Paypass
• Tap n Go
• As of Nov 2007, over 20 million MasterCard
  PayPass cards and devices issued globally
• Approximately 80,000 merchant locations around
  the world McDonald's, 7-Eleven, CVS, Duane
  Reade, Sheetz and Regal Entertainment Group.

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Anonymous (2007), MasterCard Says 20 Million
PayPass Contactless Cards Issued, Contactless
Payment Systems, Dec 10 http//www.mastercard.com
/us/personal/en/aboutourcards/paypass/, viewed
October 24, 2008.
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CONTACTLESS SMART PHONE

• McDonalds SK Telecom
• Shinchon branch near Yonsei University, Western
  Seoul, Korea
• First world Touch Order menu at a restaurant
• How it works
• Customer downloads Order program to their
  mobile phones
• RFID reader and menu at each table
• Customer plug the reader into their mobile phones
  and point at food items
• Bill is charged through the mobile phone
• When meal is ready, short message is sent to the
  phone so customer can pick up at the designated
  counter.

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Gautam (2007), Avoid long queues for ordering
your favorite burger with RFID, Contactless
Payment Systems, Sep 12
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CONTACTLESS SMART TICKET

• 2008 Beijing Olympics Games
• Prevent counterfeiting
• Ticket Embedded 13.56-MHz chip stores a unique
  serial number to ensure authenticity
• RFID readers that control doors and cameras
  throughout the facilities.

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Laurie Sullivan (2006), Olympics technology
RFIDs the ticket for secure games, EE Times,
Aug 4
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SUPPLY CHAIN MANAGEMENT
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SUPPLY CHAIN MANAGEMENT

• U.S. Department of Defense
• Mandate RFID for the militarys worldwide supply
  chain
• Applied to cases, pallets, packages of supplies
• Anything from uniforms to motor oil.

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Elizabeth Wasserman (2007), RFID Takes Root in
Washington, RFID Journal, May/June Anonymous
(2003), Military Edict Use RFID by 2005, RFID
Journal, Oct 3.
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SUPPLY CHAIN MANAGEMENT

• Shipping
• Combined with environmental sensors to monitor
  temperature, light, humidity, shock, positioning,
  etc.

A
David C. Wyld (2006), RFID 101 the next big
thing for management, Management Research News,
Vol. 29, No. 4 http//www.freshpatents.com/Contai
ner-security-seal-with-destructible-rfid-tag-dt200
80522ptan20080117058.php, viewed October 28, 2008
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RETAIL
C
Anonymous (2008), Real-World RFID in Retail
Custom-Tailored Solutions Deliver Benefits to
Apparel Retailers, Aberdeen Group Systems
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RETAIL

• Nokia Retail Store, Arraya Center, Kuwait
• http//www.youtube.com/watch?vLZylfbdu_1k

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ASSET TRACKING AUTO ID

• Asset Tracking
• Instantly determine the general location of
  tagged assets
• Auto ID
• Identify items and gather data on objects,
  humans, or animals without human intervention of
  data entry.

Te
David C. Wyld (2006), RFID 101 the next big
thing for management, Management Research News,
Vol. 29, No. 4
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ASSET TRACKING AUTO ID

• Auto ID
• Animals, Food, Farming
• Livestock disease control
• Improve traceability
• Condition monitoring
• Crime reduction.

Te
Elizabeth Wasserman (2007), RFID Takes Root in
Washington, RFID Journal, May/June http//www.el
ectrocom.com.au/rfid_animalid.htm, viewed October
28, 2008
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ASSET TRACKING AUTO ID

• Auto ID
• Identification and Access control
• Employee ID badges
• E-passports.

Te
Elizabeth Wasserman (2007), RFID Takes Root in
Washington, RFID Journal, May/June
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HEALTH CARE

• In 2006, the healthcare industry spent 90
  million on RFID. It is expected that cost of RFID
  will increase to 2.1 billion by the year 2016.

Tu
http//www.rfidhealthcare.com, viewed October 24,
2008
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HEALTH CARE

• Asset Management
• Locate movable assets.

Tu
http//www.rfidhealthcare.com, viewed October 24,
2008
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HEALTH CARE

• Patient Care
• Track and identify a patient correctly.

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http//www.rfidhealthcare.com, viewed October 24,
2008
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HEALTH CARE

• Inventory Management
• Identify inventory prevent out of stock
• Fight counterfeit and theft
• CVS one of nine participating in a pilot
  designed to establish an RFID operating and
  adoption model for the drug industry in 2004.

Tu
Elena Malykhina (2004), RFID Tests Are Positive
For CVS And Pharmaceuticals, Information Week,
September 30 http//www.rfidhealthcare.com,
viewed October 24, 2008.
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RFID SUPPLIERS
Tu
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POTENTIAL CHALLENGES TO MANAGE
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CONTROVERSIES

• High RFID Costs
• No global standard
• Technological immaturity
• Lack of robustness
• Information management
• Privacy concerns
• Video http//www.youtube.com/watch?vFVmD4iTXRLE
• Ethical problems
• Terrorism, blue jacked.

C
Daniel V. Hunt, Albert Puglia, Mike Puglia,
(2007), RFID A Guide to Radio Frequency
Identification, Wiley Simson Garfinkel, Beth
Rosenberg (2006), RFID Applications, Security,
and Privacy, Addison-Wesley.
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MANAGERIAL IMPLICATION
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ADOPTION ANALYSIS
  Perception Strategic Level Operational Level Implementation
Business Relationship Yes N/A N/A N/A
Convenience Yes N/A N/A N/A
Security Purpose Yes N/A N/A N/A
Benefits N/A Yes N/A N/A
Cost N/A Yes N/A N/A
Partner's Pressure N/A Yes N/A N/A
Number of Partners N/A Yes N/A N/A
Top Management Support N/A N/A Yes N/A
Errors N/A N/A Yes N/A
Standards N/A N/A Yes N/A
IT Application Deployment N/A N/A Yes N/A
Company Slack N/A N/A Yes N/A
Complexity N/A N/A Yes N/A
Data Synchronization N/A N/A Yes N/A
Industrial Sectors N/A N/A Yes N/A
Business Intelligence N/A N/A N/A Yes
Reading Accuracy/Algorithm N/A N/A N/A Yes
D
Source 1-21
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COST/BENEFIT/RETURN ANALYSIS

• Suggested correlation of expected return
• Expected Return c0() c1()Mandate c2(-)
  Standard_Ambiguity c3()IT_Integration
  c4()Spending c5(ns)Firm_Size
  c6(-)Manufacturing c7(-)Trade_n_Logistics

Source 1-21
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IMPACTS ON BUSINESS ACTIVITIES
  Impacts
Service Level ()
Business Orders ()
Production Policies ()
Total Cost of Supply Chain ()
Inventory Level (-)
Stock-Out Percentage (-)
Cost-of-Inventory Errors (-)
Source 1-21
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RFID THE FUTURE
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THE FUTURE OF RFID

• A Future Supermarket
• Video http//www.youtube.com/watch?veob532iEpqk

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POTENTIAL USES

• Item-level Tags
• Replacing barcodes
• Combination with others technologies
• Future improvement of RFID
• Future benefits of RFID.

C
Daniel V. Hunt, Albert Puglia, Mike Puglia,
(2007), RFID A Guide to Radio Frequency
Identification, Wiley http//www.wordquests.info
/RFID.html, viewed October 21, 2008 http//www.sm
so.net/RFIDHistory, viewed October 21, 2008
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ITEM-LEVEL TAGS

• Commercial use
• Wal-Mart tags on each pallets and cases
• Variety of companies engaged in item-level
  tagging American Apparel
• Today Reserved to luxury goods
• Tomorrow any goods
• Examples Italian manufacturer, Japanese
  students.

C
Daniel V. Hunt, Albert Puglia, Mike Puglia,
(2007), RFID A Guide to Radio Frequency
Identification, Wiley Simson Garfinkel, Beth
Rosenberg (2006), RFID Applications, Security,
and Privacy, Addison-Wesley.
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COMBINING W/OTHER TECHNOLOGY
Te
Daniel V. Hunt, Albert Puglia, Mike Puglia,
(2007), RFID A Guide to Radio Frequency
Identification, Wiley http//www.wordquests.info
/tech-advances.html, viewed November 02, 2008
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EXAMPLES

• Find your keys at home
• Find your car
• Human implant
• Your fridge keeps track of its contents.

C
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FUTURE IMPROVEMENT OF RFID

• Process Optimization
• Decrease in cost
• Decrease in size
• Better Memory, better power
• Technological developments
• Real-time information of business process
• Improve business performance
• Improve privacy and security.

C
Daniel V. Hunt, Albert Puglia, Mike Puglia,
(2007), RFID A Guide to Radio Frequency
Identification, Wiley Simson Garfinkel, Beth
Rosenberg (2006), RFID Applications, Security,
and Privacy, Addison-Wesley.
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• References
• Zaheeruddin Asif, Munir Mandviwalia (2005),
  Integrating the Supply Chain with RFID A
  Technical and Business Analysis, Communication
  of the Association for Information Systems, Vol.
  15, Article 24, March
• Yu-Ju Tu Selwyn Piramuthu (2008), Reducing
  False Reads in RFID-Embedded Supply Chains,
  Journal of Theoretical and Applied Electronic
  Commerce Research, Vol. 3, Issue 2, pp. 60-70
• S.K. Hargrove Sr, R. Queen Jr, B. Olubando A.
  LaRochelle, Developing a Low Cost RFID (Radio
  Frequency Identifiers) Middleware for Small
  Business Applications, Department of Industrial,
  Manufacturing and information Engineering,
  Clarence M. Mitchell, Jr. School of Engineering,
  Morgan State University, Baltimore, USA
• Mark Vandenbosch Niraj Dawar (2002), Beyond
  Better Products Capturing Value in Customer
  Interactions, MIT Sloan Management Review
• Hau Lee Ozalp Ozer (2007), Unlocking the Value
  of RFID, Production and Operation Management,
  Vol. 16, No.1, Jan-Feb
• Jonathan Whitaker, Sunil Mithas M.S. Krishnan
  (2007), A Field Study of RFID Deployment and
  Return Expectations, Production and Operation
  Management, Vol. 16, No.5, Sep-Oct
• Henning Baars, Hans-Georg Kemper, Heiner Lasi
  Marc Siegel (2008), Combining RFID Technology
  and Business Intelligence for Supply Chain
  Optimization Scenarios for Retail Logistics,
  Proceedings of the 41st Hawaii International
  Conference in System Sciences
• Claudia Loebbecke Claudio Heyskens (2006),
  Weaving the RFID Yarn in the Fashion Industry
  The Kaufhof Case, MIS Quarterly Executive, Vol.
  5 No. 4, Dec
• David H. Nguyen, Alfred Kobsa Gillian Hayes
  (2008), An Empirical Investigation of Concerns
  of Everyday Tracking and Recording Technologies,
  ACM

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• References
• Aditva Sharma, Alex Citurs Benn Konsynski
  (2007), Strategic and Institutional Perspective
  in the Adoption and Early Integration of Radio
  Frequency Identification (RFID), Proceedings of
  the 40th Annual Hawaii International Conference
  in System Sciences
• Anne Quaadgras, Who Joins the Platform? The Case
  of the RFID Business Econsystem (2005),
  Proceedings of the 38th Annual Hawaii
  International Conference in System Sciences
• Geng Yang Sirkka L. Jarvenpaa (2005), Trust
  and Radio Frequency Identification (RFID)
  Adoption within an Alliance, Proceedings of the
  38th Annual Hawaii International Conference in
  System Sciences
• Michael A. Jones, David C. Wyld Jeff W. Totten,
  The Adoption of RFID Technology in the Retail
  Supply Chain, The Coastal Business Journal, Vol.
  4, No. 1
• Charlie Fine, Natalie Klym, Dirk Trossen Milind
  Tavshikar (2006), The Evolution of RFID
  Networks The Potential for Disruptive
  Innovation, MIT Center for Business
• Uta Knebel, Jan Marco Leimeister Helmut Krcmar
  (2006), Strategic Importance of RFID The
  Perspective of IT Decision Maker in Italy,
  Journal of Information Technology Management,
  Vol. XVII, Nov 4
• Vic Matta Chris Moberg (2007), Defining the
  Antecedents for Adoption of RFID in the Supply
  Chain, Issues in Information Systems, Vol. VIII,
  No. 2
• Liping Liu Bindiganavale S. Vijayaraman,
  Information Integration A Review of Emerging
  E-Business Technologies, College of Business
  Administration, The University of Akron
• Christine Perakslis, Christine Robert Wolk
  (2005), Social Acceptance of RFID as a Biometric
  Security Method, IEEE
• Thomas Diekmann, Adam Melski Matthias Schumann,
  Analyzing Impacts of RFID in Supply Chains Using
  Joint Economic Lot Size Models, University of
  Göttingen, Institute for Information Systems
• http//www.rfidjournal.com
• H Jung, F.F. Chen B. Jeong (2007), Trends in
  Supply Chain Design and Management -Technologies
  and Methodologies, ISBN 978-1-84628-606-3.

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QUESTIONS?