FRID technology applications and overview

RFID Technology

As is the case with all forms of new technology, radio frequency identification (RFID) has been both praised as the next step in business evolution and demonized as overcomplicating and overpricing the supply chain process. RFID is based upon wireless network protocols, and when used in supply chain management, is generally used as a replacement of the more traditional barcode system. The most notable advantage of RFID is the fact that it can be used in large warehouses, where conditions are harsh, and reading tags undergo considerable abuse. While damage to barcodes result in the inability of a laser system to read them, RFID tags can withstand a greater amount of abuse. Added to this is the advantage that these tags can be read from a further distance than barcodes. It is also true however that there are considerable challenges, such as the costs involved, to the widescale use of RFID systems. These systems do however hold significant advantages that can offset the disadvantages, particularly as time progresses.

Ann R. Thryft (2007) mention four of the most notable challenges in implementing RFID systems in supply chain management: 1) the already mentioned costs involved, particularly for the higher frequencies that are needed; 2) standardization issues in terms of networks and tags; 3) the movement of tag data from the pallet to the item level; and 4) integrating RFID networks into systems already existing. She also however cites official representatives of RFID technology as saying that the new systems are gradually being integrated in large supply chain management endeavors such as those of Toshiba, and that it is simply a matter of time before all the problems mentioned are handled.

Specifically, one of the challenges is the significant complexity of the system, along with standardization and integration issues. Infrastructure, according to the author, pertains to much more than only the tags and readers that ultimately provides the framework of the system. There are also sensor networks and systems that collect and analyze data. The nature of RFID systems in supply chain management currently operates on the basis of cases and pallets. It is the goal of manufacturers however to provide Ultra-high frequency readers at a level that is viable on a more global scale than is currently the case. What makes them expensive is the fact that they are not commonly manufactured, and also that they are sold in low volumes.

Thryft (2007) mentions a new approach in the design of RFID readers, which is software defined radio (SDR). According to the proponents of the system, this architecture provides the flexibility and cost viability that had been elusive to date. It also provides greater viability to the more widespread use of the technology. What makes the architecture particularly viable on a wide scale is the fact that it separates distinct modules and provides the user with the choice of optimization. Cost and power consumption then become flexible, and smaller businesses could also potentially benefit. SDR hardware also incorporates the ability of quick and remote upgrade, and provides a less expensive infrastructure than has been the case to date. SDR provides a solution in terms of hardware. However, Thryft notes that barriers to the use of RFID lie not so much in the hardware itself as it does in the complexity of its installation and use.

The standardization issue contributes to the complexity barrier. Standardization is a requirement for the large-scale use of RFID systems in supply chain management, as mentioned above. RFID technology is however very complex, and this makes standardization difficult. Specifically, RFID operates on a number of different levels, each of which includes a number of standards. Each frequency for example includes a number of standards, and each standard furthermore provides a number of versions, each with its own set of options.

Attempts at standardization includes the Generation 2 air interface standard. This provides communication between RFID readers and tags, and allows more information and greater security in each tag. Such developments indicate that the technology may become more viable in terms of both price and standardization in the future.

In an earlier article, Michael Caton (2004), also mentions the standardization issue.

In order for RFID technology to be a viable replacement for the currently used bar code system, standardization is vital. EPCgloble Inc. provides the standards of universal product code information in both bar codes and RFID chips. According to Caton, this company will then also work towards establishing standards for the standardization of RFID use in terms of a variety of applications in the supply chain. This will simplify the interaction between shipping companies, as well as the way in which goods are stored and shipped within each company.

The company also addresses privacy concerns by dictating how RFID data can be erased. Erasing this data is however the retailer's responsibility. Mainly, concerns are that retailers may not take the responsibility of erasing individual item data after these are purchased by customers. This concern is legitimate and will have to be addressed fully by means of standardization.

Caton (2004) also describes the many potential uses and advantages of RFID technology for supply chain management. Indeed, he states that the technology can be useful not only for complex data organization systems, but also for simple tasks such as moving goods.

Specifically, Caton notes that RFID tags are either passive or active, with the former being lower in cost. Passive tags receive energy from the reader and transmit data to the reader again. Active tags have their own power supply, and simplifies the process considerably by transmitting data directly to the reader. These tags can also interact with other devices on the supply floor. Caton (2004) mentions that passive tags will probably be more commonly used on supply floors as a result of their lower cost.

Cost, as mentioned above, is a significant consideration, particularly for small businesses.

Caton concurs with Thryft in this matter; cost remains a barrier to the widescale implementation of RFID technology. Particularly, Caton mentions that testing and resources will be required to determine even the basic implementation of the technology. Such resources may be impossible for small businesses to reach. This is an issue that is however being addressed by companies such as Sun Microsystems Inc., which focuses on helping companies to determine how to most cost-effectively implement RFID.

When taking the above concerns into account, it is important to also keep in mind that all developing technology is initially somewhat expensive and complex. However, with time, both prices and complexity levels lower as the technology becomes standardized and widely used. Rather than therefore right away demonizing RFID as mostly unviable in terms of any of these factors, it is also important to consider the potential advantages is offers.