RFID Technology in

Supply Chains

Diverse Applications

Marathon races
Airline baggage tracking
Electronic security keys
Livestock tagging
Electronic toll pricing
Library
Video stores
Defense
Retailing
Stock levels, prices, expiry dates, remote access of products

SCM

RFID and SCM

Dramatic change in the management of supply
chains
Extraordinary Asset Tracking ability
Wal-Mart, Target. etc. have their suppliers RFID
enabled
World-wide demand of RFID tags $1 million
FMCGs and Food Processing companies at
various levels of RFID implementation
Pallet, Case, Item level

Overview of RFID
Readers and Tags capable of transmitting
and storing information
Tags
Tag readers
Edge servers
Middleware
Application software

Systems
ASSET

Antenna
READER

TAG

TCI/IP

Power

HOST SERVER

Customers
MIS

Application
Software

API

Tags (Transponder )

Active

longer distance (electronic tolls)

tags cannot be close to the reader
larger memories
powered by internal battery source
expensive, larger, heavier, about 10 years life
active tags are more effective in challenged environment

Passive
Powered from the readers
Lighter, smaller, and cheaper to produce
Used in close range

Memory
Read-only
Read/Write
Combination

Tag Construction
Memory unit RAM, ROM, Non-volatile programmable.
Logical Unit- Processor
Analog Unit- Antenna
Analogue
Circuitry
Data Transfer
Power supply

Digital Circuitry
Control Logic, Security
Logic
Microprocessor

Memory Unit
Non-Volatile
Memory
RAM
ROM

Frequency
Frequency Band
Low
100-500 kHz

Intermediate/High
10-300 MHz

Ultra High
300-950 MHz
2.4-5.8 GHz

Characteristics

Typical Applications

Short to medium read Access control,

range Inexpensive low
Animal
reading
speed.
identification,
(Mainly Passive)
Car immobiliser,
WIP inventory
Short to medium
read range
potentially
inexpensive
medium reading
speed
(Mainly Passive)

Access control Smart

cards, Item level
control, Ticketing,
Industrial and
scientific.

Long read range High

reading speed Line of
sight required
Expensive
(Active/Passive)

Railroad car monitoring

Toll collection systems

Read Range

Most commonly used

64bits to 256 bits
13.56MHz
512 bits - programmable

Readers
Antenna ( orientation, polarization, Protocol)
Multi-protocol and Multi-frequency (New)
Middleware
Reader integration, Data filtering
Application Software
Filter and process data- feed to customers
systems e.g. ERP, CRM, WMS etc.

SCM benefits from RFID

Tracking helps in

Inventory reduction
Increased visibility
Improved decision making
Improved collaboration amongst the partners
Improved pricing
Fewer stock-outs

Magnitude of benefits
Area of application
Level of application (pallet, case, item)

SCM Benefits from RFID

Manufacturing Process

Track the production of the part

Instructions to produce
Feedback to the ERP system about the status
Efficient bottleneck management

Distribution Process

Efficient consignment handling

Pallets with mixed cases (non-uniform) benefit more
Warehouse management
Shorter order-to-cash cycle

SCM Benefits from RFID

Collaboration
Increased matching of supply and demand
Reduction in bull-whip effect
Improvement in forecasting and demand management

Improvement in Inventory Shrinkage

Two percent of total sales is lost in inventory
shrinkage

Employee theft (48%)

Shoplifting (32%)
Administrative and paper error (15%)
Vendor fraud (5%)
Increase in number of empty packets

SCM Benefits from RFID

Collaboration
Increased matching of supply and demand
Reduction in bull-whip effect
Improvement in forecasting and demand management

Improvement in Inventory Shrinkage

Two percent of total sales is lost in inventory
shrinkage

Employee theft (48%)

Shoplifting (32%)
Administrative and paper error (15%)
Vendor fraud (5%)
Increase in number of empty packets

SCM Benefits from RFID

Stockouts
Constitute a major issue in retail industry
Appx. 11% of the top 2000 SKUs are out of
stock at any time
13% for fast moving/promoted goods
RFIDs smart shelves can help to reduce the
problem

Pricing
Helps in Differential and Dynamic Pricing

Bar Code Vs. RFID

More data , faster rate, long distance
-

Bar code 12-14 bit info. Vs. RFID 64-512bit

Read several items in same time
Dont need to open cases or pallets to read individual items
Manufacturing batch, production history, product handling
instructions, storage or delivery instructions, expiration dates,
warrantee and other details
RFID- Unique coding, products individually tracked (Visibility as well
as Utilization)

Bar Code Vs. RFID

Bar Code Deficiency

RFID Solution

Line of sight technology

Able to scan and read from different

angles and through certain
material.

Unable to withstand harsh conditions

(dust, corrosive), must be cleaned
and not difformed.

Able to function much better in such

conditions

No data adition option

Write enable

No unique identification

Unique codeing is possible and item

can be tracked at individual level

Slow and labour intensive

Fast and less labour intensive

Easy to tamper and copy

Difficult to copy and tamper

Little potential for further development Technology advancement is posible,

new chip, better packaging.

Portal Applications

Bill of Lading
Material Tracking

Conveyor / Assembly Line

Read / Write Operations

Higher Accuracy than Bar Code

Hand Held Application Categories

Batch

Wireless

Fixed Station

Application Examples

Wireless / Batch
Inventory Management
Where is it? What is it?
What is inside the box?

Material Handling
Aggregate / De-aggregate
What have I assembled or disassembled?
How many do I have? Do I have enough?

Material Handling
By Destination
Where is it going? Where has it been?
Should it be here?

Material Handling
Inspecting / Maintaining
Has this been repaired?
Is this under warrantee?
Has this been inspected?
Is this complete?
What is the assets status or state?

Shipping Validation

Tote/Box/Unit Level Inventory

Reduction In Out-of-stock
Smart shelves
Automatic indication out-of-stock, level measurement,
wrong item in wrong place, expired product

Differentiating items ( slow/fast moving)

- Responsive optimizing demand price
- Know customer preference quickly

1% uplift in shelf availability equates to 0.5%

sales increase
Reduced out of stocks by approximately 16 percent in
12 stores (wal-mart)

Price is displayed on shelves

Quick, instantaneous price change

Ease Of Real Time Data Sharing

RFID will solve the perennial problem of
forecasting in apparel industry
The easy realtime time data sharing
between the store and manufacturrer will
bring the flexibility
Supplier managed inventory Wal-Mart +
P&G

Reverse logistics

Unique coding tracking items individual level after sales even after
use

Call back any particular batch items- even after retailing

buy back offer, replacement offer

Environmental issue- disposal

At a recycling plant, parts and materials removed from used appliances
must be classified according to items that can be reused, thermally
recycled or discarded

Product performance review after use

Key issues
Cost

Regulation / standardization

Why sleeping for 50 years?

No standardization till 1999

Regulation Country specific radio frequency

Global SC !!!

Auto-ID, Mech Engg. MIT

2003 , technology transferred to EPC global

Partially standardized..work in progress

Piping Privacy issue

Embedded tag
If tag is not removed
If Your information is in wrong hand
If somebody rewrite and manipulate or erase the
data