Product tracking is required in three main stages of a supply chain:
manufacturing, shipping, and sales. This has been traditionally accomplished by labeling
each product with paper identification tags. However, paper is too inefficient to manage
on a large scale. In an assembly line that produces hundreds of thousands of products per
year, paper tags can easily become misplaced or destroyed. Also, it is impossible to track
each item individually in a shipment that contains thousands of items, creating the
opportunity for theft. Lastly, paper requires each stage must maintain its own tracking
information. For example, while a manufacturer is concerned with serial numbers and
product assembly status, a shipper is only interested in the product’s destination. Paper-
based tracking systems need to be replaced by a more reliable, efficient, and ubiquitous
One alternative is using a radio frequency identification tag (RFID) system
instead. By storing data digitally in a microchip, RFID’s can more efficiently and
reliably store the same information as a paper ID. A series of sensors reads and validates
the information on the RFID’s, and servers maintain a database of information pertaining
to each product. The information on the server is online, so its information can be
accessed at every stage of the supply chain. This paper will give a technical overview of
the RFID system, and then analyze the usefulness of RFID throughout the supply chain.
2.0 Technical Overview
An RFID system consists of three components – RFID tags, sensors, and central
servers. The flow chart of this relationship is shown in Figure 1. The RFID tag stores a
unique identification tag in read-only memory and has a built-in decoder for secure
wireless transfer of information. Sensors broadcast a radio signal that can be picked up
only by RFID’s within a determined distance. When an RFID tag reads the signal, it will
broadcast its stored information back to the sensor. The sensors then route the
information through terminals for a server to process. (7:44-46) This entire process
operates at 1,200 bytes per second, requiring fractions of a second to complete. (4:90)
Figure 1. A flow chart of an RFID system.
(Source: Takaragi, K., et al. “An Ultra Small Individual Recognition Security Chip”, IEEE-
Micro, Vol. 21, No. 6, Nov/Dec 2001, p. 46)
2.1 RFID Tag
An RFID tag is a miniaturized, self-powering, wireless memory module. It stores
data that can be accessed by a wireless sensor up to 30’ away. (6:114) It is implemented
with a 0.4mm x 0.4mm microchip and connected to a radial antenna. The chip is divided
into two circuits: digital and analog. The digital circuit serves as the brain of the RFID,
storing, decoding, and encoding data. The analog circuit serves as the brawn, providing
power and modulating signals. (7:46-47) Figure 2 shows a sample schematic of an
Figure 2. A sample schematic layout of an RFID chip
(Source: Takaragi, K., et al. “An Ultra Small Individual Recognition Security Chip”, IEEE-
Micro, Vol. 21, No. 6, Nov/Dec 2001, p. 47)
2.1.1 Digital Circuit
By using 0.18µm transistor technology, the digital circuit provides a compact
solution for data storage. Data is stored as bits in read-only memory (ROM), with each
bit corresponding to one transistor – “on” for 1, “off” for 0. Typically an RFID stores
64-256 bits of data. Because the feature size of the transistors is only 0.18µm, the
amount of storable data can be easily customized without significant change to the size of
the RFID. The data is written into the ROM when the RFID is manufactured, and cannot
be modified afterwards. (7:47)
The decoder ensures that the RFID can only be accessed by corresponding
sensors. It is composed of a series of complementary metal oxide silicon field effect
transistor (CMOSFET) logic gates. When a signal is received by the RFID, the signal is
passed through the logic gates to be tested for authenticity. The logic gate network, like
ROM, is programmed into the RFID during manufacturing and cannot be modified.
(7:46-47) This thwarts all unauthorized used of the RFID. If the signal does not pass the
tests, then it was not authentic, and the RFID takes no action. If the signal is determined
to be authentic, then the data stored in ROM is encoded by being fed backwards through
the logic gates and sent to the analog circuit for transmission.
2.1.2 Analog Circuit
The analog circuit takes advantage of the energy storing and filtering capabilities
of a capacitor to power the RFID. (7:47) Figure 2 shows a model of the circuit. The
antenna, which functions as an inductor, creates current when it picks up a radio signal
from a sensor. This current is used to charge the capacitor, which then discharges power
into the digital circuit. When data leaves the digital circuit as current, it is passed back
through the inductor, which generates a radio signal that is transmitted back to the sensor.
Figure 2. A model of the
analog circuit in an RFID tag
(Source: “Low Cost Electromagnetic Tagging Technology”, Internet:
Sensors are the simplest component of an RFID system. Their only function is to
sense the presence of an RFID, then relay that information. The sensor operates similar
to an RFID tag, using CMOSFET logic gates as a signal decoder and encoder. It encodes
a signal, then constantly broadcasts it. As stated above, when an RFID that can properly
decode the signal comes within the sensor’s vicinity, it will broadcast its information
back to the sensor. The sensor then simply decodes the identification information using
the same methods as mentioned above, and transfers then sends the information to
terminals that route the information to the server. (5:1606)
The true power of an RFID system lies in the servers. RFID tags and sensors only
have the ability to store and transmit an identification code. Given this code, the server
can perform any task deemed relevant by the user. For example, the server can display
the product number, originating factory, manufacturing date and time, name of the
employee that assembled the product, destination, and price for each item individually.
In addition to just storing information, the server can process the stored information and
provide further information for the product. Examples include being able to search for
assembly instructions for a product, automatically report to a supervisor whenever a
product is moved, and triggering alarms if a product theft occurs. These functionalities
can be added or removed to the content of the user without any change to the RFID’s or
Another advantage of the server is the ability to perform all its tasks ubiquitously.
Because servers can be accessed via the internet, the same server can be used at all stages
of the supply chain. This eliminates any miscommunication between the different stages.
Shippers can find out exactly where each product has been and where it is going, retailers
can lookup assembly process for the product to provide better marketability, and
manufacturers can look up sales statistics and make appropriate adjustments to their
production. The ubiquitous functionalities available in the servers create practical
applications of the RFID system throughout the supply chain.
3.0 Supply-Chain Applications
All the amazing technologies in an RFID system would be useless if there were
no good applications for it. However in its 5 year existence, groups have been
experimenting with RFID’s at all stages of the supply chain. The benefits they have
reaped are now serving as examples for other companies that have yet to, or are currently
transitioning to RFID. As more groups adopt RFID, more applications for it are being
discovered. While all the examples are too numerous to show, some highlights are
presented in the following paragraphs.
3.1 Manufacturing Application
RFID’s allow the manufacturing process to be much more tightly streamlined
than with paper ID’s. Ford Motor Company is an example of a company that has already
made the transition to RFID’s. Their facility in Cuautitlan, Mexico operated for years on
paper identification sheets. However, due to the hostile environments on the assembly
line, many sheets were lost, switched, or ruined, resulting in difficulties in quality control.
If welders did not burn a tag, then it was lost in a pile of clutter. With 300,000 to 400,000
cars and trucks being produced each year at this plant, this resulted in increased
production oversights, errors, and costs. (4:16)
To alleviate their paper-caused headaches, Ford sought out RFID technology to
replace paper in their assembly line. They began to program RFID tags with serial
numbers and mounted the tags to vehicle frames. As the vehicle moved through the
assembly line, sensors could monitor each individual vehicle, and the server reported
what had already been completed on the vehicle and what further steps were needed.
This drastically cut production time by eliminating the need to manually scan each
vehicle, then digging through a filing cabinet to locate information. Vehicles could
proceed non-stop through the assembly line, being identified instantaneously when they
passed by a sensor. (4:16)
RFID technology in the assembly line caught on, and was expanded on by others.
A carburetor builder configured its RFID system to not only track their carburetors on the
assembly line, but to use the RFID’s to bring up assembly instructions at each stage of
the line. Their server detects what model carburetor was being built, and sends
instructions for that model directly to the worker. (3:90) This system eliminates any
possibility of assembly error due to a human error in identifying the model and the time
needed to find the right set of instructions. Because of Ford’s pioneering effort and
innovations of other companies, products travel down the assembly line much quicker en
route to the shipping ports
3.2 Shipping Application
In shipment, there are many opportunities for losses to occur. Typically a single
shipment can contain thousands of items. Because of this, it is too impractical to track
each item individually, so each case (typically containing 50-100 products) is labeled and
tracked. Since individual items are not tracked it is very easy for corrupt employees at a
warehouse or trucking company to create one or two “missing” items during shipment.
As long as the majority of items in the case remain, the retailer will not know the
Platex was one of the first companies to try to cease this trend, placing RFID’s on
all of their bras. When a case of bras passes by a sensor, each bra will be sensed,
notifying the shipper of exactly how many are in the case, where they have been, and
where they are headed. (2:35) This gives the shipper the ability to track every item in
shipment and be notified if even a single item is lost during shipping. Further, the
shipper will know exactly when and where it happened and take appropriate action. In
doing so, they have set a standard of getting 100% of what goes out from their
warehouses into stores.
3.3 Retail Application
Once a product arrives at the retailer and is inventoried, the only way of tracking
products is by their individual barcodes. Since it is impractical to scan a barcode
everywhere a product moves in the store, many retailers have a hard time locating
products in storage. This results in out-of-stock items, slow inventory turnover, and poor
customer satisfaction. In the extreme case, a misplaced item in inventory will cause the
retailer to purchase another shipment from the manufacturer.
The world’s largest retailer, Walmart, is leading the effort for switching to RFID-
based inventory systems. According to Linda Dillman, Walmart’s Chief Investment
[RFID] technology will help us know where inventory is all the time. Today, we
might know a case is somewhere in the store, but we don’t know if it’s in the back
room or on the shelves. … That will help improve our shelf management … We’ll
see better tracking and moving of inventory, … improved quality inspection, fewer
out-of-stock items resulting in improved shopper satisfaction… (7)
That is why Walmart is requiring that by the end of 2005, their entire inventory be
equipped with RFID’s. In doing so, they are setting the standard for other companies to
follow. Failure to follow will cause companies to be left behind manually organizing and
locating items in inventory at the same time that Walmart is selling those same items at a
rapid pace. (7)
All the benefits of RFID can be reaped without a big hit to company budgets.
RFID tags cost 2 or 3 cents apiece. Motorola has engineered a system to mount the RFID
chip onto a self-adhesive cardboard backing. An antenna is printed onto the cardboard
with conductive carbon-based ink, and then the chip is glued into place. (1:24) This
technology, combined with the declining cost of microchip fabrication, has driven the
price of RFID tags down to a level suitable for mass production.
Sensors, while more much more expensive than tags, are not needed in as large of
quantities. A Japanese company called Topan Printing Company just introduced a low-
power RFID sensor with a retail price of only $17. With a range of 30’, a large
100’x100’x100’ warehouse would only need ten sensors to cover every cubic inch, and
then some. (9)
Servers are the most expensive component of the RFID system. Sun
Microsystems, the world’s leading server producer, sells their premier Sun Fire B1600
Enterprise Server for $24,000. While high in price compared to the other components in
the RFID system, servers are a one-time investment. The high bandwidth of the Sun Fire
server enables the sensor network to be expanded without a significant loss in processing
power. (8) So if a company opens another factory, hires another shipper, or expands its
retailer base, the server will be able to seamlessly handle the expansion. Also, since only
one server is needed throughout the entire network, the benefits far outweigh the one-
RFID technology can more than adequately replace paper-based technology in
supply chain product tracking. Not only does an RFID system perform the same product
identification functions as a paper-based system, but it does so at a much higher speed
and reliability level. On top of this, RFID technology allows for the integration of other
functionalities into the system. As shown, the benefits of the system far outweigh the
costs. A few pioneering companies have set the standard in product tracking by
implementing RFID technology. Now all the other companies in the world have the
option of following, or being left behind in the dust.
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