1. Günter Kahr ( firstname.lastname@example.org ) Graz, am 24.05.2010
Topic: The justification of RFID-technology in apparel and pharmaceutical industry
Continually decreasing but not discontinuous reductions in costs, performance
improvements and the development of standards will enable radio frequency
identification (RFID) to be used broadly in enterprise processes. This will change the
course of business during the next years because the first big pilot implementations can
be seen on the market. However, RFID tags will not totally replace bar codes at any
industry segment. The two will coexist, with users applying the right data collection
technology for the right process situation. RFID is not the answer to every data collection
problem a business may encounter, but there are especially two industry segments which
seem to have a real benefit from the technology.
• the Apparel industry and
• the pharmaceutical industry
Both industry segments have quite good prerequisites because of their products, at
apparel there are no big metal materials which makes identification much easier and at
pharmaceutical there are products which are really worth to be tracked.
The most important thing that is missing from RFID, however, is a broad understanding
of the business applications of the technology and a recognition that each application of
the technology will mature independently. That is, technical feasibility which has been
established for a variety of applications proven in some pilot installations, but a real
business justification for the use of RFID significantly lags behind technical capabilities
in many applications.
2. Günter Kahr ( email@example.com ) Graz, am 24.05.2010
The motivation to implement RFID-technology is quite different in those industries: for
apparel it is of high interest to optimize the supply chain from the manufacturer which is
very often somewhere in Asia across the distribution centers to the store somewhere in
For the pharmaceutical industry it is of high interest to prove the originality of their
products. RFID can be a good technology to support them by their anti-counterfeiting
initiatives and to fulfill new upcoming legal requirements for tracking and tracing drugs.
1.1 RFID's Impact on Business
RFID will not totally replace bar codes — Calling RFID "the next bar code" or "bar
codes on steroids" caused the RFID community to hyperfocus on taking their established
bar-code-based business processes and "supercharging" them with RFID tags. This has
turned out to be unsuccessful, and the RFID community is recalibrating its expectations
with respect to how RFID will change the business landscape.
RFID will not follow a monolithic technology adoption life cycle across all
applications - Nonetheless, RFID will not move in lock step across applications of the
technology or industries where it can be deployed. However, just because RFID might
become feasible in hospital supply applications in 2007 doesn't mean that it will be
applicable for any other industry or application at this point. Some "spillover" effects
occur from one application to another, but they are small and swamped by the massive
amount of process engineering and technology development that must take place for any
one RFID application to mature.
Some typical new RFID applications which we can be found as implemented pilot
installations in the field focus to solve or improve business processes problems like the
once listed here:
• Unstructured Business Processes
3. Günter Kahr ( firstname.lastname@example.org ) Graz, am 24.05.2010
• Trust Shifting
• Mismatch of Personal Incentive
• Mobile Asset Management
• Supercritical Processes
• Inverse Location Scenarios
• RFID as a Low-Cost Data Transmission System
The aim of the dissertation is to prove the economical justification of RFID-technology
in the two branches based on new and innovative business processes and applications,
this hypothesis shall be confirmed to be true in case studies. A comparison to the
worldwide used and established EDI (electronic data interchange)-technology is possible,
here it was also important to define the relevant and possible processes, the format of the
data correlating to the item flow and to clearly bring up the business benefits for the
participating partners. The dissertation should be handsome background information for
decision makers in the defined industries and a guideline for new possible business
applications and services based on RFID.
The main objective is to bring up new and innovative business processes and services
because the implementation of the technology has to bring up clear benefits for the
companies otherwise they will not implement it. The range of processes which will be
analyzed is quite wide, in a minimum version it is just one identification point. On a
much more global view there can be business processes where companies all over the
world are involved. It is necessary to understand and analyze how a typical company
works in those industries, so at the beginning of the work there must be an analyze of the
current business processes. This information is the base for working out new possible
processes and services. I am confronted with a whole supply chain from the
manufacturer, to the distribution centers, to the stores and also back from the stores as
reversed goods. There are a high number of processes where you need different types of
4. Günter Kahr ( email@example.com ) Graz, am 24.05.2010
data from each member of the whole supply chain for some of those the justification of
RFID can for sure be shown.
Sub-Objective 1 is to detect the relevant identification points for RFID, because it will
not be useful to implement RFID at all identification points. There are business processes
which seem to be quite relevant for outstanding people who are not really involved in the
industry but for the company these processes are just of minimum relevance because
there are other mechanisms or influences where the problems are solved.
Some key questions at that point of research work are:
• Where can I efficiently use RFID to improve my process?
• Can I get better data quality?
• Which additional services are possible at this identification point?
Sub-Objective 2 examines economical benefit for each member in the supply chain. For
all of them RFID is an investment so it is necessary to bring it to the point what the
benefits are at their processes. Otherwise the acceptance of the technology will shrink to a
minimum. Here it is necessary to show what can really be done much more efficient with
current and next generation RFID-technology and also to show decision maker which
applications are just fakes. Here ECR (Efficient Costumer response), CPFR
(Collaborative Planning, Forecasting and Replenishment) and typical cost-structures in
supply chains are a main topic at this point.
Sub-Objective 3 is a survey of possibilities of current and new, upcoming RFID
technologies because in some areas of current RFID-technology and upcoming RFID-
technology the international standardization isn’t already done. Decisions at that level can
have enormous impact on strategic decisions. Here I need to highlight what are the
restrictions of the technology and what are the requirements of ISO and EPCglobal
standards which have to be fulfilled by the hardware manufacturers.
5. Günter Kahr ( firstname.lastname@example.org ) Graz, am 24.05.2010
Based on the common understanding that the studies of economy is applied science, and
that the interests of recognition is aimed on practical goals, we have to find the link
between theory and practice for RFID-technology. According to this, applied economical
science is based on the analysis of proceeding alternatives, development of scenarios and
models and the distribution of knowledge for operative decisions. A simple description of
the reality is not enough the focus of new and upcoming RFID-technologies applied to
business processes in textile and pharmaceutical industry is the defined goal.
An important aspect of any research process is to decide how to conduct the research and
to obtain the required knowledge. The treated problems are coming out of daily business
in the industry segments, the development of solutions is at the end a combination of
theory, lab and field-tests and practical possibilities. A model of explanation for
textile/pharmaceutical supply chain management, a model of description of their supply
chain management, a recommendation for business actions and an exhibition of case
studies has to be searched.
Because different research methods produce different kinds of knowledge I selected a
quite long list of suitable methods. It is vital to be aware of the relationship between the
research questions and the focus of research, the sort of knowledge required to address
that focus and the method of data collection to provide that knowledge. A comprehensive
answer to the chosen research question will only be possible if different kinds of data are
being collected to result in different but complementary types of knowledge:
Literature and database research as basics
In this category I have the possibility to get direct access to peer reviewed documents for
instance at Athens, but also to the universities which work together at the Auto-IT Lab
(University of St. Gallen, MIT, Cambridge, University of Dortmund). On the other hand I
get technical descriptions of RFID-hardware vendors and documentations of
standardization institutes from ISO and EPC.
6. Günter Kahr ( email@example.com ) Graz, am 24.05.2010
Experiments (Lab-tests and field-tests)
The data collection for this research project will include qualitative as well as quantitative
data to meet the aims of the research and to balance possible disadvantages of using one
Qualitative data is known to reflect reality better than quantitative data, as it takes into
consideration uncertainty, ambiguities and contradictions. It also provides richness and
details of a relatively focused area.
For lab-tests I have the possibility to use the test equipment of our company. As a
company we have one of the biggest RFID-labs in Europe where companies like Philips
Semiconductors and Infineon technologies are doing tests together with us.
Field-Tests in pilot installations, to get real data in typical environment, especially at the
area of RFID there can be big differences between lab and field test because of the
surrounding of the installation. To compare them will be a very informative way of
For data analyzing the use of quantitative data enables a relatively fast analysis of large
volumes of data in an effective and efficient way. Methods of descriptive statistic will be
used for data analyzing.
A benchmark is the result of running a program, or a set of programs, in order to assess
the relative performance of an object, by running a number of standard tests and trials
against it. Benchmark, is also commonly used for specially-designed benchmarking
programs themselves. Benchmarking is usually associated with assessing performance
characteristics of RFID hardware, for example, the range of RFID antennas.
With special lab-equipment I have the possibility to compare RFID-hardware in typical
user scenarios. It is of high importance to give an objective overview of the performance
7. Günter Kahr ( firstname.lastname@example.org ) Graz, am 24.05.2010
of RFID-equipment. The challenge is to fix the environment variables/parameters and to
have an identical bases installation of the equipment.
In Open Systems Interconnection (OSI) Architecture, a peer group is a group of
functional units in a given layer of a network in which all the functions performed by the
functional units extend throughout the system at the same layer. On this base I am
working in several peer groups
• Working-groups of the International Standardization Organization (ISO)
• Working and decision-groups of EPCGlobal
• Comprehensive transponder systems R&D working-group with Infineon
• A German working-group to the topic RFID & Fashion together with Metrogroup,
Gardeur, Gerry Weber, Mustang....)
Simulations with software-tools
Software simulation has become a useful part of modeling many natural systems in
economics and social science (the computational sociology) as well as in engineering to
gain insight into the operation of those systems and processes. The common feature of all
simulations is the attempt to generate a sample of representative scenarios for a model in
which a complete enumeration of all possible states of the model would be prohibitive or
impossible. On this base I would like to show a complete improved, more efficient supply
The goal of the case studies is to highlight and to reflect pilot installations and planned
rollouts in the industry segments on their economical impact for the involved companies.
There has to be a selection of relevant, important and typical pilot-installations to give
orientation for companies and decision makers in their future decisions on RFID projects
8. Günter Kahr ( email@example.com ) Graz, am 24.05.2010
in their own environment. Here I would like to work on a minimum of 2 case studies in
4 Ethical issues
RFID-supporters praise the amazing power to streamline and optimize supply chains. I
agree with those supporters. RFID will significantly increase the efficiency of supply
chains but the problem with RFID is that the RFID tags will be released into the world
and can become a privacy and security problem which is worth to be looked at.
Many argue that the depth of information which can be held by these tags, the ease with
which they can be incorporated into products and the ability to read this information at a
distance, present major issues for society particularly regarding privacy and should also
be considered in he whole research process.
TheFreeDictionary.com ( http://encyclopedia.thefreedictionary.com/rfid ) lists four main
privacy concerns regarding RFID technology as:
• The purchaser of an item will not necessarily be aware of the presence of an RFID
tag or be able to remove it.
• An RFID tag can be read at a distance without the knowledge of the individual.
• If a tagged item is paid for by credit card or in conjunction with use of a loyalty
card, then it would be possible to tie the unique ID of that item to the identity of
• RFID Tags create, or are proposed to create, globally unique serial numbers for all
products, even though this creates privacy problems and is completely
unnecessary for most applications.
Larry Ponemon (2004) ( http://www.ponemon.org ) warns of another potential problem
with RFID tags. He explains that over-reliance can lead to complacency in stringent
monitoring in the supply chain which can have devastating effects in apparel and
pharmaceutical industry segments.
9. Günter Kahr ( firstname.lastname@example.org ) Graz, am 24.05.2010
True world wide RFID is the "Internet of Things" on which “Frauenhofer Institute” in
Germany do a lot of research work will end privacy.
In my research project I also can’t ignore ethical aspects but there is no real focus on it.
RFID and ethics are a very hot topic and can bring a RFID-project to the ground, the
acceptance of the technology by customers/users is one of the main problems which we
are confronted with.
5 Indication of PhD level: contribution to knowledge
The research will contribute to existing knowledge in the area of RFID-projects with a
specific focus on the economical justification of RFID-technology in apparel and
pharmaceutical industry segments. The contribution will primarily consist of objective
valued, technological feasible business process and their economical relevant data for
members in the supply chain. Their business environment will be assessed and evaluated
end to end from the manufacturer to the consumer in apparel and pharmaceutical industry
on current and future available RFID-technologies. The dissertation shall highlight new
efficient business process and innovative service for all members of a typical supply
chain in the two industry segments.
6 Timescale and plan of work
ID Task Name Duration Start
Half 2, 2005 Half 1, 2006 Half 2, 2006 Half 1, 2007 Half 2, 2007 Half 1, 2008 Half 2, 2008
A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N
1 Basic Research 437 days Thu 01.09.05
2 literature & DB research 150 days Thu 01.09.05
3 international standards 300 days Mon 07.11.05
4 identifying research partners 150 days Thu 01.12.05
5 relevant business processes 350 days Mon 02.01.06
6 Tests & Experiments 265 days Mon 01.05.06
7 lab tests 200 days Mon 01.05.06
8 field tests 200 days Mon 03.07.06
9 HW benchmarks 50 days Mon 26.02.07
10 business process reenginieering 250 days Mon 01.01.07
11 data analyzing/statistics 100 days Mon 01.01.07
12 innovative processe examples 150 days Mon 12.03.07
13 innovative service examples 50 days Mon 08.10.07
14 applied in use cases 290 days Mon 08.01.07
15 textil usecases 100 days Mon 08.01.07
16 appareal usecases 100 days Thu 03.05.07
17 reviewing data and new trends 100 days Mon 01.10.07
18 finalizing research and documents 500 days Mon 23.10.06
19 finalizing research 60 days Mon 24.12.07
20 writing the thesis 500 days Mon 23.10.06 19.09
10. Günter Kahr ( email@example.com ) Graz, am 24.05.2010
Finkenzeller (2003) RFID Handbook, Fundamentals and Applications in Contactless
Smart Cards and Identification
Auto-ID Center (2003) 13.56 MHz ISM Band Class 1Radio Frequency Identification Tag
ThinkMagic (2005) Generation2 A User Guide
EPCGlobal (2004) EPCTM Tag Data Standards Version 1.1 Rev.1.24
Gartner research Jeff Woods (2005) RFID Enables Sensory Network Strategies to
ABIResearch (2006) The RFID Healthcare and Pharmaceutical Markets
Frost & Sullivan (2004) World RFID-based Application Markets
Auto-ID Center (2003) Auto-ID on Demand: The Value of Auto-ID Technology in
Consumer Packaged Goods Demand Planning
Auto-ID Center (2003) Auto-ID on the Move: The Value of Auto-ID Technology in
ISO 15693, 14000, 18000
ISO/IEC 18000 - RFID Air Interface Standards
Auto-ID Center (2005) EPC Technology Guide
Blaxter, L., Hughes, C., Tight, M. (2004) How to research. 2nd ed., Open University
11. Günter Kahr ( firstname.lastname@example.org ) Graz, am 24.05.2010
Denscombe, M. (2003) The good research guide. 2nd ed., Open University Press
Kromrey H. Empirische Sozialforschung 10-te Auflage UTB-Verlag
FH Salzburg (2005) Studie 6: Prozessoptimierung durch eingebettete Technologien für
University St. Gallen (2005) RFID Im Supply Chain Management Automotive
University St. Gallen (2005) RFID in the FMCG Supply Chain