RFID Technology

Keeping pace with RFID Ashish Siva David T Erik Grenoble Graduate School of Business – MIB21A

RFID Technology What is RFID ?

R adio F requency Id entification

A micro-chip in a label used to transmit data when the label is exposed to radio waves

RFID Basics What are the main components ?

RFID Tags

RFID Reader – Antena and transceiver(reader)

Host Computer

Major players: IBM, Texas Instruments

Integrated chip

RFID Basics How it works ? Antenna Passive Active

Decades of RFID Emergence of standards. RFID widely deployed. RFID becomes a part of everyday life. 1990 – 2006 Commercial applications of RFID enter mainstream. 1980 - 1990 Explosion of RFID development. Tests of RFID accelerate. Very early adopter implementations of RFID. 1970 - 1980 Development of the theory of RFID. Start of applications field trials. 1960 - 1970 Early explorations of RFID technology, laboratory experiments. 1950 - 1960 Radar refined and used, major World War II development effort. RFID invented in 1948. 1940 - 1950 Event Decade

RFID in Retail Supply Chain Video from IBM which demonstrates how RFID technology is helping the supply chain become more efficent through shipment tracking. 30 seconds This video is available at: www.towers.fr/essays

RFID in Retail Supply Chain Retail Supply chain process Supplier Manufacturing Retailer/ Distributor/ Distribution Retailer store Consumer

RFID in Retail Supply Chain Automate the Supply chain process RFID TAG Reader

RFID in Retail Supply Chain Benefits at a glance

Decrease in lost stock

Faster locating stock

Lower labour requirement

Reduction of out-of-stock

Low safety stock level

Facilitation of JIT

RFID in Retail Supply Chain Benefits at a glance

Benefits for Retailers

5 – 8 % improvement in shelf stock rate

5 – 10 % lower inventory levels

3 – 4 % lower logistic costs

2 – 10 % higher sales due to lower out of stocks

Benefits for Manufacturers

5 – 30 % lower inventory levels

2 – 13 % lower warehouse and transportation costs

10 – 50 % reduction in lead-time (facilitates JIT)

1 – 5 % higher sales due to lower out of stocks

Effect on consumers In the future all items will be tagged

Food shopping example:

RFID enabled shopping carts

Fewer empty shelves

No queues

RFID fridge of the future

Personal shopping cart (as in Germany)

Effect on consumers A video advertisment from IBM which shows how IBM believe RFID labelling in supermarkets will change the shopping experience. 30 seconds This video is available at: www.towers.fr/essays

Effect on consumers RFID will be used for tracking

Border crossing

Pay as you go car insurance

Baggage tracking at airports

Child tracking – Verichip

Effect on consumers A short clip from CNN showing how Verichip technology of implanting humans with RFID tags is currently being trialed in some US hospitals. 20 seconds This video is available at: www.towers.fr/essays

Effect on consumers Other RFID uses with implants

67 hospitals using RFID human implant

Night club admission

Effect on consumers Retailers dream, libertarians nightmare “ How would you like it if, for instance, one day you realized your underwear was reporting on your whereabouts?” California State Senator, 2003. RFID labelled as SPYCHIP by some Consumer awareness low

Effect on Management decisions What will be the effect on management decisions?

Opportunities

Time

Being able to respond more quickly

Taking quicker decisions

Feedback

Minimize human factor

Savings

Streamlining orgs

Long term savings

Implications

Will require faster responses!

Competition on new terms

Cost

Adapt existing systems and buying new ones

Software

Hardware

Train people

System failure

What to do?

Personal Integrity

Ethical? Customers & Personnel

Laws: labeling of goods carrying chips

Effects on different levels of Management

General effects

Training, faster decision making

Middle Management

Job cuts

Higher/Executive Management

Understanding (better)

References and recommended reading Publications A Workshop Report from the Staff of the Federal Trade Commission. 2005. Radio Frequency Identification: Applications and Implications for Consumers. Diane Publishing. Finkenzeller, K. 2005. Second Edition. RFID Handbook: Fundamentals and Applications in Contactless Smart Cards and Identification. John Wiley & Sons Inc. Glover, B. and Bhatt, H. 2006. RFID Essentials. O'Reilly Media Inc. Practel, Inc. 2004. RFID Report: A New Horizon for Accountable Society. Information Gatekeepers, Inc. Shepard, S. 2005. RFID: radio frequency identification. McGraw-Hill. Websites en.wikipedia.org/wiki/RFID www.rfidjournal.com/ www.rfid-weblog.com www.spychips.com www.verichipcorp.com www.wethepeoplewillnotbechipped.com