Use of rfid in operations management

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  • 1. Use Of RFID In Operations Management Use of RFID in Operation Management – A Report GROUP O2: HARINI VALLURI SOMAN NAHATA ANKIT JANGALWA GANDHARV RAJ SETHI VISHWAJEET NARAYAN 2011Operations Management 1
  • 2. Use Of RFID In Operations ManagementTable of ContentsIntroduction ...............................................................................................................3 Is this the only identification technology?................................................................3History........................................................................................................................4Types of RFID ..............................................................................................................5 1. Passive RFID tags .................................................................................................5 2. Active RFID tags...................................................................................................5How RFID Works .........................................................................................................7RFID and operations management ..............................................................................8 Supply Chain Automation ........................................................................................8 Asset Management .................................................................................................9 Inventory systems ...................................................................................................9 Manufacturing Lines.............................................................................................. 10 Identification of patients and hospital staff ........................................................... 10 Other Major Applications of RFID .......................................................................... 10 Timing ............................................................................................................... 10 Livestock ........................................................................................................... 10 NADRA .............................................................................................................. 10Problems and Concerns............................................................................................. 11 Global standardization .......................................................................................... 11 Privacy .................................................................................................................. 11 Human Implantation ............................................................................................. 11Future of RFID ........................................................................................................... 11Conclusion ................................................................................................................ 12Operations Management 2
  • 3. Use Of RFID In Operations ManagementINTRODUCTIONRadio frequency identification is the use of an object (typically referred to as an RFIDtag) applied to or incorporated into a product, animal, or person for the purpose ofidentification and tracking using radio waves. This means that an RFID device isphysically attached to the object that we wish to identify (at a later time). This is knownas tagging and the object is said to be tagged. In case of objects this tagging may be anRFID device that is glued on it, in case of animals it may be an injectable tag that isinjected through a special syringe into the animal’s body while in case of a human, and itmay take the form of a wrist band that a person wears. The wrist band contains an RFIDdevice.With RFID, the electromagnetic or electrostatic coupling in the RF portion of theelectromagnetic spectrum is used to transmit signals.Most RFID tags contain at least two parts. One is an integrated circuit for storing andprocessing information, modulating and demodulating a radio-frequency (RF) signal, andother specialized functions. The second is an antenna for receiving and transmitting thesignal.Some tags can be read from several meters away and beyond the line of sight of thereader.RFID is also called dedicated short range communication (DSRC).IS THIS THE ONLY IDENTIFICATION TECHNOLOGY?No, this is not the only identification technology. The most ubiquitous identificationtechnology is Barcode. This is the funny set of thick and thin lines that we see on allitems e.g. computer parts or shampoo bottles. They help identify what the item is, whomade it and such kind of information. At the supermarket, the checkout clerk has abarcode scanner who read this information and uses it to generate the bill.This also makes faster to take inventory, when a shop assistant moves with a handheldbarcode reader and checks the items present on the shelves. There is no need to writean items name, brand, description and other information. This all information is storedas a number (represented by a bar-code). The bar code scanner reads off this bar codeand hence the number. This number acts as a pointer to particular information. Adatabase correlates this number with all necessary information like manufacturer, item,description etc.Operations Management 3
  • 4. Use Of RFID In Operations ManagementSo, the main thing that differentiates the RFID from Barcode reader is that barcodereader can read the barcode one at a time, this means that however faster barcodereaders you have, however sophisticated barcode software you have, you will always bephysically constrained by one at a time rule, while RFID reader can identify hundreds oftags in its range within fraction of second.HISTORYToday RFID technology is one of the hottest technologies around the world but it is nota so new technology. The earliest development of an RFID technology was in the 1940sfor aircraft recognition systems. In 1946 Leon Theremin invented a tool for the SovietUnion which retransmitted incident radio waves with audio information. Even thoughthis device was not an identification tag, it is considered to be a predecessor of RFIDtechnology. Similar technology, such as the IFF transponder invented in the UnitedKingdom in 1939, was routinely used by the allies in World War II to identify aircraft asfriend or foe. Transponders are still used by most powered aircrafts to this day.The first true ancestor of modern RFID is a passive radio transponder with memory Theoriginal business plan presented to investors in 1969 showed its uses in transportation(automotive vehicle identification, automatic toll system, electronic license plate,electronic manifest, vehicle routing, vehicle performance monitoring), banking(electronic check book, electronic credit card), security (personnel identification,automatic gates, surveillance) and medical (identification, patient history).Animal tracking was one of the earliest large scale uses of this technology yet the firstRFID implementation for operations management was at General Motors in 1984.After its first time implementation in 1984, RFID has been used in hundreds ofoperations and hence enhanced the performance of the companies, using thistechnology. The thing that has made this technology popular is the absence of line ofsite and its working ability in tough conditions.Operations Management 4
  • 5. Use Of RFID In Operations ManagementTYPES OF RFIDThe RFID tags comes in two major types which are as follows 1. Passive RFID tags 2. Active RFID tags1. PASSIVE RFID TAGSPassive RFID tags have no internal power supply. So theygenerate power to activate the circuit from the incoming radiofrequency signal from the reader and transmit an extremelyweak signal back to the reader using the back scatteringprinciple Tag contains an antenna, and a small chip that stores asmall amount of data. Tag is powered by the high powerelectromagnetic field generated by the antennas – usually indoorways. It has a longer life and limited range.2. ACTIVE RFID TAGSUnlike passive RFID tags, active RFID tags have their owninternal power source (which is normally a battery); it isused to power the circuits and to broadcast the responsesignal to the reader. Because of the battery the active tagsare larger in size, and more expensive to manufacture.Active tags has a smaller life (may be a decade) and longerrange than the passive tags. Active RFID tags are used forhigher value items e.g. a. Shipping containers b. Electronic assetsOperations Management 5
  • 6. Use Of RFID In Operations Management Active RFID Passive RFIDTag Power Source Internal to tag Energy transferred using RF from readerTag Battery Yes NoAvailability of power Continuous Only in field of readerRequired signal strength to Very Low Very HightagRange Up to 100m Up to 3-5m, usually lessMulti-tag reading 1000’s of tags recognized – up Few hundred within 3m of to 100mph ReaderData Storage Up to 128Kb or read/write 128 bytes of read/write with sophisticated search and access Operations Management 6
  • 7. Use Of RFID In Operations ManagementHOW RFID WORKSA Radio-Frequency Identification system has three parts: a. A scanning antenna b. A transceiver with a decoder to interpret the data c. A transponder - the RFID tag - that has been programmed with information.In tracking of some object, the whole tracking process starts with the enquiry signalfrom the scanning antenna or the receiver. It sends the radio signal to the object withthe RFID tag. As the tag comes in contact with the radio signals it transmits data, whichis burned into its memory, back to the receiver or reader device. The reader, thenforward the data to the computer system, for database checking and processingpurpose.Operations Management 7
  • 8. Use Of RFID In Operations ManagementRFID AND OPERATIONS MANAGEMENTBeginning with bar code in the early 1970s, operations management has dependedupon various AIDC (Automatic Identification & Data Capture) technologies to providethe accurate, real-time input to manufacturing and supply chain systems so critical toerror-free control and visibility of material flow.The first RFID deployment for operations management was at General Motors in 1984when tags were attached to chassis carriers to serve as "license plates" that when readtriggered the just-in-time delivery of the appropriate components for a given vehicle tothe assembly line.The unique license plate number buried within each $100 RFID tag was system-linked tothe build plan for the specific automobile at the beginning of the line. Upon assemblycompletion, the tagged carrier was returned to the head of the line and the processrepeated for another vehicle.At the time, a typical tag could take 200 to 300 trips down the line before failing -- and,the resulting cost-per-trip of 30 to 50 cents more than justified the value of the data toprocess integrity.Since 1984, RFID has been deployed in hundreds of operations where environmentalconstraints or the absence of line-of-sight access to the tag precludes the use of barcoding. Examples include item or carrier identification while moving into or throughovens or machining operations where the tag must provide reliable feedback in spite ofextremes of temperature or contamination by paint or coolants.SUPPLY CHAIN AUTOMATIONFurther, in the supply chain, RFID has been and is now being used in a wide variety ofindustrial applications ranging from product carriers to lift trucks to containers, tires andbeer kegs. More recently, RFID labeling of cases and pallets is making a significantcontribution to improved supply chain tracking and visibility for US and Europeanretailers and many of their suppliers. Logistics & Transportation is a major area ofimplementation for RFID technology. For example, Yard Management, Shipping &Freight and Distribution Centers are some areas where RFID tracking technology is used.Transportation companies around the world value RFID technology due to its impact onthe business value and efficiency.Operations Management 8
  • 9. Use Of RFID In Operations ManagementASSET MANAGEMENTRFID (Radio Frequency Identification) combined with mobile computing and Webtechnologies provide an effective way for organizations to identify and manage theirassets. Mobile computers, with integrated RFID readers, can now deliver a complete setof tools that eliminate paperwork, give positive proof of identification and proveattendance. Web based management tools allow organizations to monitor their assetsand make management decisions from anywhere in the world. Web based applicationsnow mean that third parties, such as manufacturers and contractors can be grantedaccess to update asset data, including for example, inspection history and transferdocumentation online ensuring that the end user always has accurate, real-time data.Organizations within the Plant industry are already using RFID tags combined with amobile asset management solution to record and monitor the location of their assets,their current status, whether they have been maintained.INVENTORY SYSTEMSAn advanced automatic identification technology such as the Auto-ID system based onthe Radio Frequency Identification (RFID) technology has significant value for inventorysystems. Notably, the technology provides an accurate knowledge of the currentinventory. With RFID solution, inventory can be updated in real time without productmovement, scanning or human involvement. Our fully automated system allowsinventory status to be determined and shipping & receiving documents to be generatedautomatically. The system could also trigger automatic orders for products that are lowin inventory. The benefits of using RFID systems are:  Provides total asset visibility  Gives full inventory history  Allows reduced inventory-stocking levels  Facilitates "Just-in-Time" deliveries  Provides full process control for products in the facility  Reduces lead-time  Reduces overall cost of operationsOperations Management 9
  • 10. Use Of RFID In Operations ManagementMANUFACTURING LINESManufacturers can track and record in-process assembly information into the RFID tagas an item progresses along the line. The tag information could later be read to producea shipping list and invoice. The tag could also remain with the item for later use by fieldpersonnel during installation and maintenance. RFID solutions are ideal formanufacturers who build several products on a single production line, or manufacturecomplex or customized products. Assembly line personnel could use an RFID reader toverify which processes have been completed, to determine which inspections or testsare required and to automatically update the central production database.IDENTIFICATION OF PATIENTS AND HOSPITAL STAFFHospitals use RFID systems to identify patients and permit relevant hospital staff toaccess medical records. A number of U.S. hospitals have begun implanting patients withRFID tags and using RFID systems, usually for workflow and inventory management.In October 2004, the FDA approved USAs first RFID chips that can be implanted inhumans. The 134 kHz RFID chips, from VeriChip Corp. can incorporate personal medicalinformation and could save lives and limit injuries from errors in medical treatments,according to the company. Shortly after the approval, authors and anti-RFID activistsdiscovered a warning letter from the FDA that spelled out serious health risks associatedwith the VeriChip. According to the FDA, these include "adverse tissue reaction","migration of the implanted transponder", "failure of implanted transponder","electrical hazards" and "magnetic resonance imaging [MRI] incompatibility."Portable RFID reader and barcode scanners are being used to check patient’s ID andmedications before administering any drugs.OTHER MAJOR APPLICATIONS OF RFIDTIMING – used in sports event to track timing of athletes as they start a race and passthe stop line.LIVESTOCK - RFID tags are implanted in animals for tracking and linking the animal tofood, location. It’s applicable to farming as well as exotic breeds in zoos.NADRA – NADRA has developed an RFID-based driver license that bears the licenseholders personal information and stores data regarding traffic violations, tickets issued,Operations Management 10
  • 11. Use Of RFID In Operations Managementand outstanding penalties. The license cards are designed so that driving rights can berevoked electronically in case of serious violations.PROBLEMS AND CONCERNSGLOBAL STANDARDIZATIONThe frequencies used for RFID in the USA are currently incompatible with those ofEurope or Japan. Furthermore, no emerging standard has yet become as universal as thebarcodePRIVACYThe two main privacy concerns regarding RFID are: 1. Since the owner of an item will not necessarily be aware of the presence of an RFID tag and the tag can be read at a distance without the knowledge of the individual, it becomes possible to gather sensitive data about an individual without consent. 2. 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 indirectly deduce the identity of the purchaser by reading the globally unique ID of that item (contained in the RFID tag).HUMAN IMPLANTATIONThe Food and Drug Administration in the US has approved the use of RFID chips inhumans. This has provoked concerns into privacy of individuals as they can potentiallybe tracked wherever they go by an identifier unique to them. There are concerns thiscould lead to abuse by an authoritarian government or lead to removal of freedoms.FUTURE OF RFIDDespite the controversies and concerns, RFID technologies are expected to grow quicklyover the next few years because 1. Its worth will increase at a very rapid pace in the coming years. 2. Every industrial operation that needs the data to be collected has application of the RFID systems.Operations Management 11
  • 12. Use Of RFID In Operations Management 3. Companies seek to improve their operations 4. The price of RFID drops. 5. The use of the technology is expected to grow very fast in the fields of health care, transportation, pharmaceuticals, retailing etc. The largest growth in revenue from this technology is expected to be from the retailing, commercial services and health care services.The growth in the commercial services can be accounted for consumer applications forexample in libraries, rental items tracking etc.CONCLUSIONRFID is the technology which has finally come of the age. It has myriad possibilities anduses and can be used in more and more places. So the RFID technology has finally gotattention of the business world because of its serious advantages over the bar codetechnology and mainly because of the positive return on investment.The ability of usage of RFID in absence of physical line of sight and working inenvironmental constraints has made the use of this technology in almost every field ofour daily lives from basic tracking of the cattle to the complex RFID systems in carmanufacturing assembly lines. The RFID technology has increased the efficiency of thebusinesses with great effectiveness and accuracy. It helped them improve theiroperations manifold, in a very short period of time.This is the time not to wait for the cost of the technology goes down, but to implementit straight away, because when we compare the benefits of the technology with the costof the tags, it is much more than the cost as it saves millions of dollars of the companyhence providing positive ROI on RFID investments.But there are some disadvantages of the technology as well. The major disadvantage isthe privacy issues. As the person acquires the product having RFID tag, which is notvisible to anyone, except the reader its location can be tracked and the personalinformation about that person can be gathered without his permission.So we can say that RFID technology has made businesses efficient but it has also createdsome problems as one is discussed above. Besides these proper implementation of thetechnology is also important to get substantial benefits from this technology but itseffective implementation requires good understanding of this technology what it can doand what it cannot do. This can only be achieved by suitable training.Operations Management 12
  • 13. Use Of RFID In Operations ManagementReferences:http://www.en.wikipedia.orghttp://www.electronics.howstuffworks.comhttp://www.webopedia.comhttp://www.rfid.orghttp://www.openlibrary.orghttp://msdn.microsoft.com/en-us/library/ms954628.aspxOperations Management 13