Pros and Cons of Rfid Technology

August 15, 2012 § Leave a comment

I. Rfid Advantages

Radio Frequency Identification provides a important assistance that is capable of revolutionizing the way companies track products. There are many benefactors of this technology: the military, retailers, suppliers, consulting firms, producers of the technology, and consumers. Rfid provides companies with a best alternative to bar-coding because no line-of-sight is needed to read a pallet, a carton, or a stock with a Rfid tag. Rfid tags also comprise facts on the stock that is literally readable and accessible for the reader. Rfid will also begin to automate company’s supply chain, reducing labor costs, human error and time spent checking in products.

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In 2005, manufacturers and suppliers requesting new bids from the military must be Rfid compliant on four different levels: packaged operational rations, clothing, tools, and weapon system repair parts and components. The military requires that all cartons and pallets are shipped with a military Shipping Label which displays shipping data. The branch of Defense has created the Rfid military compliance explication as a way to help suppliers and manufacturers meet the military’s new standards for Rfid. The program is run by Avery Dennison retail facts Services, and they were commissioned by the Rfid military compliance Solution. Avery Dennison retail facts Services sells the Rfid tags to companies which must be affixed close to the military Shipping Labels to comply with branch of Defense regulations.

Pros and Cons of Rfid Technology

The U.S. military is recovery an big estimate of money by using active and passive Rfid systems. By using Rfid for transportation and transportation systems in Iraq and Afghanistan, the military is able to diagnose and fix problems much faster than before. The implementation of Rfid in just this area will save the military close to half a million dollars this year. The U.S. Government has contracted Ibm to do explore on the current Rfid being used currently in the military and the potential time to come applications for Rfid in the military. The military has been successful in creating best visibility throughout their supply chain expanding their productivity and stability.

Retailers and other companies that have a demanding supply chain can gain an benefit on the field by using Rfid in the supply chain. By demanding that all levels of their supply chain be Rfid capable is a big investment. The productivity increase that follows the introductory venture and implementation for companies will pay for their investment. Wal-Mart was the first retailer to use Rfid in their distribution centers and warehouses, prompting many companies to succeed in their footsteps once Wal-Mart’s success was realized.

Rfid is very successful with retail companies because it improves productivity, saves on human labor costs, and gives companies real-time visibility with all their products. Rfid tags use an Electronic stock Code (Epc) which is an upgrade and a change for the Universal stock Code (Upc) system. “Epc has a 96-bit code that has digits to identify the manufacturer, stock class and the individual item. Manufacturers regain registration numbers & assign them to products. Each estimate is unique to a given item.”

The cost of a tag is in any place between twenty-five to fifty cents. In the next five to ten years it could be reduced to five cents per tag. At some point in the near time to come tags could fall to one cent tempting companies to use Rfid tags on every stock in a store. Wal-Mart says that since their shop now have Rfid, it makes it easier to keep store shelves stocked allowing employees to interact with customers.

Target was able to save on their venture for implementing Rfid, following in Wal-Mart’s footsteps as Wal-Mart had already paved the way and suffered the pitfalls of implementing a new technology. In expanding to the lower implementation costs, many of Target’s suppliers had already begun preparing for the switch over to Rfid assuming Target would succeed Wal-Mart. Target as a large retailer knows how important it is to be able to supply real-time data on pallets, cartons and shipments up and down-stream straight through their supply chain.

A break-through in Rfid technology was made by Intermec, Inc. In May of 2006, with new rugged and reusable Rfid tags. These tags can be written thousands of times; it can deal with hazardous chemical exposure, and withstands temperatures from -50 degrees Fahrenheit to 250 degrees Fahrenheit. In October of 2006, Intermec released a new version of the rugged, reusable Rfid tag, along with wide-band antenna that can be used on any surface in any part of the world.

Rfid makes the business world seem like a smaller place, even companies like Wal-Mart who are very big and have a large integrated supply chain. Rfid enables companies to be more productive with their time and space. companies that couple some newer supply chain technologies with Rfid could see great results. Combining auto-picking with Rfid would sell out man-power needed, time needed to move pallets and cartons around a warehouse, and time needed to send pallets to their proper destination. The goal of a company’s supply chain should be to sell out time needed to be productive, by automating as much of the supply chain as possible. It reduces human error, and machines are capable of running twenty-four hours a day and cost less than human labor. The

application of Rfid for a large business like Wal-Mart or Target, as well as smaller retail shop can ensure a best shopping touch with more in-stock items and a more knowledgeable store.

The Rfid shop is booming and many technological companies have gotten in the game producing Rfid parts and systems. In many cases being a producer of Rfid components and systems also allows you to come to be a consulting firm for the technology. Hewlett Packard (Hp) is one of the largest companies developing Rfid systems. Hp’s goal is to make it as easy and affordable as potential for a business adopting Rfid technology. Hp has touch in the Rfid field, as they were one of the early adopters of the technology and have been very successful integrating it into their business. Hp began with two larger clients, Hasbro (produces children’s toys) and Conros (a large Wal-Mart supplier). Hewlett Packard has created two Rfid Centers for Excellence, one in California and one in Taiwan, to demonstrate new potential uses for the technology, as well as how it can be implemented into a business. More centers are slated to be opened throughout the world, along with Great Britain, Singapore, and Tokyo Rfid Centers for Excellence.

The Rfid shop sits at roughly one billion dollars in 2006 and has varying estimates as to the increase potential of the market. Estimates of Rfid shop size in 2008 vary in any place from .3 billion by Idc, to .2 Billion by the Yankee Group. As shown in outline 1 in the appendix, most of the manufactures is made up of sales of hardware, tags, readers and other bodily products of Rfid. roughly 20-25% of the shop is made up of consulting work for the technology and the last 5% is made up of software for Rfid. The two biggest areas firms are concentrating on are the yield and consulting sides of Rfid.

The biggest challenges for producers and consultants alike are the reliability and durableness of Rfid systems and products. It is hard to simulate the wear and tear a stock will touch over time. Hp has made testing Rfid products one of their benchmarks, providing intense field-testing of Rfid to ensure its durableness and quality. A competitor of Hp is Ibm, who agreeing to Amr explore is the shop leader in Rfid. Ibm has over eleven years touch working with Rfid, and like Hp, they were an early adopter of Rfid technology. The benefit that Ibm has over Hp is there world-renowned consulting services, coupled with their massive networking capabilities. Ibm’s services promise more results than Hp’s Rfid systems mainly because of Ibm’s consulting expertise. Ibm works with companies to locate the best avenues to implement Rfid, attempting to maximize Return on venture (Roi) by reducing one someone per shift from manually tracking products allowing them to focus on value-added manufacturing activities. Ibm also focuses on other ways to heighten Roi including, gift a one-time savings of 0,000 in operating costs, continuous fabrication line operations, best customer assistance providing real-time facts on products, and less errors and delays cause by human error.

Rfid began to take off once companies like Wal-Mart and Target, and the U.S. military demanded that their top 100 suppliers must adopt Rfid technology. Many suppliers were not ready for a move like this, a move that would thoroughly retrofit their current operations at a high cost to the supplier. There were some suppliers that welcomed the turn in technology and already began implementing Rfid in anticipation of Wal-Mart and the U.S. Military’s question that their suppliers adopt the new technology. Wal-Mart demanded that their top one hundred suppliers would need to be Rfid ready by January 2005, and to Wal-Mart’s surprise, twenty three extra suppliers have volunteered to make the turn to Rfid. There is a new generation of tags that hit the shop in 2005, called the Gen 2 Standard, which make Rfid more spellbinding to suppliers who have no Rfid systems in place. The Gen 2 Rfid improves on the first generation of Rfid by expanding read times, expanding read ranges, and read tags more accurately.

Suppliers and manufacturers will notice the benefits of implementing Rfid into their organizations streamlining parts of their operations. Return on venture is the most important factor for a business implementing Rfid. Suppliers will see their Roi increase as human labor hours are decreased, human errors are decreased and interoperability is increased. Rfid increases the visibility of the suppliers so they can do their job in real time, assuring that the exact box is sent to the exact location. It also saves money in the long-term for manufacturers and suppliers because Rfid will save time spent inventorying and tracking products. An benefit for suppliers and manufacturers using Rfid is customization of products in a shorter period of time. Smaller suppliers and manufacturers will have a harder time implementing Rfid, as costs range from 0,000 to million to implement the technology, but as costs go down more companies will adopt Rfid.

Rfid does have an additional one potential benefit for suppliers that could give them invaluable information. For Wal-Mart suppliers, readers are set up at the back door so suppliers know when their shipments have arrived expanding visibility for both entities. A second reader is placed at the entry to the sales floor so the supplier can see what is on-hand on the sales floor and in the stock room. This will allow the supplier to see which products sell best than others so that they can be replaced, and it also allows the supplier to institute more exact sales forecasts. A secondary benefit of Rfid is that the promotions that merchandisers spend a lot of money to set up are often left in the stock room for too long or are improperly placed. Now merchandisers and vendors can make sure their promotions are being handled correctly. Suppliers and manufacturers have the potential to save money on yield costs, while making money on customized products.

Consumers should be the greatest winner with Rfid being implemented throughout a company’s supply chain. In the long-run, shop will save money throughout their supply chain, thus bringing down costs to consumers. Consumers should also expect to find more helpful and more informative customers assistance with companies that have Rfid. These companies now have real-time data to share with the customer. A buyer complaint about retail shop has always been that there are too many out-of-stock items; however, with Rfid in place many of these shop should see a important decrease in out-of-stock items. Having Rfid tags on positive products can also make people’s lives much easier, such as a microwave that is a reader and recognizes the tag of the food you put in and will automatically cook it agreeing to the directions on the tag. It also helps environmentally because companies will use resources more efficiently, benefiting everyone. Once Rfid tags are able to be used on food products it will make a recall on a positive item much easier and it could potentially save lives.

Consumers use Rfid everyday and many do not realize the benefits they are receiving from the technology. Contactless cost is a developing technology, the card being used contains a tag and the cost area contains a reader. Mobil and Exxon use a “Speedpass” as their contactless form of cost allowing customers to wave the card in front of a reader to pay for gas or anything in the suitable store. Visa and Mastercard are the two biggest developers of this technology, claiming that it will benefit every person from consumers to businesses. It allows people to have preset money on a card (either debit or credit) which decreases waiting time at check-out stands and increases loyalty to companies that offer this feature. an additional one use of smart cards is keyless entries, which is becoming a favorite trend in America, using just a card and swipe it over the sensor to allow entry. Rfid is a beneficial technology for consumers recovery time and gift conveniences former bar codes, reputation cards and keys cannot offer.

Rfid contains many advantages over former ways of coding pallets, boxes and products. It allows for non-line of sight reading of the tag which shop all the stock information. Rfid reduces human labor costs and human errors straight through the supply chain recovery companies money, as well as reducing theft in the store and warehouses. Rfid can save lives as well if there is a recall and the recalled food item or stock is tagged, then it would be easier to regain all the units.

Ii. Disadvantages

Radio Frequency Identification has been around for over fifty years, but it has been the rapid amelioration and deployment of the technology over the last five years that has raised people’s awareness and insight of the technology. While there are many potential benefits for Rfid, there are many pitfalls as well. Every level that could benefit from Rfid can also reap negative rewards from the technology.

The U.S. military was one of the early adopters of the technology using it for over ten years in a limited area of their operations. In 2003 they upgraded their usage of the technology by demanding that all suppliers must affix a Rfid tag to every pallet, carton and big-ticket item being shipped to the military. The biggest question the military faces is an issue of security. With perfect stock facts on a tag it is easy for an enemy of the United States to pull facts off a tag. This could succeed in loss of life of U.S. Soldiers or even U.S. Civilians if the wrong stock ended up in the wrong hands. The tags could inform enemies of potential weaknesses and strengths of our military and give them a view on how to assault us at our weakest points.

Large companies like Wal-Mart and Target who use Rfid face many potential problems with the technology. Rfid has no proven infrastructure making it difficult for suppliers to keep up with these company’s demands to come to be Rfid-ready. If the suppliers cannot effectively implement Rfid into their business, then retailers cannot fully view their supply chain. If retailers cannot get all their facts in real time across their entire supply chain, then the issues they are trying to solve will remain problems. Out-of-stock items, first-in-first-out products and last-in-last out products will still cause problems for these large retailers.

Epcglobal is a start to an international standards body for Rfid. It has yet to be beloved by the International club for Standardization (Iso) and there is still not a global frequency standard. While 900 Mhz appears to be the best frequency due to its long read-range capability, 13.56 Mhz is still used delaying the standardization of global frequency for Rfid. High costs of Rfid implementation is the speculate many mid-size and smaller retailers have not adopted the technology. The short-term outlook for companies who use Rfid isn’t impressive, although long-term benefits will be realized.

Privacy issues are the estimate one pitfall for Rfid and retailers. As long as the tags are only affixed to pallets and cartons then the retailers would not have any definite facts on the consumer. However, when Rfid tag prices fall, companies like Wal-Mart and Target plan on using Rfid tags on individual products which they can trace consumer’s buying habits and other facts consumer’s wish to keep private. It was privacy issues that force Benetton to cease their pilot Rfid system. They wanted to embed a tag in articles of clothing to stop theft, rule buyer buying habits and keep their account at an approved level. Privacy advocate groups such as the Consumers Against Supermarket Privacy Invasion (Caspian) fight companies using Rfid to track buyer behavior. A study showed that up to 78% of America was against Rfid based solely on privacy issues. It will be difficult for companies in the time to come to tag individual items without a collective outcry without some form of security for the public’s privacy rights.

Consumers have the largest disadvantage of any other entities complicated with Rfid technology. There are five privacy issues that consumers must try to protect themselves from: secret placement of tags, unique identifiers for objects worldwide, massive data aggregation, secret readers, and individual tracking and profiling. secret placement of tags by companies is an easy way to get facts from consumers. The buyer will feel safe buying a stock with no knowledge of an Rfid tag embedded in their clothing. These tags theoretically could track a someone around the world if there were readers in definite locations throughout the world. Personal facts may also be embedded in these tags giving facts as detailed as your healing history. Prada and Swatch use embedded tags in their clothing, and Benetton did as well, but a boycott of Benetton was successful and they removed their tags. There is no law against companies embedding tags, and only California and Utah have made lawful requests to turn the situation.

Companies who use Rfid can compile massive amounts of data on consumers, along with stock likes or dislikes, buying power or even prescription history. Rfid makes it easy to amass this data and to prescription correlations. If a corporation owns many shop they can couple data between companies and originate new data on buying habits.

Hidden readers violate people’s privacy much the same way secret tags do. Gillette and Accenture are introducing “silent commerce” which embeds tags on people’s products and readers in strategic locations without the consumer’s knowledge. These companies have experimented with different reader locations ranging from secret rug locations to shelve locations and even secret in floor tiles. Readers could even be installed in doorways on street lights, in any place that people have to pass through, and at once all facts embedded in the tag is broadcast to the reader. If this were to happen privacy would be impossible because you would never know if the products you have comprise tags, and you never know when you are within presence to a reader.

The disadvantages of Rfid hinge mainly on privacy concerns, technological imperfections, cost of the technology and no proven way to set up an Rfid system for a company. The government and corporations are the two groups that offer the most concern for privacy issues. secret tags and readers threaten to take away human mystery, gift a world where people see, feel and hear only what the government and large corporation want people to.

Iii. time to come of Rfid

The time to come of Rfid is uncertain, however, the technology is here to stay. companies have many obstacles to overcome to make the technology a feasible choice to be implemented. Privacy issues and will persist, although cost for Rfid systems will decrease. In order for Rfid to be successful, companies must work with privacy advocate groups to institute a fair way to implement Rfid without alienating their customers.

Technology will continue to institute for Rfid and many new applications will be realized. Automation will be a side-effect of Rfid development, in the supply chain and in everyday activities. Contactless cost methods are already available, as well as automated keycards to open doors. Rfid tags installed in cars with readers on the roads and freeways will alert the authority if you are breaking the law. Supermarkets will at last be able to realize their shopping cart checkout system once prices fall to a more affordable price. Fresh foods, metals and liquids will all be Rfid compatible in the near future. If privacy issues are not watched closely, people will come to be tagged and there will always be someone watching and analyzing every person’s decisions.

Pros and Cons of Rfid Technology

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