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1.0 Introduction

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

solution.

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

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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

RFID.

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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

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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: http://web.media.mit.edu/~fletcher/tags/, 1998)

2.2 Sensors

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

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the same methods as mentioned above, and transfers then sends the information to

terminals that route the information to the server. (5:1606)

2.3 Server

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

sensors. (3:90)

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

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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

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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

difference. (2:35)

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

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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

Officer:

[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)

4.0 Cost

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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-

time cost.

5.0 Conclusion

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

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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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References

1. Bak, David. “Paper Transponder Cuts RFID Costs.” Global Design News, Vol. 5, No. 4, Sept 2001, p. 24.

2. Garfinkel, Simson. “An RFID Bill of Rights.” Technology Review, Vol. 105, No. 8, Oct 2002, p. 35.

3. Halliday, Steve. “The Business Case for RFID.” Modern Materials Handling, Vol. 56, No. 2, Feb 2001, p. 90.

4. Johnson, Dick. “RFID Tags Improve Tracking, Quality on Ford Line in Mexico.” Control Engineering, Vol. 49, Issue 11, Nov 2002, p. 16.

5. Karthaus, Udo, Martin Fischer. “Fully Integrated Passive UHF RFID Transponder with 16.7-µW Minimun RF Input Power.” IEEE Journal of Solid/State Circuits, Vol. 38, No. 10, Oct 2003, p. 1602-8.

6. Ruff. Todd M., Drew Hession-Kunz. “Application of Radio-Frequency Identification Systems to Collision Avoidance in Metal/Nonmetal Mines.” IEEE Transaction on Idustry Applications, Vol. 37, No. 1, Jan/Feb 2001, pp. 112-6.

7. Takaragi, Kazuo, et al. “An Ultra Small Individual Recognition Security Chip.” IEEE Micro, Vol. 21, No. 6, Nov/Dec 2001, pp. 43-9.

8. “Sun Fire B1600 Blade Platorm.” Internet: http://www.sun.com/products/blades/, 2004.

9. “Talking RFID with Walmart’s CIO.” Internet: http://www.businessweek.com/technology/content/feb2004/tc2004024_3168_tc165.htm, February 4, 2004.

10. “Toppan to Poduce $20 RFID Reader.” Internet: http://www.rfidjournal.com/article/articleview/279/1/1, January 23, 2003