radio frequency identification

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1 R F I D RADIO FREQUENCY IDENTIFICATION Presented by: Allison Tippett Charlotte Claeys Donald Sengur Teresa Fong Tolu Gamu

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F. I. D. R. RADIO FREQUENCY IDENTIFICATION. Presented by: Allison Tippett Charlotte Claeys Donald Sengur Teresa Fong Tolu Gamu. F. I. D. R. WHAT YOU WILL LEARN AFTER THIS CLASS:. 1) WHY IS RFID IMPORTANT?. 2) WHAT IS RFID?. 3) BUSINESS APPLICATIONS. 4) POTENTIAL CHALLENGES TO MANAGE. - PowerPoint PPT Presentation

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RADIO FREQUENCY IDENTIFICATION

Presented by:Allison TippettCharlotte ClaeysDonald SengurTeresa FongTolu Gamu

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WHAT YOU WILL LEARN AFTER THIS CLASS:

1) WHY IS RFID IMPORTANT?

2) WHAT IS RFID?

3) BUSINESS APPLICATIONS

4) POTENTIAL CHALLENGES TO MANAGE

5) MANAGERIAL IMPLICATION

6) THE FUTURE OF RFID

Tu

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WHY IS RFID IMPORTANT?

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• RFID is a rapidly evolving technology that can dramatically improve operational efficiencies and customer service;

• RFID will fundamentally transform the way information about products, equipment, animals and even people is gathered and analyzed in real time, providing new business opportunities across all industries.

PROMISED BUSINESS BENEFITS

Tu

Alan D. Smith (2005),“Exploring radio frequency identification technology and its impact on business systems,” Information Management & Computer Security, Vol. 13, No. 1

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TOP 10 LEADING COUNTRIES ADOPTING RFID BY NUMBER OF PROJECTS IN 2006

http://www.idtechex.com/research/articles/review_of_rfid_in_2007_00000799.asp, viewed October 24 2008

Te

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Anonymous (2008),“RFID Market Projections 2008 to 2018,” IDTechEx

SIZE OF MARKET - APPLICATION

Te

Tag Location Number of tags suppliedin 2007 (millions)

Air Baggage 45Animals 80Archiving (documents/ samples) 8.01Books 60Car clickers 47Cold retail supply chain 0.004Consumer goods 7Conveyances/ Other, Freight 25.3Drugs 18Manufacturing parts, tools 40.03Military 25Other Healthcare 12People (excluding other sectors) 0.8Pharma/ Healthcare 0.3Postal 1.2Retail apparel 95Retail CPG pallet/ case 225Shelf edge labels 0.1Smart cards/ payment key fobs 630Smart tickets/ banknotes/ secure fobs 250Tires 0.1Vehicles 5.8Other 120.01Total 1740.65

Number of tags sold by application in 2007

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Market Tag Value($million)

Highlights

Airline and Airports 25.9 Excludes passports, cards

Animals and Farming 90.0 Animals

Books, Libraries, Archiving 27.4 Retail books, documents

Financial, Security, Safety 1126.4 Access control, passports

Healthcare and Pharmaceutical 37.7 Drugs, people, assets

Land and Sea Logistics, Postal 38.9 Conveyances, vehicles, postal

Manufacturing 24.0 Assets, tools, etc

Military 86.5 Pallets, assets, items, etc

Passenger Transport, Automotive 650.7 Card, ticket, clicker, tire

Retail, Consumer Goods 86.5 Pallet, case, apparel, cpg

Other 162.6 Research, eduction, etc

Total 2356.6

RFID Tag Revenue Forecast by Market, 2008

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SIZE OF MARKET - REVENUE

Anonymous (2008), “RFID Market Projections 2008 to 2018,” IDTechEx

Te

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FORECAST OF GLOBAL SALES OF RFID TAGS

Te

Anonymous (2008), “RFID Market Projections 2008 to 2018,” IDTechEx

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TECHNOLOGY

Tu

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WHAT IS RFID?

• Radio Frequency Identification describes technologies that use radio waves to mechanically recognize people or objects.

http://en.wikipedia.org/wiki/RFID, viewed October 24, 2008

Tu

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HISTORY OF RFID

• “RFID was founded in 1946, by the Soviet Union, which retransmitted incident radio waves with audio information;”

• “The device was a passive listening device not an identification tag as it has been attributed as a predecessor to RFID technology.”

http://en.wikipedia.org/wiki/RFID, viewed October 24, 2008

Tu

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• Mario Cardullo is the father of RFID;

• He was the corporate planning officer to the chairman of the Communications Satellite Corporation (Comsat);

• After leaving Comsat, he put together a business proposal to develop the EKG terminal and his new idea, the RFID tag. Many people were interested in his ideas and gave him the necessary funds. With these funds he started the company ComServ;

• Mario Cardullo received the first patent for a read-write RFID tag a passive radio transponder with memory.

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FOUNDER OF RFID

,http://en.wikipedia.org/wiki/RFID, viewed October 24, 2008

Tu

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TIMELINE OF RFID

Directly quoted, http://ieeexplore.ieee.org/iel5/45/33027/01549751.pdf, viewed October 24 2008

1940 –1950 Radar refined and used, major World War II development effort.

1950 –1960 Early explorations of RFID technology, laboratory experiments.

1960 –1970 Development of the theory of RFID. Start of applications field trials.

1970 –1980 Explosion of RFID development. Tests of RFID accelerate. Very early adopter implementations of RFID.

1980 –1990 Commercial applications of RFID enter mainstream.

1990 –2000 Emergence of standards. RFID widely deployed. RFID becomes a part of everyday life.

2000 – now RFID explosion continues

Tu

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RFID VS BARCODE

A

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PARTS OF RFID TECHNOLOGY

TagsReaders/Writers Softwares Antennas

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PARTS OF RFID TECHNOLOGY

RFID tags: • Passive:

– requires no interior power source;

– only active when a reader is nearby to power them;

• Active, or semi-passive (also known as battery-assisted):– requires power source, usually a small battery;

• RFID can hold up to 10Kbits of data.

,http://en.wikipedia.org/wiki/RFID, viewed October 24, 2008

D

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PARTS OF RFID TECHNOLOGY

,http://en.wikipedia.org/wiki/RFID, viewed October 24, 2008

Reader: • Read all the tags within reach in sequence;• Active tags send signals to readers;• Readers send signal to passive tags and read the

data broadcast by the tags;Writer:• A reader/writer could read and write information

on reusable tags.

D

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PARTS OF RFID TECHNOLOGY

Antennas:• Placed on the tags;• To emit and receive the signals from the readers.

,http://en.wikipedia.org/wiki/RFID, viewed October 24, 2008

D

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HOW PARTS WORK TOGETHER

WMS: Warehouse Management SystemOMS: Order Management SystemTMS: Transportation Management SystemSCM: Supply Chain ManagementCRM: Customer Relationship ManagementSRM: Supplier Relationship Management

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HOW PARTS WORK TOGETHER

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BUSINESSAPPLICATION- CASE STUDY:

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• April 30, 2004 – pilot testing;– 8 manufacturing participants;– 28 volunteers;

• January 2005 – Mandate: top 100 suppliers.

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RFID IMPLEMENTATION HISTORY

Anonymous (2004), “Wal-Mart’s January Deadline,” Greenhouse Grower, Vol. 22, No. 10, pg. 34;John S. McClenahen (2005), “Wal-Mart’s Big Gamble,” Industry Week/IW,Vol. 254, No. 4, pp. 42-49.

A

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• June 2005: – another 200 suppliers joined the effort;

• End of 2006:– All domestic suppliers participated;

• 2006:– Expected international roll out.

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RFID EXPANSION

Carol Sliwa (2004), “Wal-Mart Revises ‘05 RFID Expectations,” Computerworld, Vol. 38, No. 21, pg. 14

A

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• Will not disclose any information on how much money is being saved using RFID;

• According to an estimate published in Fortune Magazine, Wal-Mart will receive a return of 21.5% on capital with the use of RFID.

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WAL-MART’S ROI

Christine Y. Chen (2004), “Wal-Mart Drives a New Tech Boom,” Fortune, Vol. 149, No. 13, pg. 202

A

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• Short-term– the cost of RFID overshadows any trickle-

down effect received through increased sales;

• Long-term– increased visibility of the supply chain will

help suppliers better production scheduling and inventory management.

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SUPPLIERS’ ROI

John S. McClenahen (2005), “Wal-Mart’s Big Gamble,” Industry Week/IW, Vol. 254, No. 4, pp. 42-49;David Blanchard (2008), “Wal-Mart Lays Down the law on RFID,” Industry Week/IW, Vol. 257, No. 5, pp. 72-74.

A

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• Do not want to lose Wal-Mart as a distributor because of it’s size, power, and reach.

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SUPPLIERS’ INCENTIVE

John S. McClenahen (2005), “Wal-Mart’s Big Gamble,” Industry Week/IW, Vol. 254, No. 4, pp. 42-49

A

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• Wal-Mart sponsored research at the University of Arkansas;

• Purpose: to validate the usefulness and effectiveness of RFID technology.

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RFID RESEARCH

David Blanchard (2008), “Wal-Mart Lays Down the law on RFID,” Industry Week/IW, Vol. 257, No. 5, pp. 72-74

Te

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• “Analysis at the university’s RFID Research Center indicates in test scores that an automated RFID-enabled inventory system improves accuracy by 13%;”

• This finding is important because inventory inaccuracy can lead to a 10% loss of profit;

• With reports of inventory inaccuracy being as high as 65%, the 13% improvement rate demonstrates how RFID can significantly improve this problem.

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RESEARCH ANALYSIS

Directly Sourced: David Blanchard (2008), “Wal-Mart Lays Down the law on RFID,” Industry Week/IW, Vol. 257, No. 5, pp. 72-74

Te

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• Cost;

• Standards;

• Technology infrastructure.

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KEY ISSUES FOR SUPPLIERS

A

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• Wal-Mart pushes the cost of RFID onto its suppliers;

• AMR Research estimated that the Wal-Mart suppliers as a whole have spent over $250 million on RFID technology and implementation;

• Factors affecting cost are the number of tags needed, complexity of tags, types of products, and the distribution environment.

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KEY ISSUES - COST

John S. McClenahen (2005), “Wal-Mart’s Big Gamble,” Industry Week/IW, Vol. 254, No. 4, pp. 42-49

A

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Cost of Implementation:

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KEY ISSUES - COST

Tags and Readers $5 million to $10 Million

System Integration $3 million to $5 million

Changes to existing supply-chain application

$3 million to $5 million

Data storage and analytics $2 million to $5 million

Total $13 million to $23 million

Directly Sourced: John S. McClenahen (2005), “Wal-Mart’s Big Gamble,” Industry Week/IW, Vol. 254, No. 4, pp. 42-49

A

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• There are several RFID tag classes and there has not been an official standard which complicates the application and use of RFID.

http://knowledge.wharton.upenn.edu/article.cfm?articleid=1005, viewed October 8, 2008

KEY ISSUES - STANDARD

A

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• Suppliers are realizing that the information being collected through RFID cannot be stored or used properly with existing databases;

• Updates are needed to filter information especially in areas of business intelligence tools, data mining, & the use of standard data definitions across the corporation;

• The biggest obstacle of making RFID work is the managing of information.

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KEY ISSUES - TECHNOLOGY INFRASTRUCTURE

http://knowledge.wharton.upenn.edu/article.cfm?articleid=1005, viewed October 8, 2008

A

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“A case of product leaves the manufacturer and is tracked and instantly routed when it reaches a Wal-Mart distribution center. There’s no need to rip open a case and inspect the contents because the RFID reader has already identified the item. At the store, the goods are monitored in real-time so there’s no need for inventory. When the shelves are empty, RFID readers alert workers to restock shelves. If Wal-Mart’s inventory is depleted, a replenishment message is automatically sent to the supplier.”

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SCENARIO OF RFID IMPLEMENTATION

http://knowledge.wharton.upenn.edu/article.cfm?articleid=1005, viewed October 8, 2008

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• Many companies are worried about being left behind;

• Target, Albertson’s, and Walgreens have all started pilot programs and implementation.

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INDUSTRY IMPACT

Christine Y. Chen (2004), “Wal-Mart Drives a New Tech Boom,” Fortune, Vol. 149, No. 13, pg. 202

C

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OTHER BUSINESS APPLICATIONS

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• Largest RFID by far and business is booming;

• Over 800 millions tags sold in 2007;

• Identification cards that do not need to make contact with the reader to be read, or swiped in a special slot;

• Applications: building access, biometrics, parking, cashless vending/payment, time and attendance, loyalty programs, etc;

• Available in: plastic cards, key fobs, watches, documents, mobile phones.

CONTACTLESS SMART CARDS

David C. Wyld (2006), “RFID 101: the next big thing for management,” Management Research News, Vol. 29, No. 4;Anonymous (2008), “Strong growth of RFID smart cards/ payment key fob,” IDTechEx.

Te

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MasterCard Paypass• “Tap n’ Go;”

• As of Nov 2007, over 20 million MasterCard PayPass cards and devices issued globally;

• Approximately 80,000 merchant locations around the world: McDonald's, 7-Eleven, CVS, Duane Reade, Sheetz and Regal Entertainment Group.

CONTACTLESS SMART PAYMENT

Anonymous (2007), “MasterCard Says 20 Million PayPass Contactless Cards Issued,” Contactless Payment Systems, Dec 10;http://www.mastercard.com/us/personal/en/aboutourcards/paypass/, viewed October 24, 2008.

Te

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McDonald’s & SK Telecom• Shinchon branch near Yonsei University,

Western Seoul, Korea;• First world “Touch Order” menu at a

restaurant;• How it works:

– Customer downloads “Order” program to their mobile phones;

– RFID reader and menu at each table; – Customer plug the reader into their mobile

phones and point at food items;– Bill is charged through the mobile phone;– When meal is ready, short message is sent to

the phone so customer can pick up at the designated counter.

CONTACTLESS SMART PHONE

Gautam (2007), “Avoid long queues for ordering your favorite burger with RFID,” Contactless Payment Systems, Sep 12

Te

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2008 Beijing Olympics Games

• Prevent counterfeiting:– Ticket: Embedded 13.56-MHz

chip stores a unique serial number to ensure authenticity;

– RFID readers that control doors and cameras throughout the facilities.

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CONTACTLESS SMART TICKET

Laurie Sullivan (2006), “Olympics technology: RFID’s the ticket for secure games,” EE Times, Aug 4

Te

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SUPPLY CHAIN MANAGEMENT

A

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U.S. Department of Defense:• Mandate RFID for the military’s worldwide supply chain;

• Applied to cases, pallets, packages of supplies;

• Anything from uniforms to motor oil.

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SUPPLY CHAIN MANAGEMENT

Elizabeth Wasserman (2007), “RFID Takes Root in Washington,” RFID Journal, May/June;Anonymous (2003), “Military Edict: Use RFID by 2005,” RFID Journal, Oct 3.

A

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Shipping:• Combined with environmental sensors to monitor

temperature, light, humidity, shock, positioning, etc.

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SUPPLY CHAIN MANAGEMENT

A

David C. Wyld (2006), “RFID 101: the next big thing for management,” Management Research News, Vol. 29, No. 4;http://www.freshpatents.com/Container-security-seal-with-destructible-rfid-tag-dt20080522ptan20080117058.php, viewed October 28, 2008

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RETAIL

Anonymous (2008), “Real-World RFID in Retail: ‘Custom-Tailored’ Solutions Deliver Benefits to Apparel Retailers,” Aberdeen Group Systems

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• Nokia Retail Store, Arraya Center, Kuwait– http://www.youtube.com/watch?v=LZylfbdu_1k

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RETAIL

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• Asset Tracking:– Instantly determine the general location of

tagged assets;

• Auto ID:– Identify items and gather data on objects,

humans, or animals without human intervention of data entry.

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ASSET TRACKING & AUTO ID

Te

David C. Wyld (2006), “RFID 101: the next big thing for management,” Management Research News, Vol. 29, No. 4

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• Auto ID:– Animals, Food, & Farming

• Livestock disease control;

• Improve traceability;

• Condition monitoring;

• Crime reduction.

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ASSET TRACKING & AUTO ID

Te

Elizabeth Wasserman (2007), “RFID Takes Root in Washington,” RFID Journal, May/June;http://www.electrocom.com.au/rfid_animalid.htm, viewed October 28, 2008

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• Auto ID:– Identification and

Access control• Employee ID badges;

• E-passports.

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ASSET TRACKING & AUTO ID

Te

Elizabeth Wasserman (2007), “RFID Takes Root in Washington,” RFID Journal, May/June

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• In 2006, the healthcare industry spent $90 million on RFID. It is expected that cost of RFID will increase to $2.1 billion by the year 2016.

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HEALTH CARE

http://www.rfidhealthcare.com, viewed October 24, 2008

Tu

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Asset Management: • Locate movable assets.

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HEALTH CARE

http://www.rfidhealthcare.com, viewed October 24, 2008

Tu

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Patient Care

• Track and identify a patient correctly.

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HEALTH CARE

http://www.rfidhealthcare.com, viewed October 24, 2008

Tu

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Inventory Management• Identify inventory & prevent

out of stock;

• Fight counterfeit and theft

– CVS: one of nine participating

in a pilot designed to establish

an RFID operating and

adoption model for the drug

industry in 2004.

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HEALTH CARE

Tu

Elena Malykhina (2004), “RFID Tests Are Positive For CVS And Pharmaceuticals,” Information Week, September 30;http://www.rfidhealthcare.com, viewed October 24, 2008.

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RFID SUPPLIERS

Tu

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POTENTIAL CHALLENGES TO MANAGE

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CONTROVERSIES• High RFID Costs;• No global standard;• Technological immaturity;• Lack of robustness;• Information management;• Privacy concerns;

– Video: http://www.youtube.com/watch?v=FVmD4iTXRLE

• Ethical problems;• Terrorism, blue jacked.

C

Daniel V. Hunt, Albert Puglia, & Mike Puglia, (2007), “RFID: A Guide to Radio Frequency Identification,” Wiley;Simson Garfinkel, & Beth Rosenberg (2006), “RFID: Applications, Security, and Privacy”, Addison-Wesley.

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MANAGERIAL IMPLICATION

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ADOPTION ANALYSIS  Perception Strategic Level Operational Level Implementation

Business Relationship Yes N/A N/A N/A

Convenience Yes N/A N/A N/A

Security Purpose Yes N/A N/A N/A

Benefits N/A Yes N/A N/A

Cost N/A Yes N/A N/A

Partner's Pressure N/A Yes N/A N/A

Number of Partners N/A Yes N/A N/A

Top Management Support N/A N/A Yes N/A

Errors N/A N/A Yes N/A

Standards N/A N/A Yes N/A

IT Application Deployment N/A N/A Yes N/A

Company Slack N/A N/A Yes N/A

Complexity N/A N/A Yes N/A

Data Synchronization N/A N/A Yes N/A

Industrial Sectors N/A N/A Yes N/A

Business Intelligence N/A N/A N/A Yes

Reading Accuracy/Algorithm N/A N/A N/A YesD

Source 1-21

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COST/BENEFIT/RETURN ANALYSIS

• Suggested correlation of expected return:– Expected Return = c0(+) + c1(+)*Mandate + c2(-)

*Standard_Ambiguity + c3(+)*IT_Integration + c4(+)*Spending + c5(ns)*Firm_Size + c6(-)*Manufacturing + c7(-)*Trade_n_Logistics

D

Source 1-21

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IMPACTS ON BUSINESS ACTIVITIES

  Impacts

Service Level (+)

Business Orders (+)

Production Policies (+)

Total Cost of Supply Chain (+)

Inventory Level (-)

Stock-Out Percentage (-)

Cost-of-Inventory Errors (-)

D

Source 1-21

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RFID: THE FUTURE

C

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THE FUTURE OF RFID

• A Future Supermarket – Video: http://www.youtube.com/watch?v=eob532iEpqk

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POTENTIAL USES

• Item-level Tags;

• Replacing barcodes;

• Combination with others technologies;

• Future improvement of RFID;

• Future benefits of RFID.

CDaniel V. Hunt, Albert Puglia, & Mike Puglia, (2007), “RFID: A Guide to Radio Frequency Identification,” Wiley;http://www.wordquests.info/RFID.html, viewed October 21, 2008;http://www.smso.net/RFID#History, viewed October 21, 2008

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ITEM-LEVEL TAGS

Commercial use:• Wal-Mart: tags on each pallets and cases;• Variety of companies engaged in item-level

tagging: American Apparel;• Today: Reserved to luxury goods;• Tomorrow: any goods;• Examples: Italian manufacturer, Japanese

students.

C

Daniel V. Hunt, Albert Puglia, & Mike Puglia, (2007), “RFID: A Guide to Radio Frequency Identification,” Wiley;Simson Garfinkel, & Beth Rosenberg (2006), “RFID: Applications, Security, and Privacy”, Addison-Wesley.

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COMBINING W/OTHER TECHNOLOGY

TeDaniel V. Hunt, Albert Puglia, & Mike Puglia, (2007), “RFID: A Guide to Radio Frequency Identification,” Wiley;http://www.wordquests.info/tech-advances.html, viewed November 02, 2008

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EXAMPLES

• Find your keys at home;

• Find your car;

• Human implant;

• Your fridge keeps track of its contents.

C

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FUTURE IMPROVEMENT OF RFID

• Process Optimization;• Decrease in cost;• Decrease in size;• Better Memory, better power;• Technological developments:

– Real-time information of business process;– Improve business performance;– Improve privacy and security.

C

Daniel V. Hunt, Albert Puglia, & Mike Puglia, (2007), “RFID: A Guide to Radio Frequency Identification,” Wiley;Simson Garfinkel, & Beth Rosenberg (2006), “RFID: Applications, Security, and Privacy”, Addison-Wesley.

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References:1. Zaheeruddin Asif, Munir Mandviwalia (2005), “Integrating the Supply Chain with RFID: A Technical and

Business Analysis,” Communication of the Association for Information Systems, Vol. 15, Article 24, March;

2. Yu-Ju Tu & Selwyn Piramuthu (2008), “Reducing False Reads in RFID-Embedded Supply Chains,” Journal of Theoretical and Applied Electronic Commerce Research, Vol. 3, Issue 2, pp. 60-70;

3. S.K. Hargrove Sr, R. Queen Jr, B. Olubando & A. LaRochelle, “Developing a Low Cost RFID (Radio Frequency Identifiers) Middleware for Small Business Applications,” Department of Industrial, Manufacturing and information Engineering, Clarence M. Mitchell, Jr. School of Engineering, Morgan State University, Baltimore, USA;

4. Mark Vandenbosch & Niraj Dawar (2002), “Beyond Better Products: Capturing Value in Customer Interactions”, MIT Sloan Management Review;

5. Hau Lee & Ozalp Ozer (2007), “Unlocking the Value of RFID,” Production and Operation Management, Vol. 16, No.1, Jan-Feb;

6. Jonathan Whitaker, Sunil Mithas & M.S. Krishnan (2007), “A Field Study of RFID Deployment and Return Expectations,” Production and Operation Management, Vol. 16, No.5, Sep-Oct;

7. Henning Baars, Hans-Georg Kemper, Heiner Lasi & Marc Siegel (2008), “Combining RFID Technology and Business Intelligence for Supply Chain Optimization – Scenarios for Retail Logistics,” Proceedings of the 41st Hawaii International Conference in System Sciences;

8. Claudia Loebbecke & Claudio Heyskens (2006), “Weaving the RFID Yarn in the Fashion Industry: The Kaufhof Case,” MIS Quarterly Executive, Vol. 5 No. 4, Dec;

9. David H. Nguyen, Alfred Kobsa & Gillian Hayes (2008), “An Empirical Investigation of Concerns of Everyday Tracking and Recording Technologies,” ACM;

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References:10. Aditva Sharma, Alex Citurs & Benn Konsynski (2007), “Strategic and Institutional Perspective in the Adoption

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13. Michael A. Jones, David C. Wyld & Jeff W. Totten, “The Adoption of RFID Technology in the Retail Supply Chain,” The Coastal Business Journal, Vol. 4, No. 1;

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18. Christine Perakslis, Christine & Robert Wolk (2005), “Social Acceptance of RFID as a Biometric Security Method,” IEEE;

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20. http://www.rfidjournal.com;21. H Jung, F.F. Chen & B. Jeong (2007), “Trends in Supply Chain Design and Management -Technologies and

Methodologies,” ISBN: 978-1-84628-606-3.

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