Keeping pace with RFID

Ashish
Siva
David T
Erik

Grenoble Graduate School of Business MIB21A

RFID Technology
What is RFID ?
Radio Frequency Identification
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

Integrated chip

RFID Reader Antena and

transceiver(reader)
Host Computer
Major players: IBM, Texas Instruments

RFID Basics
How it works ?
Antenna

Active

Passive

Decades of RFID
Decade

Event

1940 - 1950

Radar refined and used, major World War II

development effort.
RFID invented in 1948.

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 2006

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

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

RFID in Retail Supply Chain

Retail Supply chain process

Supplier

Manufacturing

Retailer/

Retailer store

Distributor/
Distribution

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

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

Effect on consumers
Other RFID uses with implants
67 hospitals using RFID human implant
Night club admission

Effect on consumers
Consumer awareness low
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

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