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RFID Report Final

RFID Report Final

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04/21/2015

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Sections

  • 1.1 Problem definition
  • 1.2 Research Purpose
  • 1.3 Research Questions
  • 1.4 Limitations
  • 1.5 Outline of the thesis
  • 2.1 RFID-The technology
  • 2.2 Warehouse Management System
  • 2.3 Supply Chain Management
  • 2.4 How RFID Works
  • 2.5 RFID Components
  • 2.6 Tags
  • 2.7.1 Frequencies - High Frequency
  • 2.7.2 Frequencies - Ultrahigh Frequency (UHF)
  • 2.7.3 Frequencies - Microwave
  • 2.8 Read/Write Capabilities
  • 2.9 Range and Sensitivity
  • 2.10.1 Low-end systems
  • 2.10.2 Mid-range systems
  • 2.10.3 High-end systems
  • 2.11 Memory Capacity and Functionality
  • 2.12 Standards
  • 2.13.1 RFID in the Distribution Center
  • 2.13.2 Item-level tracking
  • 2.13.3 Application Planning Considerations
  • 2.13.4 Shipping
  • 3.1.1 Interviews
  • 3.1.2 Observation
  • 3.2 Secondary Data
  • 4. Conclusion
  • 5. Necessary future improvements
  • 6.Reference/Bibliography

An impact of RFID Technology in Warehouse and Supply Chain Management

1. Introduction
The purpose with this section is to present the problem area. Intially,an introduction and a background is provided in order to motivate the importance of the subject. Next, the problem definition is included, which will result in a formulation of the research problem.

In most parts of the world pharma organizations are driven by daily operations throughtout the industry, most of the times with relying on the base of their expereinces they face with a lot of problems such as increasing costs, decreasing revenues, and dissatisfy customers while customer satisfaction is the main job.

Customer relationship with requiring

to customer-centric bussiness

philosophy and cultural to support effective marketing, sale, making long term relationship and services process could be a life saver for most bussiness especially for pharmasuetical distribution

organizations.

Technology implementation can bring a lot of benefits such as customer satisfaction, increaseing revenues, decreasing in cost that all

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An impact of RFID Technology in Warehouse and Supply Chain Management

these benefits for a firm can be a source of sustainable competitive advantage.

1.1 Problem definition
In today word pharma has exapanded to such extent that it is now claimed to be one of the wold’s largest industry, with high rate of employee, and bringing a lot of revenue for countries. On the other hand the increased online proce/products transperency and the new ebussiness models (e.g online auctions) enhances customer’s

purchasing power.

More recently, the continuous movement towards globalization has made information process one of the most important factors in achieving success as well as in seeking new markets,improving quality and providing better and faster customer service.

Service at the organizational level is affected by the level of competition, which leads other organization to step up the

development of their service. Increaed level of service, however does not imply increase profitability. Competitions may results in lower prices, thus eriding improvements in margins.

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An impact of RFID Technology in Warehouse and Supply Chain Management

1.2 Research Purpose
Nowadays, there are strong competitions among corporations which serve the communication services. Therefore they not employ

information technologies through the organizational levels to improve the performance quality but also use the newest technologies to cover customer needs. Rapid process of information and employing

automation system through the organizational levels in recent years cause firms to access to the update information and knowledge easily and quickly.

Base on the title and subject of the research: An impact of RFID technology in warehouse and supply chain management, main objecives are as follows:

To understand the impact of RFID on warehouse and supply chain.

To get the knowledge about how firms deal with the inventory from cost effective view. In a broader point of view, it is a cost reduction procedure that can have an impact on the economies of the company directly and on other departments indirectly

Document and analyze the information from handling flow of goods.

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1. -4- . Suggesting useful and practical solution that could be used in the organization. How pharmaceutical distributors can implement an effective RFID technology? 2.An impact of RFID Technology in Warehouse and Supply Chain Management • Propose improvements to the processes in order to achieve improved delivery accuracy. What is the influence of implementing of RFID technology on customer satisfaction.4 Limitations • The research will only focus on small organization with less than 10 actors. This is because big organization and small organization may differ a lot for each other structurally and culturally. • Forecasting the result of applying RFID technology on increasing revenue and decreasing cost.3 Research Questions To reach above purposes the following research questions emerges: 1. • • Determining the effect of implementation of RFID technology. • Determining the effect of customer needs and meet their needs via giving more and more servicing using technology. 1. loyalty and retention.

The environment of the organization is not on focus. expectations This and will prerequisite also find of the a successful RFID implementation. relationship between implementing RFID and customer service.An impact of RFID Technology in Warehouse and Supply Chain Management • The main focus in this research is to study how the RFID technology improves the manual process of the organization.5 Outline of the thesis Present thesis tries to find and analyze the pharmaceutical distributor’s needs. 1. -5- . loyalty and retention. The study will be done in one case site only. The theoretical findings are compare and adapt to the firm’s specific needs with giving practical and useful solutions for giving more and more services.

• A bar code cannot physically survive processes. in real time. • Highly automated and need to minimize human intervention. -6- . Literature Review You've probably heard the acronym "RFID. • Obtain benefit by knowing where products are at all times in the supply chain. • Need more unique information on each item than a bar code can contain.An impact of RFID Technology in Warehouse and Supply Chain Management 2. • Areas of facilities need to be protected from unauthorized access." which stands for radio frequency identification. To help decide if RFID would be beneficial. and can share that information wirelessly with computer databases and networks so items can be tracked efficiently. What you may not know is how far the technology has come and what is being developed right now that could help your warehouse or distribution center. You may know that RFID tags can contain unique information that identifies whatever they are attached to. • Deal in high-value assets that need to be protected. consider if any of the following statements apply to your business: • Processing speed is essential or could provide a competitive advantage.

which means it has a battery to power its own transmission.An impact of RFID Technology in Warehouse and Supply Chain Management If any of these statements apply to business. or passive. Passive -7- . Tags consist of a wireless chip and antenna that are housed in a label or other protective casing and attached to the item that is to be identified. Active tags have longer read ranges making them appropriate for asset management and real-time location systems (RTLS). The tag may be active. RFID should be given serious consideration in system design RFID uses radio signals to exchange data between a tag (also known as a transponder) and a read/write device (commonly called a reader or interrogator). which transmits using power received from the reader in the form of electromagnetic waves.

industrial solvents. Chips and antenna can also be encased in more rugged tags to provide permanent asset and location identification or withstand exposure to high temperatures. which is printed with text and bar code to support legacy operations. A typical smart label has an RFID tag encoded within the label material. impact.An impact of RFID Technology in Warehouse and Supply Chain Management tags have a shorter read range and are smaller and less expensive than active tags making them the tag of choice for most supply chain applications. The most common tag type used in warehouse and operations are passive adhesive “smart labels” applied to cases and pallets. and other conditions that make bar code or other forms of data collection impossible. -8- .

a processor for decoding tag information. There are many types of RFID readers. The memory on these tags can be read and written to remotely and at very high speed. and fixed-position units.” as they are also known— operate as portable databases that can be accessed wirelessly. Tags—or “electronic labels. The most common include mobile readers integrated into handheld computers or mounted on vehicles. which are typically mounted at dock doors and conveyor lines.An impact of RFID Technology in Warehouse and Supply Chain Management Readers have antennas for sending and receiving signals. RFID systems use radio waves as the communication medium between RFID tagged objects and RFID reader stations. -9- . Antennas may be separate from the processor and connected by cable for additional placement and configuration flexibility. and may have additional software for more advanced data processing.1 RFID-The technology Radio Frequency Identification (RFID) is an automatic identification and data capture technology. 2.

concerns.An impact of RFID Technology in Warehouse and Supply Chain Management In recent years. while barcodes are better suited for manual scanning. The primary benefit of RFID tags over barcodes is their ease of use and reliability. RFID has become indispensable for a wide range of automated data collection and identification applications that would not be possible otherwise. RFID tags enable reliable automation. simultaneously automatically. and a heightened security automation. barcodes scanned have one Though it is a costlier technology compared with barcodes. RFID tags can be read while in motion. the technology has received increased attention due to a confluence of actions. The technology offers a revolution in the efficiently of item management and traceability. Perhaps most significant is the fact that several RFID tags can be read and while to by be one. continuing emphasis on cost control within industrial systems. .10 - . in any orientation. including supply technology chain advancement. through intervening objects and without the need for line of sight.

improving visibility and reducing labor requirements for a variety of shipping.An impact of RFID Technology in Warehouse and Supply Chain Management Interest in using radio frequency identification (RFID) technology in warehouse and distribution operations is at an all-time high. goods.11 - . . which creates new benefits and challenges. Users need to understand RFID’s capabilities and limitations to accurately assess the impact it can have on their business. and it is used primarily to deploy automatic identification procedures to provide information about people. receiving and inventory management operations. Warehouse and distribution center operations are at the center of the surge in radio frequency identification (RFID) activity. RFID stands for Radio Frequency Identification. RFID is proving to be a cost-effective resource for saving time. Wireless identification and tracking with RFID represents a new way to conduct operations. animals and products in transit.

Taking into consideration that radio waves can move in unexpected directions because they can be absorbed by some objects and reflected by others. The first one is to let the reader decide if there exist any RFID units from a certain family within the range. but powerful transmitters and receivers increase not only the range but are less sensitive to interference. Modern RFID systems still suffer from radio jamming where a noisy signal causes a congested frequency. There are two equal but not identical decisions made by RFID. That includes the lowest powered radios because the signal travels more than what is considered to be the maximum range. leads to unpredictability that opens the door for sniffing and spoofing attacks.12 - . . Since RFID is based on radio waves. and the second one to verify the identity of the RFID unit that answers the calls from the reader or who tries actively to contact the reader.An impact of RFID Technology in Warehouse and Supply Chain Management The RFID device serves the same purpose as a bar code or a magnetic strip on the back of a credit card. The specification guaranties functionality. but it uses radio signals to exchange identifying data which increases the range of identification from a couple of centimeter to several meters. there is always a risk for an intended and unintended listening.

The systems also direct and optimize stock put away based on real-time information about the status of utilization. put away and picking. or WMS. It will describe the technology and its maturity.An impact of RFID Technology in Warehouse and Supply Chain Management This thesis will provide an overview of RFID technology and how it may be applied to warehousing and distribution operations.13 - . including shipping.2 Warehouse Management System A warehouse management system. 2. and will also provide examples of how RFID technology can be best used in warehouses and distribution centers. . standards and industry initiatives. is a key part of the supply chain and primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions. receiving.

wireless LANs and potentially Radio-frequency identification (RFID) to efficiently monitor the flow of products. mobile computers.14 - . or a real-time wireless transmission to a central database. there is either a batch synchronization with. .An impact of RFID Technology in Warehouse and Supply Chain Management Warehouse management systems often utilize Auto ID Data Capture (AIDC) technology. Once data has been collected. such as barcode scanners. The database can then provide useful reports about the status of goods in the warehouse.

g. . racking etc).An impact of RFID Technology in Warehouse and Supply Chain Management The objective of a warehouse management system is to provide a set of computerized procedures to handle the receipt of stock and returns into a warehouse facility. The primary purpose of a WMS is to control the movement and storage of materials warehouse – within you a might even describe it as the legs at the end-of-the line which automates the store. Warehouse management systems can be stand alone systems. model and manage the logical representation of the physical storage facilities (e. pack and ship product out of the facility. manage the stock within the facility and enable a seamless link to order processing and logistics management in order to pick. traffic and shipping management.15 - . or modules of an ERP system or supply chain execution suite.

inventory planning. it is much wider and goes beyond the physical boundaries. the WMS can data track products during the production process and act as an interpreter and message buffer between existing ERP and WMS systems.16 - . Efficient warehouse management gives a cutting edge to a retail chain distribution company. Warehouse Management is not just managing within the boundaries of a warehouse today. IT applications & communication technology to be used are all related to warehouse management. Warehouse management does not just start with receipt of material but it actually starts with actual initial planning when container design is made for a product. cost management. Warehouse design and process design within the warehouse (e. Inventory management. Even production management is to a great extent dependent on warehouse management. loading and unloading are also covered by today. The container storage. Wave Picking) is also part of warehouse management.An impact of RFID Technology in Warehouse and Supply Chain Management In its simplest form.g. Warehouse management is part of Logistics and SCM. warehouse Warehouse management management today is part of SCM and demand management. .

The objective of warehousing management is to help in optimal cost of timely order fulfillment by managing the resources economically.17 - . Warehouse management deals with receipt. Supply Chain Management spans all movement and storage of raw materials. tracking systems. and communication between product stations. regional warehouses services by the central warehouses and retail warehouses at the third level services by the regional warehouses and so on. and finished goods from point of origin to point of consumption (supply chain). starting with the Central Warehouse(s).An impact of RFID Technology in Warehouse and Supply Chain Management Warehouse Management monitors the progress of products through the warehouse. normally finished goods. It involves the physical warehouse infrastructure.3 Supply Chain Management Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers. there are levels of warehouses. workin-process inventory. Warehouse management = "Management of storage of products and services rendered on the products within the four walls of a warehouse" 2. In the multi-echelon model for distribution. . to intermediate storage locations or to final customer. storage and movement of goods.

An impact of RFID Technology in Warehouse and Supply Chain Management Supply Chain Management is the systemic. strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain. for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole. .18 - .

Throughput efficiency must be increased. bottlenecks . As a consequence costs must be lowered throughout the chain by driving out unnecessary costs and focusing attention on adding value.An impact of RFID Technology in Warehouse and Supply Chain Management Supply chain strategies require a total systems view of the linkages in the chain that work together efficiently to create customer satisfaction at the end point of delivery to the consumer.19 removed and performance .

More recently. and logistics management. the loosely coupled. Supply Chain Management is the integration of key business processes across the supply chain for the purpose of creating value for customers and stakeholders. procurement. and customers. In essence. Supply chain management encompasses the planning and management of all activities involved in sourcing.20 - . The supply chain system must be responsive to customer requirements. third-party service providers. supply chain management integrates supply and demand management within and across companies. It also includes the crucial components of coordination and collaboration with channel partners. self-organizing network . intermediaries.An impact of RFID Technology in Warehouse and Supply Chain Management measurement must focus on total systems efficiency and equitable reward distribution to those in the supply chain adding value. conversion. which can be suppliers.

The identification is accomplished by an interrogator. finances. the basics: RFID is a means of uniquely identifying an object through a wireless radio link.4 How RFID Works First. also called a transponder or "slave" that has a unique identification code.An impact of RFID Technology in Warehouse and Supply Chain Management of businesses that cooperate to provide product and service offerings has been called the Extended Enterprise. A supply chain. services. as opposed to supply chain management. 2. also called a reader or "master. is a set of organizations directly linked by one or more of the upstream and downstream flows of products.21 - ." and a tag. With SCEM possible scenarios can be created and solutions devised. Supply chain management software includes tools or modules used to execute supply chain transactions. Supply chain event management (abbreviated as SCEM) is a consideration of all possible events and factors that can disrupt a supply chain. Data is exchanged between tags and readers using radio waves between the . manage supplier relationships and control associated business processes. and information from a source to a customer.

The latest generation of RFID allows the dozens of individual objects within a group to be uniquely identified at the same time. Because no line of sight is required between the reader and the tag. and can be very advantageous in high-speed reading.22 - . decodes the transmission and transfers the data to a computer. or look up the tag ID in a database to direct further action. unattended reading stations can be set up to identify objects on a conveyor belt or within a transport container. may simply record the reading. The computer. which must be read one by one. Fast . or processes the signal being broadcast by the tag. and no direct line of sight is required for the transaction. This is in contrast to bar codes.An impact of RFID Technology in Warehouse and Supply Chain Management tag and interrogator. sorting and material handling applications. in turn. and may also direct the interrogator to write additional information to the tag. The interrogator asks the tag for the code.

pricing has come down considerably.23 - . Today. This advanced functionality comes with a price. .An impact of RFID Technology in Warehouse and Supply Chain Management simultaneous processing and unattended reading are the main performance characteristics that set RFID apart from bar code. which helps amortize the initial system cost and provides strong total cost of ownership (TCO) advantages compared with identification methods that must continually be replaced. with many tags suitable for warehouse and distribution operations costing considerably less than a dollar per RFID tags are often reusable and can be packaged to be extremely durable. however. which in the past often made RFID systems cost-prohibitive.

RFID is a wireless link to uniquely identify objects or people.24 - . and reader electronics to communicate with the tags. Once a link is established with a unique ID on an item. or programmable logic controller for storage or action. its data is captured by the reader and can then be transferred through standard interfaces to a host computer. RFID systems include electronic devices called transponders or tags.An impact of RFID Technology in Warehouse and Supply Chain Management At its most basic level. then automation of an assortment of processes ensues. One example is the . It is sometimes called dedicated short range communication (DSRC). printer. When a transponder enters a read zone. These systems communicate via radio signals that carry data either uni-directionally or bidirectionally.

This information can be immediately known to a central monitoring operation. It is real-time information that can be shared with the sender. etc. with forwarders. and with the customer waiting for the shipment. At read points in a distribution system.25 - .An impact of RFID Technology in Warehouse and Supply Chain Management sorting of packages moving along a conveyor system. The shipment can be automatically directed to the appropriate dock door. truck. all without human intervention. The shipment can be redirected while in transit if plans change. 2. This puts real time decision-making power into the hands of many functional operations up and down the suppy chain.5 RFID Components RFID systems consist of two main components: . carrier. the boxes can be ID’s as to their location in their path to their destination.

other controlling systems. normally consists of a coupling element and an electronic . which is located on the object to be identified. The interrogator or the reader.An impact of RFID Technology in Warehouse and Supply Chain Management Figure : RFID main components The transponder. etc. the transponder. Many readers are equipped with additional interface such as RS 232 to forward the data received to other systems such as PCs. a radio frequency module (transmitter or receiver) and a coupling element to the transponder. The actual data carrying device.26 - . which can be a read or read/write device depending on the design and the technology used. A normal reader usually contains a control unit.

An impact of RFID Technology in Warehouse and Supply Chain Management microchip. which do not have any voltage supply. They get the power through the coupling element (contact less). are only activated when they are within the interrogation zone of a reader. Figure : RFID data-carrier device.27 - . . The transponder Passive transponders.

and have limited read range.6 Tags The lower-cost tags generally are passive (meaning they have no internal power source). a tag attached to a product in a work-in-process application would uniquely identify the product each time it passed by a reader.An impact of RFID Technology in Warehouse and Supply Chain Management 2. making them heavier than passive tags. for example. monitor temperature through a process or give operational instructions to a robotic workstation when they arrive attached to their item. have limited data storage capacity (typically 32 to 128 bits). For example. they hold little actual data but serve to identify the object to a database containing larger amounts of information. Higher-cost tags are available for many more complicated longer read applications. they are usually used as "license plate" identifiers. These higher-capacity tags could.e. They often have their own power source (these are known as active tags). The reading.28 - . i.. In turn. and large data storage capacities (upwards of 1M). allowing products to reach their loading destination without human intervention. then have updated status information appended to the tag when the task is . are read-only (not rewritable). a conveyor-based sorting system could identify the item and receive routing instructions from a database application. would be recorded in a database. and any work performed on the assembly. Like bar codes. making them essentially self-contained databases.

but the most common is passive RFID systems. The tradeoff is that they have shorter read ranges than battery-powered tags. Passive tags consequently tend to be flat. Types of RFID Tags 1) Passive There are many varieties of RFID. however. rather than reflecting back a signal from the reader as a passive tag does. Most active tags use a .29 - . in label form. giving these tags a life span of 5-10 years. they must derive all the power required for their operation from the reader’s electromagnetic field. 2) Active An active RFID tag is one that has a transmitter to send back information. and offer a virtually unlimited operational lifetime. the internal power source can burn out. are low in cost.An impact of RFID Technology in Warehouse and Supply Chain Management complete. This flexibility does have a cost. Passive tags have no battery or other power source on the tag.

For instance. RFID sensor tags for measuring air pressure in car tires or . 3) Sensor Sensor tags incorporate sensors as well as memory on the tag. but they tend to be expensive.30 - . military uses active tags to track containers of supplies arriving in ports. These tags are primarily used for tracking expensive items over long ranges. the U.S.An impact of RFID Technology in Warehouse and Supply Chain Management battery to transmit a signal to a reader. Active tags can be read from 300 feet (100 meters) or more.

distribution center and supply chain applications operate on one of three major frequency families: 1) 13.56 MHz high frequency. Frequency is an important factor in transmission range and speed. common for short range (up to . RFID Technology for Warehouse and Distribution Operations 2. Frequencies and the EPC System Frequency is one of the biggest variables affecting RFID range and performance. However. This is an important consideration when planning logistics and supply chain applications.7 Frequencies RFID systems are available in a wide range of frequencies to suit various performance needs. Compatibility problems are gradually being solved through standardization efforts. Nearly all RFID systems used for warehouse.31 - .An impact of RFID Technology in Warehouse and Supply Chain Management temperatures for cold food and drug monitoring are becoming more widely used. bandwidth availability is regulated by telecommunications authorities in each country. particularly in standards sponsored by the ISO. and not all frequencies are available for use throughout the world. Safety and Medical) bands. Most tag frequencies share the ISM (Industrial.

7.45 GHz microwave transmission. Sizing of the antennas and tags becomes more critical. UHF technology is by far the most common and best suited for the majority of manufacturing and logistics needs. which some call intermediate. 2) 860-960 MHz UHF. 3) 2. Of the three. More .32 - .56 MHz) technology is widely used in other applications and is a viable option for short-range applications. band encompasses the 10 to 15MHz range.1 Frequencies . which includes the well-known EPCglobal Gen 2 standard and provides range of up to 20 feet.An impact of RFID Technology in Warehouse and Supply Chain Management about 1 meter) reading. Read range with a fixed station reader is around 1 to 3 meters (3 to 10 feet). with 13.56MHz being the most common.High Frequency The high frequency. 2. which is used in active tags that provide long range reading. High frequency (13. It is often promoted for item-level tagging. such as for product authentication and retail shelf management. commonly used for identifying cargo containers. although the reading speed is higher than the low-frequency band.

but are now also available in other frequencies. this band has the potential to become more cost-competitive through volume purchase of tags. The American National Standards Institute (ANSI) standard for RFID identification of returnable transport items.2 Frequencies . which complements the ANSI MH10.56MHz.8 bar code shipping label standard. 2. Typical applications here include access control and smart cards. .7.An impact of RFID Technology in Warehouse and Supply Chain Management expensive than low frequency. were produced at 13. The first "smart labels" which are RFID tags embedded within adhesive bar code labels.Ultrahigh Frequency (UHF) Ultrahigh-frequency RFID encompasses the 850 to 950MHz band and is frequently championed for distribution and logistics applications. specifies the 902928MHz band for item identification.33 - .

and cost-intensive. the more memory needed. In general. Read-only tags have fixed information securely programmed into them when they are manufactured. which as with all frequencies depends on tag size. read many (WORM) tags may have data written to them once only post-manufacture and are the most popular kind of tag currently used.45GHz or 5.34 - . Write once. Rewritable tags are the most memory. 2. which must be considered when planning the application. 2. . typically at either 2.An impact of RFID Technology in Warehouse and Supply Chain Management The ePC specification supported by Wal-Mart also utilizes the UHF band.7. which increases both the size and cost of the tag. These products offer the highest data read rates.8 Read/Write Capabilities When considering what RFID technology is right for your warehousing or distribution application.8GHz.Microwave Some RFID products are also produced in the microwave bandwidth. the more versatile. Read range. but provide flexibility to update data. or the more stand alone a system is. but are also more expensive and have higher power requirements. Rewritable tags have a shorter writing range than reading range. power output and interference.3 Frequencies . is up to 10 feet. it's important to understand the difference between the various types of writing capabilities available.

security and provide other advantages. rewritable memory.An impact of RFID Technology in Warehouse and Supply Chain Management Reading Characteristics RFID’s suitability for use in industrial environments is just one of the attributes that set it apart from bar code and other automatic identification and data collection (AIDC) technologies. Readers can also identify multiple tags simultaneously. One of the most significant is that no direct line of site is required between the tag and reader to exchange data. and many have memory that can be partitioned so that some portions can’t be changed (such as a serial other number) portions while can be updated. high-speed reading processes. with . Most RFID tags are read/write. and even to be read through packaging material. which can be used to improve visibility. RFID tags offer secure. This enables tags to be read if they’re not perfectly aligned with the reader.35 - . Organizations can take advantage of these attributes to reduce labor requirements with automatically triggered reads and unattended.

storage records. standardized and secure serialization that EPC provides. antenna design. The control and sensitivity that antennas and readers provide is often much more important than their range. Depending on the tag style. Another characteristic of RFID technology that is useful for warehouse operations is its read range. frequency and other variables.36 - .An impact of RFID Technology in Warehouse and Supply Chain Management transaction histories. Long read range can increase the chances of unintended reads. . unique serial number for each RFID tag.9 Range and Sensitivity Range can be an overvalued and misleading indicator of RFID system performance. Active tags offer even longer range and are sometimes used for yard management and container tracking applications. passive tags can be read from near contact to approximately 20 feet away. Electronic Product Code (EPC) RFID technology provides a standardized. 2. Many new supply chain processes are emerging to take advantage of unique. pedigree information or other variable data.

An impact of RFID Technology in Warehouse and Supply Chain Management In the case of warehouse operations.10. RFID Technology for Warehouse and Distribution Operations Vehiclemounted RFID readers with high-performance antennas provide an outstanding degree of reading control. which is a leading reason that reading technique is being adopted rapidly. and are read only when desired. finely tuned directional reading and control are more important than range to ensure only desired tags are read. 2.37 - .10 RFID Systems 2. What these systems do is to check and monitor if there is any .1 Low-end systems These systems are classified as the bottom end of low-end systems.

Transponders that are read-only and have a microchip are also classified as low-end systems.38 - . pallets and more. to the number The data encoded flow is the consist the transponder reader when transponder is located in the HF field of a reader. Such systems have one serious limitation: the reader cannot handle more than one transponder at a time due to collisions that might take place when several transponders start transmitting simultaneously. which results in blocking the reader. . The advantages of read-only systems are that: they can operate at all frequencies specified for RFID.An impact of RFID Technology in Warehouse and Supply Chain Management transponder in the interrogation zone of the detection unit placed in the reader by simple physical effects. transponders are cheap to manufacture and chip area can be minimized due to the simple function of transponder which lowers the power consumption that leads to very high ranges. If small amount of data is required for identification. Such transponders permanently unidirectional usually and from have of a unique several serial bytes. containers. then low-end systems are the way to go. identification of animals. They can replace barcode systems for example in the control of product flow.

2 Mid-range systems Such systems have a writable data memory that can vary in size from a few bytes to 100 Kbytes EEPROM (for passive transponders) or SRAM (for active transponders). The use of a coprocessor reduces radically the computing time. and it is common to implement crypto logical procedures such as authentication between the reader and transponder in those systems. The top end of such systems has dual interface smart cards (contact and contact less interface available on the same chip) which have a cryptographic coprocessor.10. Such transponders can even be selectively addressed by the readers. which makes such contact less smart cards suitable for applications that . that makes such systems very diverse and popular.10. 2.3 High-end systems High-end systems consist of a smart card operating system together with a microprocessor that makes it possible to use more complex authentication and encryption algorithms.An impact of RFID Technology in Warehouse and Supply Chain Management 2.39 - . Midrange systems can operate at all RFID frequencies available. Collision is prevented due to the transponder’s ability to perform selective reading and writing when processing some simple commands of the reader because of the state machine encoded.

After having been programmed by the user.56 MHz. . There is a third field-programmable structure that is also of the read/write variety.40 - . 2. Read/Write is the term applied to RFID tags that can be written (or programmed) and can subsequently be rewritten and reread numerous times. The operation frequency is at 13.An impact of RFID Technology in Warehouse and Supply Chain Management require secure data transmission based on encryption. Read Only is the term applied to a tag in which data is written (or programmed) once during manufacturing.11 Memory Capacity and Functionality There are two main types of tag memory structure: Read Only and Read/Write. this Write Once/Read Many (WORM) structure accords the user the ability to lock the tag’s memory indefinitely. such as ticketing systems for public transport or electronic purses. and afterwards can only be read and but not changed or altered in any way.

in the same way as linear barcodes reference a database containing modifiable. product-specific information. There are two areas that should be considered and are particularly relevant to applications.41 - . Read Only tags most often operate as a license plate in a database.An impact of RFID Technology in Warehouse and Supply Chain Management Read Only tags are typically passive and are programmed with a unique set of data (usually 32 to 128 bits) that cannot be modified. . Constraints Related to RFID When implementing RFID solutions it is necessary to recognize some of the physical constraints of the technology.

Also. . making it difficult for the RFID readers to communicate with the tag.An impact of RFID Technology in Warehouse and Supply Chain Management Firstly. If metal is placed between the tag and reader. This is analogous to tuning your FM receiver just a little bit away from the channel you are trying to receive. Placement of currently deployed high frequency (HF) tags is a critical factor affecting system performance. readability is compromised. A way to avoid this is the process of staggering tags in like items that are shelved in close proximity. Care should particular be taken in environment when tagging items with metal foil covers. care should be taken to avoid tags being placed flush. the presence of metals in the RFID reading environment and. When tag placement in one item directly overlays another placement and both items are in very close proximity. The antenna component of each tag interacts and changes the radio frequency.42 - . secondly. diminishing the quality of the reception. as metal is impervious to RF waves. Communication between RFID readers and tags occurs via electromagnetic waves operating in the Radio Frequency spectrum. the placement of RFID tags relative to each other. The communication is governed by the laws of physics related to RF propagation. communications can be broken.

The Automotive Industry Action Group (AIAG) and other industry associations are also developing their own RFID standards. which is working on a series of RFID standards for item management. has undertaken the most RFID standardization projects and focuses on technical standards that are accepted globally. there are still challenges in regards to some forms of media. . One of its most important subcommittees is JTC 1/SC 31 Automatic Identification and Data Capture Techniques. which coordinates much of its work with the ISO is another important standards body and has established an RFID standard for shipping container identification. Size constraints and presence of metal are core issues to overcome.12 Standards The International Organization for Standardization. ANSI.An impact of RFID Technology in Warehouse and Supply Chain Management While RFID tags operate with high reliability and readability on most items. These constraints apply equally to all applications of RFID 2. which are often based on ANSI and ISO efforts.43 - . best known by its acronym ISO.

Such as in the case of the current situation regarding UHF. which maintain the U./EAN bar code system and many other standards. and application standards. Working to get standards in place can delay that procedure. but too many conflicting standards can have the same consequence.44 - . the trade association for the automatic identification industry. often set by industry associations.C. AIM Global. maintains an updated guide to current RFID standards activity. too many standards can be the same as having no standard at all. and RFID is no exception. AutoID Inc.The Auto-ID Center’s work has since been transferred to a new entity. . Any technology needs standards to gain acceptance. which specify performance requirements for interoperability.An impact of RFID Technology in Warehouse and Supply Chain Management The Auto-ID Center at MIT led research to create a specification for RFID for item-level tagging in the consumer goods industry. that describe how RFID can be used for a specific function. which was created by the Uniform Code Council (UCC) and EAN International. there are technical standards..P. which it calls the Electronic Product Code (ePC). Further complicating the matter.

Many hardware and software suppliers are just beginning to explore how RFID technology can tie into warehouse management systems (WMS) to produce a warehouse/DC of incredible efficiency. . and serve as a permanent asset ID.An impact of RFID Technology in Warehouse and Supply Chain Management 2. RFID is emerging as an intriguing option to complement data collection and product identification in the supply chain.13 Applications Applications are constantly being developed and refined as the technology advances and the supply chain industry continues to work for the cradle-to-grave data flow that will streamline the product pipeline. particularly when the pallets are reused within a closed system. Several WMS providers now support RFID data entry in their software. RFID can identify forklift location to allow systems to monitor activity and assign the closest forklift to those pallets needing moved. • Forklift identification. Because of the visibility it can provide. and its newfound cost effectiveness.45 - . Here are some potential RFID applications in warehousing and distribution environments: • Pallet and case tracking.

pallets and equipment can control item movement and sound alarms in case of unauthorized removal. here's one example of what could happen: In receiving. Step by step. cases. .13.46 - . Data are transferred into the warehouse management system (WMS). items. • Smart shelves: Retailers are experimenting with readers embedded in stocked store shelves to keep track of tagged inventory and notify either the back room or the supplier when stock is low. in concert with existing systems and other ADC technologies.1 RFID in the Distribution Center There are several possibilities for how RFID technology can be utilized in warehouse and distribution center. cases and/or pallets are read by a portal reading unit placed at the dock door as they are unloaded from the truck. chips on products.An impact of RFID Technology in Warehouse and Supply Chain Management • Access control: Chips embedded in ID cards can control locks and prevent unauthorized entry. 2. The application could be modified for use in warehouses and distribution centers for materials management and inventory control.

If bar codes were being used here. while others can be staged and stored. making the process much more labor-intensive. by workers. keyboard or clipboard.47 - . The system reconciles its orders and sends back information that will allow some items to be cross docked for immediate transport. All of this happens without human hands ever touching a scanner. all received items would have to be scanned. when they are removed. When stored on shelves with readers. the action is also automatically recorded. the readers automatically record what items have been placed there.An impact of RFID Technology in Warehouse and Supply Chain Management updating its database. their labels clearly visible. .

An impact of RFID Technology in Warehouse and Supply Chain Management

If cases are broken up and items repacked, each item is reassigned to a tagged case by scanning the item's bar code or RFID tag and the case/pallet tag. That information transfer initiates an assignment of the pallet or case to a truck or dock.

Cases/pallets are moved along conveyor belts, triggering readers along the way that track the movement and also adjust conveyors as needed to redirect the cases/pallets. Should there be a specific item out there that is needed to fill an order, a worker can go through the aisles, with a handheld reader loaded with the needed unique ID, until the unit beeps, locating the needle in the haystack with keen efficiency.

When cases/pallets are loaded back onto trucks, door-mounted units again record the activity, updating the central database and also initiating a sequence that produces documentation such as advance shipping notices (ASNs), packing slips, invoices, etc.

2.13.2 Item-level tracking
Item-level tracking in supply chain applications has always been a coveted thing. Having each and every item uniquely identified, instead

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An impact of RFID Technology in Warehouse and Supply Chain Management

of generally identified with, for example, a U.P.C. symbol- opens up a whole new level of tracking management.

The Electronic Product Code, or ePC, being developed by the Auto-ID Center at MIT (see sidebar/addendum) is the latest RFID technology proposed for item-level tracking of consumer goods, and other RFID technologies have also been considered for this application.

While the technology is still being developed and tested, there is much speculation on what applications would be best to use the technology with. The Auto-ID Center sees strong possibilities in warehousing for pallet, case-level and item-level tracking as described in the

application section. Numerous studies and analysis by the Center and leading independent consulting firms support this assertion, stating that these types of applications can provide strong return on investment (ROI) in most circumstances.

Some estimate that item-level tracking will not happen for some time, up to 10 years. However, analysts say there are clear business advantages in pursuing pallet- and case-level applications now. "RFID projects yield the biggest immediate benefits when they support order fulfillment and logistics," according to a report by Forrester Research

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An impact of RFID Technology in Warehouse and Supply Chain Management

Inc., Cambridge, Mass. "As such, most near-term RFID testing should concentrate on pallets, cases, distribution centers and warehouses not items and store shelves." RFID Technology for Warehouse and Distribution Operations

2.13.3 Application Planning Considerations
To design a successful system, you must not only understand what you want the system to do (application), but you also must be very clear about what technologies can be used to deliver the performance you seek. When defining your perfect solution, it is important to ask yourself often, "Am I adding this technology to do it better, or am I simply adding technology?" Reading hundreds of tags per second could easily overwhelm a network or software application. Existing identification systems should be retained where they are sufficient, with RFID used to complement them or eliminate blind spots or bottlenecks in processes.

Part of application evaluation necessarily involves defining what the technologies you are considering can and cannot do. Just like any other technology, RFID has its limitations, and it's important to know what they are.

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A pallet of RFID-tagged cases can be identified through either an unattended portal reader or a vehicle-mounted or handheld device. Though cost has come down and will continue to decline.4 Shipping RFID can validate pallet loads and improve shipping accuracy even if it isn’t used as part of the picking process. But the two can work together to provide you with an effective. RFID cannot read tags over great distances. and many tags in close proximity to one another or varying orientations could affect performance. 2.51 - . though it can certainly work in concert with technologies that can. an RFID tag will always be more expensive than a paper bar code label. Also. highly productive warehouse and distribution management system. interference can be a problem. streamlined. because we are talking about radio waves. and we doubt you will ever see five cents per tag in low to medium volumes. RFID tags cannot replace bar codes. so metal.13. . Finally.An impact of RFID Technology in Warehouse and Supply Chain Management For example. liquid.

A scan at the shipping dock can be used to update information in logistics applications and to record the goods out of inventory. . The read data could also be used to trigger generation of a shipping label for the pallet (which itself may include an RFID tag) and to provide information for an advance ship notice (ASN). Lastly. RFID can even be used to validate the trailer if equipped with an RFID tag.52 - .An impact of RFID Technology in Warehouse and Supply Chain Management The order management system or WMS would match the read data against the customer order to validate that no cases were missing and that case quantities were correct.

53 - .1. whereas secondary sources refer to any materials which have been previously published. 3.An impact of RFID Technology in Warehouse and Supply Chain Management 3.1 Interviews . Primary data consists of:     Interviews Observations questionnaires experiments.1 Primary Data Data that has been collected for the first time by the researcher are defined as primary data. Primary sources are those data which are unpublished and is gathered directly from the people or organization. Research methodology There are two main techniques for collection of data which are:   Primary data Secondary data. 3. Throughout this study have observations and interviews been used to gather data.

Interviews employees project buyers (the with head.54 - . By using an unstructured interview the interview become more as a conversation between the interviewees and the interviewer.An impact of RFID Technology in Warehouse and Supply Chain Management Interviews are according to different ways of questioning by personal contacts or via telephones. coordination. The interviews consisted of both discussions to obtain as much helpful information as possible and semi structured interviews. . and other knowledgeable persons) have been very helpful since it is very important to receive correct information. By using a structured interview all questions are decided in advance. email and text messages. The interviews can be executed toward one person or a group. A semi structure interview has a decided subject but the questions are formulated during the interview. There are a number of different ways to execute an interview.

The observation can be planned or can take place without the observed knows about it.An impact of RFID Technology in Warehouse and Supply Chain Management The benefit of having interviewing the employees at Procurement and Supply is that they know about their processes. The benefit of having the time and opportunity to do observations is that a personal opinion can be formed which will be a good complement to the interviews and the reliability increases. Throughout this study an open mind is held due to be able to present an objective study. The unstructured is used in advance when interviewing the buyers in order to get a dialog where the most trustworthy information is shared. It is vital that the collected information is right and trustworthy so that a reliable thesis can be carried out. where the shortages are located and what is needed to be addressed.2 Observation Observations can be executed in different ways. As being a part of some work shops observations could take place. Primary semi-structured interviews are held with the project coordinator and the head of Procurement and Supply to keep track on important issues.1. 3. The observer can either participate in the researched activity or observe by watching from distance.55 - . . Both unstructured and semi-structured interview has been carried out. Instead of acquiring quantitative information a concentration of gathering qualitative information through these interviews is done.

which is to extend a method for implementation of systems that suits the department of Procurement and Supply. To fulfill the purpose. For a researcher it is important to see what other researcher has done and their results within the research field.56 - . The literature study is based on the purpose of this report.An impact of RFID Technology in Warehouse and Supply Chain Management Due to the authors role several observations could be carried out successfully. 3.2. its benefits and the . brochures or magazines.2 Secondary Data The secondary data consists of various documentation.1 Literature Study A literature study consists of researches from books. By working close to both the buyers and other knowledgeable personal observations will be contributed to an insight on how different aspects can affect each other. 3. It is essential to use secondary data in order to get a wider sight. I need to find some background information about systems in general.

An impact of RFID Technology in Warehouse and Supply Chain Management risks that implementations of systems bring. assumptions and adjustments had to be made. The disadvantage however. The benefit of making an extensive literature study is to find out what the theory claims about the topics in focus.57 - . . is that it is hard to find theoretical studies that suit the company’s unique existence. Consequently.

the investment can be leveraged and ROI improved by encompassing additional applications. which provides direct cost savings and often improves accuracy. end-to-end RFID systems. Because RFID operations may evolve or expand. Many common warehouse and distribution center activities provide a strong opportunity to generate positive return on investment (ROI) from an RFID system. However. RFID is one useful tool to keep in mind for current and future system design.An impact of RFID Technology in Warehouse and Supply Chain Management 4. companies typically don’t implement comprehensive. Conclusion It is imperative to remain open to new technologies and the improvements they can offer business. Rather. By starting with a flexible RFID infrastructure. which produces other benefits. mobile readers are . they selectively apply the technology to improve specific processes that are labor intensive or prone to creating delays or inaccuracies.58 - . RFID can often reduce or eliminate manual labor requirements.

As applications grow. . It is hard to find information in the standard because it must be paid before you can see it. which is both expensive and time consuming. which would be a severe problem for a prospective customer evaluating what is on the market. It has been easier to find information about building kits than a complete locking system. so does inventory visibility. Finding the relevant information has been surprisingly difficult. which ultimately leads to lower inventory levels and more efficient supply chain operations.59 - . Also you do not know if it contains the right type of information before you pay! It has been very difficult finding information regarding security in door locks that use active RFID.An impact of RFID Technology in Warehouse and Supply Chain Management often advantageous to fixed-position models because they can be used for multiple applications. On the other hand plenty of information is available for systems using RFID tags because tags are very cheap and their use is increasing dramatically.

The drop in prices of powerful and cheap computers make attacks easier to carry out. . but the risk of low battery is a fact. For example most of the locking solutions are battery driven to ensure availability even when electricity is down.60 - .An impact of RFID Technology in Warehouse and Supply Chain Management There are also obvious problems that are not treated at all. besides even finding relevant information about attacks and relevant kits to apply such attacks is not a problem at all.

61 - . but the availability might be affected. • The Use of 128-bit standard encryption algorithms to increase security and make attacks such as reversed engineering very hard to carry out. Necessary future improvements The following improvements are regarded as necessary to achieve a reasonable level of security for RFID-based technology. • Make electricity as the main source of power to the locks and use battery as a backup for sudden loss of electricity to increase availability. log the time and date and lock permanently until certain measure is made. • Use true random number generators not deterministic.An impact of RFID Technology in Warehouse and Supply Chain Management 5. . • Implementing a kind of watch dog that monitors the amount of unsuccessful challenges and from a certain sender and warn the owner in case a number of different challenges were unsuccessful.

An impact of RFID Technology in Warehouse and Supply Chain Management • Use more sophisticated algorithms that are known to be strong. an increased chip area (hard to place in small devices) and more expensive chips to produce. such as: longer system response time. more power consumption due to higher computation complexity (shorter battery life). more sophisticated algorithms and true random number generator might raise some problems that have to be dealt with. • It is important to point out that the use of longer keys. . • Use hardware solutions in both the transmitter and the receiver instead of using EEPROM with write protected algorithm in.62 - .

Reference/Bibliography .An impact of RFID Technology in Warehouse and Supply Chain Management 6.63 - .

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