MGW 3381 The State of Technology- RFID

Radio Frequency Identification- The Technology

In an organization there has always been a need to identify “things” which could be from
documents, products, people, inventory level, etc. In rapid changing environment, managers
need this sort of information to make quick and accurate decision. One such evolving
technology that can aid is RFID (Radio Frequency Identification), which “is an electronic method
of transmitting data over radio frequency waves”[ CITATION Puf08 \l 1033 ]. It’s similar to bar code
system however “RFID uses radio frequency whereas bar code uses line-of-sight to
communicate”[ CITATION Puf08 \l 1033 ]. It is a technology with a growing market, ongoing
advancement and practical application of auto platform identification in areas such as supply
chain management, hospitals, transportation, product tracking and much more.

There are three major components in RFID; the tag, antenna and the reader. The tag is
“embedded with a silicon microchip to store data with the size similar to a grain of
rice”[ CITATION Puf08 \l 1033 ]. Most tags contain at least two parts (Aspen Publishers, 2009):

1) Integrated circuit for storing and processing information.

2) An antenna that receives and transmits the signal.

RFID tags are mainly categorized into two groups, the active (UHF), passive (HF) and
assisted passive. Active tags are ultra high frequency that uses battery to power the microchips
which allow it to transmit, process and store data internally[ CITATION Puf08 \l 1033 ]. Passive tag
which has no power source and only store very limited information. It is activated when passed
through a magnetic field from the reader. The third is the battery assisted passive, which require
an external source to wake up but have significant higher forward link capability providing great
read range. RFID tags are inserted with unique electronic product code (EPC) as to provide
data such as product information, location, quantity etc. It has many shapes form and sizes
depending on its application practicality. The reader is the system that is use to receive/ transmit
data to be process by using a computer software. “It sends a signal that activates or ‘wakes up’
a corresponding RFID tag which transmit the unique EPC code”[ CITATION Puf08 \l 1033 ].

The history of radio frequency engineering marvel can be traced way back “in 1864
where Clerk Maxwell predicted the existence of electromagnetic waves, of which microwaves

2 Managing Information System

 MGW 3381 The State of Technology- RFID

are a part, through Maxwell’s equations”[ CITATION DWy06 \l 1033 ]. The creation of radar was
the idea to apply radio frequency to reflect waves from objects[ CITATION DWy06 \l 1033 ]. The
practical application were during ‘The Great Wars’ “when the British used the IFF (Identify
Friend or Foe) system to identify enemy air crafts on the coast”[ CITATION DWy06 \l 1033 ]. The
modern father of RFID was Charles Walton when he patents the use of RFID in 1973. His idea
was rejected by General-Motors but was bought by the lock-making firm Schlage to make
electronic-locks. In 1990’s Dr Sanjay Sarma of MIT was a major contributer towrds the
developments in the RFID area while he was working on how to have a robot to recognize and
respond to the enviroment. It was not until a decade later when RFID is widely used and
demanded by organizations.

The initial application of RFID is used in the agricultural sector to track live stock.
However with recent development on the size, shape and storage capacity, its application has
widened. RFID wristbands are now used in hospitals as a medium to check patients whether
they are in the correct operation[ CITATION Mar05 \l 1033 ], their prescribe medication and
medical history. “Every year in the U.S. approximately 100,000 people die from medical errors,
with 7,000 dying just due to drug interactions arising out of the over 3 billion prescriptions
dispensed annually”[ CITATION Sch03 \l 1033 ]. In the education sector, libraries are also common
user of RFID tags as they place it in the book to control the flow of books or other learning
material. RFID readers are place at exits to eliminate theft issue even if the book is inside the
bag and assist librarians in shelving process. In United States, “a district school in Rhode Island
has announced a pilot program to monitor student movements by means of radio frequency
identification (RFID) chips implanted in their schoolbags”[ CITATION Gut08 \l 1033 ] It can locate
student’s whereabouts within the school compound, their daily activity, attendance to help in
ensuring security and discipline of students. Therefore the application of RFID is boundaryless
and there are many oppurtunities to add such value.

Alien Technology Corporation

Alien Technology Corporation (ATC) is one of many leading companies in creating and
manufacturing the UHF Radio Frequency Identification (RFID) products and technology. ATC
was established in 1994 and located in Morgan Hill California. They produce RFID tags, readers
and provide professional services to assist their customer in business problems, improving

3 Managing Information System

 MGW 3381 The State of Technology- RFID

productivity & improve supply chain system Alien Technology caters customers from small
retailers to large scale manufacturers, transportation, cargo and other industries. In 2003, they
receive their largest order of 500 million tags low cost tags from Gillette which was to support
their supply chain management and retail stores. By using RFID it over right the use of the
existing barcode which stores more data and reduce the number of counterfeit of Gillette’s
product line[ CITATION Jou03 \l 1033 ].

ATC’s ultimate aim in the RFID business is “to produce RFID tags in high volume and at
a low cost”[ CITATION Ali10 \l 1033 ] . By using the latest Generation 2 standard tags the company
now offers superior read range software to benefit their customers to take full advantage of their
RFID system. In addition the United States government has accredited their products as
“Qualified Anti- Terrorism Technologies under the Support Anti-terrorism by Fostering Effective
Technologies (SAFETY) Act of 2002 for airports baggage and cargo handling
systems”[ CITATION Ali10 \l 1033 ]. According to a research the difference between Alien
Technology and its competitor are due to their technology wise based on the extreme small
RFID form, unique antennas and their worldwide band without jeopardizing the durability or
transmission range[ CITATION Gra07 \l 1033 ]. This are some reasons why ATC has remain
relevant in the RFID business market.

Wal-Mart Corporation

One of the major drivers behind the RFID early adoption and implementation was large
retailers such as Wal-Mart “whereby in 2003 they announced a three year technological
compliance plan for its top 300 suppliers”[ CITATION Spi04 \l 1033 ]. Wal-Mart is the world largest
chain of grocery retailer that sells millions of product ranging from furniture’s, groceries, books,
movies, electronic, jewelries etc. They are able to provide all these services due to their
“legendary” supply chain management which is their key success factor (KSF) in the retail
business [ CITATION ASA09 \l 1033 ]. Therefore by adopting RFID technology, this will significantly
improve control over their supply chain management to meet customer demands.

By implementing RFID tags at pallet and case level, Wal-Mart will be able to “identify
and track the products as it arrives at their warehouses until shelving at the giant
retailer”[ CITATION RFI05 \l 1033 ]. Their aim is to reduce out-of-stocks by providing visibility into

4 Managing Information System

 MGW 3381 The State of Technology- RFID

the location of goods with RFID tags. In addition it also helps Wal-Mart suppliers to improve
their visibility of product, automated order fulfillment, improved inventory management and
product delivery. Companies such as Conair admitted that by using this system it had showed
immediate benefits as mentioned above[ CITATION Fif09 \l 1033 ]. Thus by being one of the early
adopters, Wal-Mart has set a standard for others maintain lower inventory level and still meet
their customer demands.

 Touch’ n Go Sdn Bhd

Touch’ n Go Sdn Bhd (TNG) is an active user of RFID technology in Malaysia, by

providing smart cards to ease expressway toll payments. Initially, their services are limited to
major expressways such as PLUS and Metramac, however it is now available for all major
expressways in Malaysia. Touch n Go card is a passive RFID that “uses a contactless smart-
card technology that enhance the efficiency of paying low value but high frequency transaction
that acts as an e-wallet.”[ CITATION Tou10 \l 1033 ].

There are many benefit that users will get by using Touch’ n Go. Firstly they save their
time by not queuing at toll exits in the same time saving their fuel and reduce traffic congestion
at toll exits. Secondly, they can make payments for goods or services at selected car parks,
public transportation, petrol kiosk, fast food and etc to. Thirdly, Touch’ n Go is easy to reload at
almost all petrol kiosk, ATM, and toll exits. Some Touch’ n Go card are auto debit when the
amount runs low. Thus, these are values that TNG delivers by using RFID technology

Advantages of RFID

There are two key advantages which RFID can deliver to an organization that it replaces
barcode system and improve supply chain variability.

The barcodes system has been used for many years in nearly all the industry. The
benefit is that RFID can help the manufacturers to change it production processes beyond what
they can achieved than using the bar code system [ CITATION Hoz08 \l 1033 ]. RFID tags can

5 Managing Information System

 MGW 3381 The State of Technology- RFID

store more data than the barcode. This is due to the structure that can only identify the product
and its manufacturer[ CITATION DWy06 \l 1033 ]. It can’t notify information such as the
production date, packaging date or travelling time because the data that can be stored are
limited. RFID uses radio waves to read information and does not require line-of-sight reading
like the barcode. The information on the item is obtained manually when the action of scanning
the bar code label with a reader. However RFID can read through materials that can be read
almost instantaneously even within the pallet of mixed product. It actually read one product at a
time but it reads so fast, it’s almost unnoticeable. Barcodes are prone to environmental
exposure such as extreme heat, chemical reaction, scratch, dirt, rain, etc that made them
unreadable. RFID tags are protected by plastic sealed and could eliminate environmental
hazards.

RFID can significantly improve supply chain variability and improving service quality. It
has improved the ability to match product demands and supply, improve productivity, shelf
product availability, reduce error reductions, product traceability, more control over stock and
able to see real time supply chain performance. A research conducted by Angeles R., in 2005
on Great Rootbeer, Inc on how they improve their supply chain from RFID tags. They “tagged
every root beer can that is made with a unique electronic product code” [ CITATION Ang05 \l
1033 ]. Therefore they can track these cans once they exit the docking area. This information
will be passed on to their system for inventory update, sends a message to the retailers and
acknowledge the freight forwarding company on the location delivery. During the journey to the
retail stores, the system will be able to track where exactly the truck is located [ CITATION
Ang05 \l 1033 ]. As it enters the retail outlet, it will be marked as goods received and payments
transactions are made. When a customer buys a can of root beer the tag will than send a signal
to the system for inventory update and Great Rootbeer will produce them. Furthermore, once
the root beer cans are disposed and sent to recycle centers, more RFID readers at these
center’s will sort this cans and be sent back to Great Rootbeer for reuse [ CITATION Ang05 \l
1033 ].

Limitations of RFID

6 Managing Information System

 MGW 3381 The State of Technology- RFID

Cost has been the most cited main problem in many organizations to adopt RFID
system. If contrast the “barcode cost just half a cent each, while RFID tags cost more than 5
cents”[ CITATION Shi09 \l 1033 ]. The author argued, as a result, a significant portion of Wal-
Mart’s suppliers rejected its mandate to adopt the newer technology [ CITATION Shi09 \l
1033 ]. In another study they discover that each RFID tags cost 20 cents or more depending on
type and feature”[ CITATION Puf08 \l 1033 ] . While RFID tags still cost 5 times than barcodes
it becomes challenging for smaller organization to adopt RFID system. These include start up
costs, training employees, restructuring the IT system and educate their customers. Barcode is
remains relevant and popular thus many organization feels that they do not need the features
offer in RFID tags especially small organization. Furthermore “RFID systems are very complex
to design and implement”[ CITATION Puf08 \l 1033 ].

Security is another area that limits the adoption of RFID. There are risks of private
information getting stolen from the tags. Since that most tags are passive it could be open to
attack by perpetrator from a safe distance. Other “security issue includes, ghost tags, physical
attacks, spoofing, and denial of Service (DOS)” [ CITATION Puf08 \l 1033 ] . Any of these
attacks can seriously hurt the company productivity. For example, if a person modifies the
contents of delivery location, the product will then be send to the wrong place. According to
Puffebbarger E., RFID security is vulnerable because most of the data are stored in plain-text or
unencrypted. He added that encryptions require more space, increased processing time and a
larger chip which need larger tags[ CITATION Puf08 \l 1033 ] . RFID tags listen and respond to
a signal no matter where it comes from or to who is being sent. A firm in Netherlands
successfully decrypted a RFID passport within two hours with a very predictable algorithm and
able to access all the information the passport holds[ CITATION Whi06 \l 1033 ]. Therefore
the level of security in a RFID tags are low and need to be improved.

Conclusion

In conclusion, RFID have an impact on business information system. Its wide

application, aggressive development and relatively low cost, is an option for organization to
utilize this technology to achieve competitive advantage. However, organization must first
identify whether there is a need to adapt RFID. Several industries such as supply chain,
hospitals, education, transportation and banks have started adopting RFID. There will be

7 Managing Information System

 MGW 3381 The State of Technology- RFID

undoubtedly a transformation on RFID, how fast it will move, what cost will it take and benefit
that it will bring remains to be seen. RFID is the future power of auto identification.

Manual Word Count (2168 words)

Bibliography
Alien Technology Corporation. (2010). Alien Technology- Products. Retrieved March 25, 2010, from Alien
Technology: http://www.alientechnology.com/products/index.php

Angeles, R. (2005). RFID Technologies: Supply Chain Applications and Implementation Issues. Infomation
System Management , 51-65.

ASA Research. (2009). Wal-Mart Sets the Standard for Supply Chain Automation. Retrieved March 26,
2010, from http://www.asaresearch.com/ecommerce/supplychain.htm

Fifer, M. (2009). Walmart Using RFID Tags to Improve Logistics. Retrieved March 26, 2010, from Ezine
Article's: http://ezinearticles.com/?Walmart-Using-RFID-Tags-to-Improve-Logistics&id=3006800

Grackin, A. (2007). RFID Checklist: RFID Markets and Solutions for 2008. Cambridge, MA: Chain Link
Research.

Gutierrez, D. (2008). Natural News. Retrieved March 26, 2010, from Natural News Website:
http://www.naturalnews.com/023445.html

Hozak, K. &. (2008). RFID as an enabler of improved manufacturing performance. Decision Sciences ,
859-881.

Martin, Z. (2005). RFID tags help identify patients before surgery. Journal of Health Data Management ,
14-22.

Puffebbarger E., T. F. (2008). RFID: New Technology on the Horizons for IT Majors. International Journal
of Business Data Communication and Networking , Volume 4 Issue 2.

RFID Journal. (2003). Gillette Confirms RFID Purchase. Retrieved March 25, 2010, from
http://www.rfidjournal.com/article/view/258/1/1

8 Managing Information System

 MGW 3381 The State of Technology- RFID

RFID Journal. (2005). Wal-Mart Begins RFID Process Changes. Retrieved March 26, 2010, from RFID
Journal: http://www.rfidjournal.com/article/view/1385

Roberti, M. (2009, June 29). Bar-Code Technology Is Not Cheaper Than RFID. Retrieved April 1, 2010,
from RFID Journal: http://www.rfidjournal.com/article/view/5005

Schoenberger, R. (2003). "Radio Rx". Forbes , 126-172.

Shih, G. (2009). Game Changer in Retailing, Bar Code Is 35. Retrieved April 1, 2010, from The New York
Times: http://www.nytimes.com/2009/06/26/technology/26barcode.html?
_r=2&ref=business

Spivey, C., Walker, J., & Wilson, C. (2004). RFID at What Cost? What Walmart Compliance Really Means .
Forrester Research Inc.

TouchnGo . (2010). Welcome to Touch' n Go. Retrieved March 27, 2010, from
http://www.touchngo.com.my/WhatSTAG_tech.html

White, D. (2006). Global RFID passport encryption standard cracked in 2 hours. Retrieved March 29,
2010, from Mobile Mag: http://www.mobilemag.com/content/100/102/C6340

Wyld, D. (2006). RFID 101: the next big thing for management. Management Research News , 154-173.

9 Managing Information System

 MGW 3381 The State of Technology- RFID

Appendix A

RFID integrated circuit, memory and the antenna

10 Managing Information System

 MGW 3381 The State of Technology- RFID

11 Managing Information System

 MGW 3381 The State of Technology- RFID

Appendix B

Overview:RFID data transmitting, processing and storing

Diagram 1: RFID system

12 Managing Information System