RFID and Business Processes
RFID is expected to dramatically improve many different business processes, including Supply Chain Management (SCM), Customer Relationship Management (CRM), Manufacturing Resource Planning (MRP), and Enterprise Resource Planning (ERP).
The benefits to SCM are expected to be enormous. By way of example, a study conducted at the University of Florida in 2001 found that $5.8 billion (US) was worth of inventory was lost due to administration errors. The use of RFID for tracking the movements of inventory can easily save hundreds of millions or even billions of dollars.
A study conducted at the University of Florida in 2001 found that $5.8 billion (US) worth of inventory was lost due to administration errors.
In general, RFID can be used to improve supply chain integrity, reduce labour costs, provide greater inventory/merchandise visibility, reduce material/product loss, promote vendor-managed inventory control, virtually eliminate the need for physical inventory management, and ensure product authenticity.
In a manufacturing environment, RFID can be used to improve:
Management of inventory and materials
Timing and control of critical resources
Improve Warehouse Management systems (WMS)
Manufacturing and warehousing processes improved include shipping and receiving, put away processes, picking processes, zone tracking, yard management, and lot tracking.
In a retail environment, RFID can be used to improve:
Merchandise inventory and ordering processes
Customer Relationship Management (CRM)
Merchandise tracking and fraud prevention
While people typically think of only the front-end portion of a RFID system such as tags and readers, the back-end processing systems are critical to fully realise the benefits of RFID. Front-end RFID subsystems can capture and report an enormous amount of data. Back-end subsystems must process the data and manage it in a way that it becomes useful information. Back-end RFID subsystems must manage the interface to and communications with various consuming applications and processes such as inventory management and tracking, ordering, shipping and receiving.
RFID and Privacy
Some consumer and privacy advocacy groups fear that RFID will take away personal privacy through exploiting the use of RFID to monitor peoples’ movements and behaviours without there knowledge or content, for example, by tracking them via RFID tag in their clothes. While there may be some legitimate concern about RFID privacy, this type of issue is not well founded as it would require satellite-based tracking, which while possible, is not practical for commercial consumer operations such as consumer market research.
RFID Implementation and Operational Issues
Since radio waves bounce off metal and are absorbed by water, RFID tags may not be embedded within metal objects or items with high water content. This can be overcome by using lower frequency tags, which have better penetration capabilities. However, low frequency tags also require a more clear signal path between the tag and the reader, but not as close as bar codes.
Readers are often designed to support time division multiplexing to prevent the signal from one reader interfering with the signal from another reader known as tag collision. Designing RFID systems to capture signals from individual tags in a serial fashion prevents reader collision.
Being that active tags are larger and more costly, economics dictate that they be a good choice for applications such as tracking high-value goods and related services. On the other hand, passive tags are cheap and small in comparison, allowing them to be placed on virtually any item or object.
Until RFID tags become much cheaper, it will be impractical to identify millions of items.
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