The objective of this report is to present analysis on how RFID are being used to improve the efficiency and quality of organizations, their products and services. The report has been divided into three sections namely introduction, which provides a brief discussion on the general relation of information technology to business most particularly the RFID. The methods used to construct this report is through random research of the topic and used the obtained readings to support the thesis. It was concluded through the readings and findings that RFID was able to improve efficiency of companies in term of securing their products and improved business operations through the integration of RFID system in their operations. This conclusion will be further explained in the findings section of this report.
Information Technology in Business: RFID
Information Technology shaped the world in many ways, it influenced the way of life, business and generally the way people work and live today. The same can be assumed on the influence of information technology in shaping the business world. Part of the innovations that IT has brought to the development of business is the integration of RFID or Radio Frequency Identification Tags on great number business related applications. IT helps increase productivity, management, monitoring and developing business processes. New industries were also created using information technology and a good example of that is the E-commerce. In order to increase competitiveness, corporations strive towards to react to relevant business events using real-time analytics, which in return became the avenue for the convergence of business intelligence and creation of various enterprise application integration (Melchert and Winter, 2004).
Findings and Analysis
In terms of the increasing number of RFID use in business, it became central to the functionality that involves, monitoring and managing supply chain and process efficiency. For example, the healthcare sector is already making use of RFID in dispensing and delivery of medications to the patients. Several prescription insurance companies are offering mail-order prescriptions in which the medications are being shipped door to door instead of spending time to drive to the drug store. However, sending over medication involves risk such as being lost during transit due to the fact that people handling the medication being shipped might be tempted to steal or unintentionally lost it along the way. Several approach were used to address the problem of lost medications by mail and one of them is the use of tracking system such as barcodes. Packages being shipped using third party logistics have their own tracking systems, but the customers and the prescription company itself does not have a real time access to the exact location of the package being sent out. Most of the time, the tracking information only comes out as soon as the barcodes were scanned at during departure and arrival at the destination point. However, there is no reliable data that can be extracted from the system in real time or while the package is on route to the customer.
Such problems create a negative implication to the company in terms of efficiency and quality of organization. Efficiency means the ability o the company to adhere to the indicated time of delivery and assurance that the products will arrive to the customer in good condition. Delays and deteriorated condition of the package upon receipt by the customer creates a notion that the company is not capable enough to provide good service or at least cannot live up to their organizational reputation. These possibilities of risks and negative implications to the company were the driving force for many business organizations to seek for more efficient means to improve efficiency and service quality. RFID’s are much preferred by manufacturers and pharmaceutical companies because it allows them to embed relevant information about the products such as batch number, original manufacturer and trace codes. In return the medications being shipped cannot be counterfeited and replaced with counterfeit medications. The embedded trace codes can be checked from time to time as the product passes through the radio scanners while in transit.
RFID is originally developed as a method of remotely gathering information through the use if radio frequencies from tags and to be picked up by transceivers. It was not primarily created to use for industrial purposes because RFID was first used by the military to track cargo and supplies shipped to military bases according to Landt (2005). However, the continuous technological advancements allowed manufacturers to use the RFID for tracking their products. Data Storage memory has been added to allow the user to monitor the movement of the materials in real time not only during transit, but also while still in the production stage (Boudjou, 2012). RFID is consists of three parts, the transceiver is the one that read and writes data to the tags and transmit data to the industrial controller. The second part is the tag, which contains information about the products in the internal circuitry, it also emits secured short range radio frequency that can be analyzed by the RFID reader. The third part is the network media; this is the system that connects the transceiver to the main industrial controller. All the information gathered by the RFID reader as the tags passes through the transceiver perimeter are being transmitted by the network media.
These developments in RFID technology allowed companies to fully integrate the system to their business processes and greatly improve monitoring capacities at the same time. Another major reason that manufacturers gained rapid return on RFID is because its industrial application can now be used in various possible ways within the organizational operations. For example, Wal-Mart, the biggest retail store chain in the United States uses RFID to trace and monitor pallets of goods delivered to and from their distribution centers. The cases and pallets delivered to their stores contain microchips embedded with information about the contents, quantity and variations of the goods in the pallets. The chief information officer of Wal-Mart Linda Dilman believes that the use of RFID is far more efficient than using hand-held barcode readers (Associated Press, 2004). In many ways, RFID have improved their logistical and inventory processes. Before the use of RFID was implemented, the goods are being counted manually and entail time consuming practices. The same can be said with barcode technology because although the counting method was replaced, scanning the barcodes one at a time was also considered to be time consuming. However, RFID would only need for Wal-Mart to set up the readers and as the pallets of goods passes through, the system automatically displays the information directly to their computer screens and the data can also be used to consolidate the quantities to the inventory system. This convenience also relates to efficiency because, manual counting is prone to human error, tag reading is far more efficient because the system does all the work and it saves time and money on the part of Wal-Mart.
Business operational efficiency and product tracking is not only thing that RFID can serve the industry sector. The same technology that tracks lipsticks and razorblades are now being used to track workers, work hours and cut jobs. Barker (2009) of Medill Reports Chicago wrote in his article that RFID also serves significant function in the quality of business operations in human resources management. I.D. Systems Inc. in Hackensack, New Jersey is in fact using RFID tags in their forklifts that are linked to the ignition and the only way to start the forklift engine is for the employee to use authorized badge (Barker, 2009). This idea is helpful for the company to track if the forklift assigned to the employee to operate is actually operating on time or if it lacks the required hours of operation. Tracking the time that the forklifts are in operation corresponds to the work hours that its designated drivers have completed in a day.
This method greatly improve the company’s capability to track employee work hours efficiently and in return also improves their business operations. It is apparent that not all employees have the same level of work dedication; there are that does not adhere to work schedules and cheats with their work hours. Defiant workers causes headache for employers and causes the business operations to suffer in terms of productivity. In addition, less diligent workers create a negative image for the company as a whole and as such, the company suffers service inefficiencies that they provide to their clients. RFID addresses the problem by providing efficient alternative for the employers to track their employees while on duty, to determine if they are working according to their schedules and perform their designated responsibilities.
Improving the quality of live stocks also calls for the use of RFID, as mandated by U.S. Department of Agriculture, RFID is being used to monitor the growth and tagging of cows being raised in open fields to identify their numbers and seek out the missing animals during the evening. This idea is also the same tenets encompassing the use of RFID in secured business facilities such as contact centers. The issued employee I.D. is embedded with micro chips also referred to as access cards. These cards are being used to track attendance and facility access, such access cards are programmed to work on the different entry points within the center building. For example, the access cards will work on production floor entrances and common customer service agent facilities. However, other employees such as the executives, engineers and programmers working in the center have higher access levels programmed in their RFID tags. This use of RFID as access cards within the business environment creates a more secure working environment for the business and serves as a security measure that identifies the people that will and will not have access in the key areas of the work place.
The integration of the product of information technology such as RFID in the business has greatly improved the corporate environment. IN the manufacturing industry, tracking their supplies and finished goods in real time is crucial to their business because they are vulnerable to great number of risks without the capability of tracking their goods. The possibilities of theft, damages and delays in delivery were due to efficiently tracking the products that in return reduces the aforementioned risks. In addition RFID tags the tracking capability can also be extended from the supply chain to the stores. From the store, RFID can also maximize efficiency for payments, personal identification and other potential tracking options that would deliver effective monitoring. Having to track the goods in real time would allow the companies to decipher problems that may arise due to unexpected circumstances that threaten the on time delivery of the goods to its destination. For example, if a customer ordered a smart phone online and the seller promises to deliver it within three days, the customer expects the phone to arrive within the promised time. However, untoward circumstances such as weather and accidents hinder the shipper for making on time. These consequences would result to delays and the customer to lose confidence with the seller because of its inability to deliver its promise of on time delivery.
However, with the use of RFID, the company selling the phone online would be able to explain exactly to the customer what happened to the delivery and allow them to compromise with the customer and offer compensation such as discount and cost of shipping refunds. In addition, tracking the goods on time provides the seller with adequate information on the location of the item and makes a more precise estimate of the new arrival time. In the manufacturing industry, RFID improves efficiency in terms of locating items in the production line that are missing or placed on the wrong line. For example, putting RFID tags on manufactured garments enables the manufacturer to efficiently track the number of garments being produced and if any case that a number of them are missing, they can be easily located using transceivers placed in several locations within the production facilities. This approach minimizes the possibilities of theft and misplacement of the goods as it goes through the manufacturing processes.
In general, RFID’s central role in business is to provide security and privacy mitigation done through effective management, operational strategy and technical control. Like any other technologies available, RFID enables the organizations to significantly changed their strategies and business processes to be a more effective and efficient approach. The RFID technology encompasses a complex combination of communication and computing technologies. The complexity of the system varies according to its implementation and purpose across sectors and industries (Karygiannis et al., 2007).
It was mentioned earlier that RFID is composed of three components, but aside from its hardware components it also has three subsystems namely RF Subsystem, Enterprise Subsystem and Inter-Enterprise Subsystem. The RF Subsystem performs the central function related to wireless transaction and communication. The Enterprise Subsystem on the other hand contains computer running special software that gather, analyze and process data necessary for the RF Subsystem to communicate transactions and data that are essential to the intended business process. The last subsystem is mainly the bridge that connects the first two subsystems to be shared to the entire organization boundaries.
All RFID systems contain the three described subsystems, their functions are inter-related to each subsystem, but serves the single purpose of supporting a particular business process such as supply chain. RFID is also using standard identifiers such as EPC, which contains the product code. The use of identifier formats such EPC makes it easier for organizations to decipher the codes embedded in the tags.
The identifier machine might require information from the main computer server to look up for the code database and match it with the captured EPC. This is the reason that RFID requires all the technical components to work efficiently. For example when the database is being distributed to the organizations connected to the company such as suppliers and stores, it would make it easier for all parties to identify the products through the use of standard information shared across the organizations. This also allows the organizations to facilitate look ups because the standard identifiers are consistent on all shared database. Security as one of the factors that provides purpose to RFID is also the same dilemma that corporations are facing throughout all areas of their business operations. The use of tags with an on-board memory is most of the time coupled with security mechanisms such as password protection and cryptography.
For example, there are tags that have lock commands that prohibits further alteration of its stored data. This mechanism secures the tags from data tampering and modifications. There are instances that even RFID tags were attached to the goods, the possibilities of changing the embedded information is high. Therefore lock commands are necessary to ensure that the data stored in the tags cannot be modified in any way. There are RFID systems that are also using middleware to segregate the gathered information according to the designated analytic systems. However, often times these analytic systems are also interconnected for the purpose of information sharing. For example, the middleware picked up the information from the RF Subsystem and forwards it to the database. The database on the other hand is also link to the data processing application for data analysis. Lastly, the data processing application may also link to the web server to make the data available online for remote viewing.
The evolution of information technology has provided the business sector with significant tools that enables efficiency and business process development. RFID is an example of this emerging evolution of greater technology that aids the business sector. The capacity to track locate and gather information about the goods at real time provides a strong efficiency in managing goods and the flow in various processes in the business. The exampled organization such as Wal-Mart is a statement to the efficiency and quality to the products and services that RFID provides to its user.
List of References
Karygiannis, T., Eydt, B., Barber, G., Bunn, L, and Phillips, T. (2007). Guidelines for Securing Radio Frequency Identification (RFID) Systems. Recommendations of the National Institute of Standards and Technology. 98, pp
Melchert, F. and Winter, R. (2004). The Enabling Role of Information Technology for Business Performance Management. Decision Support in an Uncertain and Complex World: The IFIP TC8/WG8.3 International Conference. 1, pp.536-546.
Landt, J. (2005). The history of RFID. IEEE Potentials. 5, pp
Boudjou, m. (2012). RFID Technology Improves Product Quality and Process Efficiency for Diverse Pharmaceutical Applications [online]. Available from: <http://www.pharmpro.com/articles/2012/04-RFID-Technology-Improves-Product-Quality-and-Process-Efficiency/>. [Accessed 5 January 2013].
Associated Press (2004). Wal-Mart begins using RFID product tags [online]. Available from: <http://www.msnbc.msn.com/id/4873013/ns/technology_and_science-tech_and_gadgets/t/wal-mart-begins-using-rfid-product-tags/#.UOgJi6wq-Ah>. [Accessed 5 January 2013].
Barker, J. (2009). Medill Reports Chicago [online]. Available from: <http://news.medill.northwestern.edu/chicago/news.aspx?id=111561>. [Accessed 5 January 2013].