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RFID - The Next Revolution in SCM

RFID is considered the next stage of barcodes and allows for electronic labeling and identification without line of sight. It consists of RFID readers and tags with microchips and antennas that can be embedded in products or used as labels. RFID provides benefits over barcodes like the ability to read multiple tags simultaneously and provide read/write capabilities. The EPC network developed by MIT Auto-ID Center uses Electronic Product Codes and Object Naming Services to provide real-time product information over the internet. RFID allows for improved tracking of products throughout the supply chain, reduced inventory shrinkage and stockouts, more collaboration between partners, and opportunities for dynamic pricing. However, issues around standards, cost, software, and privacy still need

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163 views

RFID - The Next Revolution in SCM

RFID is considered the next stage of barcodes and allows for electronic labeling and identification without line of sight. It consists of RFID readers and tags with microchips and antennas that can be embedded in products or used as labels. RFID provides benefits over barcodes like the ability to read multiple tags simultaneously and provide read/write capabilities. The EPC network developed by MIT Auto-ID Center uses Electronic Product Codes and Object Naming Services to provide real-time product information over the internet. RFID allows for improved tracking of products throughout the supply chain, reduced inventory shrinkage and stockouts, more collaboration between partners, and opportunities for dynamic pricing. However, issues around standards, cost, software, and privacy still need

Uploaded by

saurabhku12
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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RFID – The next revolution in

SCM
Group 9
PGP/12/248 MURALIKRISHNA BATCHALA
PGP/12/260 BADRINATH GM
PGP/12/261 SAURABH KUMAR
PGP/12/262 PIRAMANAYAGAM M.
PGP/12/265 RICHIE GIFTSON PAUL J
Introduction
Technique for electronic labeling and
identification
Considered as the next stage of Barcode
Usage in varied sectors
Electronic toll pricing
RFID car keys for automobiles to detect theft
European central bank uses RFID in bank
notes to detect counterfeit
Of course used in SCM
Still in infancy when it comes to SCM
SCM termed as killer application for RFID
Used by Wal-Mart, P&G, Target, Home
depot, Gillette etc
What is RFID System?
Consist of RFID readers and tags
A microchip attached to an antenna and
embedded in product or put as label
RFID Vs Barcode
Line of sight not needed unlike barcodes
Ability to read it en masse
Read Only Vs Read/Write Vs Combination
Active Vs Passive RFID tags
Frequency bands determines the range of
operation
More the frequency, more is the cost of
readers and tags
MIT Auto-ID Centre
Goal of developing low-cost, open-standard
RFID for SCM
Split into two organizations
EPC Global – developing and administering
RFID
Auto-ID labs – Research and develop new
technologies
RFID infrastructure developed and known
as EPC network
Consist of
Electronic Product Code
Object Naming Service
Product markup language
Using EPC Network to locate
RFID benefits for SCM
Tracking Products
Manufacturing uses for closed loop tracking
of parts, components and subassemblies
Pallet level tracking can lead to efficient
consignment verification
Stacks of multiple pallets can be read at a
time
Automation and streamlining of SC process
can reduce cost
Pallet and case level tagging can result in
significant benefits at shipping, warehouse
and DCs
Ex – Dell, Ford and many CPGs
Tracking using RFID
Impetus for collaboration
Causes of SC inefficiency – lack of
collaboration and visibility
Remember Cisco case of inventory write off
Visibility can help identify sources of
variability and help reducing it
EPC provides real time information on
internet about the product's presence in SC
Improves critical areas such as demand
management, planning, forecasting and
order management
Automatic electronic sharing of data
speeds up workflows
Reduce Inventory shrinkage
Lower level of inventories – success mantra
for retailers
Stock lost due to shrinkage estimates to
1.7% of total annual sales
Consumer ends up paying higher for
compensating this loss
RFID can provide a security staff to curtail
the above
Security could be alerted if the product
leaves without billing
Inventory errors occurs as receiving errors
or as dead inventory
Dead Inventory – inventory that cannot be
located
Prevent Stock-Outs
Stock outs – KPI for a retailer
Loss of sale and customer dissatisfaction
Stock outs can occur mainly because of
Inaccurate forecasting – 47%
Shelf stocking policy, product in store but
cannot be located – 28%
The second point could be effectively
addressed using RFID
RFID could sense low amount of stock on
shelf and raise an alarm, instead of manual
tracking
Major benefit of RFID id preventing stock
Fair Pricing of Products
Most effective way to enhance profit
Dynamic Vs Differential pricing
Dynamic – market conditions determine
price
Differential – Different market segments
RFID provides timely demand and
inventory in SC provides efficient means to
price the product
Frequent price changes will be an effortless
task with RFID
Ex - Ford uses efficient revenue
management systems using hybrid
RFID case studies
Impediments to RFID in SCs
Lack of universal standards
Frequency spectrum mismatch
Standards from EPC global might solve this
High cost of tags and readers
Wal-Mart needs tags at rates less than a cent
Major obstacle for RFID adaptation
Absence of Application software
Extracting pertinent information from tags is
difficult
Many MIS do not have built in RFID
processing capabilities
Other factor – scattering by soda and liquid
detergents
Anonymity is a major concern
Thank You

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