Applications of RFID Technology in modern supply chain management
Leveraging RFID Technology for Enhanced Supply Chain Management Efficiency
Raikar (2023) discusses Radio Frequency Identification (RFID) as a wireless communication method utilizing electromagnetic waves for recognizing and monitoring tags attached to objects, individuals, or animals. These RFID tags, housing digitally encoded data, are accessible to RFID readers without requiring direct visual contact. This capability enables readers to detect tags from considerable distances, unlike barcode readers. Widely utilized across sectors, RFID primarily aids in monitoring object locations and movements, such as tracking items in supermarkets or managing assembly line components in factories.
The RFID reader functions as both a transmitter and receiver, using an antenna to send signals to the tag. Upon receiving the signal, the tag responds by transmitting encoded data back to the reader, facilitating automatic identification and data capture (AIDC) when in proximity. Typically connected to a computer or handheld device, the reader updates the object's status using the acquired information Raikar (2023).
According to Raikar (2023), RFID tags are classified into passive and active types based on their power source. Passive tags rely on radio wave energy from the reader for transmission, while active tags have a small battery for transmitting information, allowing them to communicate over greater distances. Tags can also be categorized as read-only or read-write, dictating whether the reader can only access or also modify tag data.
RFID technology has emerged as a pivotal asset across diverse industries, transforming supply chain management by improving efficiency, streamlining operations, and providing real-time tracking capabilities. This thesis examines the multifaceted impact of RFID technology on contemporary supply chain management, emphasizing its essential role in optimizing processes and maximizing organizational performance.
Firstly, RFID tags have the capability to produce data spanning from suppliers through the manufacturing phase to sales, yielding efficiencies and effectiveness for the entire organization. Furthermore, RFID technology enhances the distribution process of goods (Carmago, Pereira & Scarpin, 2020). From an operational standpoint, initiating the identification process begins by affixing RFID tags to all pertinent materials and products. Subsequently, the tag is read, often occurring after a conveyor belt. Data extracted from the tag is transmitted to a database, typically hosted on the cloud. The product then proceeds to the distribution center for further categorization and onward transfer to retailers. At the distribution center, tag readers identify and segregate products to optimize distribution efficiency. Analogous procedures are replicated in retail establishments to recognize incoming products and relay the data back to the RFID enterprise database. Utilizing readers, product movement and whereabouts are readily discerned throughout the entirety of the process (Bhuvan et al., 2022).
Additionally, RFID serves as an electronic identification method, it presents a promising remedy for the transparency issues encountered in supply chains historically. It has the capability to tackle real-time data challenges by bridging the gap between physical objects/items and computer systems, facilitating automatic identification of data and database population. Unlike individual barcode scanning stations that offer data solely at specific points, an RFID-enabled warehouse can deliver continuous data throughout the entire supply chain route (Rangarajan, 2010).
Also, according to Rangarajan (2010), contemporary supply chains exhibit considerable fragmentation, with each component operating independently. This fragmentation leads to a lack of real-time data, thereby limiting visibility and hindering decision-making processes. However, integrating RFID technology enables manufacturers and retailers to surpass traditional barcode identification methods. By doing so, RFID enhances visibility through increased data granularity and timely updates.
Gao et al. (2004) suggested also that RFID technology's widespread integration into everyday items as smart labels is expected. This integration extends to supply chain management, where RFID enhances convenience, efficiency, and productivity.
However, the adoption of RFID systems introduces new security and privacy concerns. An essential security issue emerges when a store's inventory is labeled with unprotected RFID tags, potentially allowing monitoring by competitors' unauthorized readers. This poses significant risks due to the financial value of inventory data for both the organization and competitors. Moreover, privacy concerns arise from individuals being tracked through RFID tags on their belongings. Even if tags contain only product codes, an individual's brand preferences may inadvertently reveal their identity. Additionally, encrypted tag responses can still be exploited to identify and track owners. These concerns underscore the need for robust security measures and privacy protections to safeguard commercial interests and individual privacy (Gao et al., 2004).
In modern supply chain management, RFID technology is vital for enhancing efficiency, operations, and tracking. Integrating RFID systems offers organizations opportunities to refine processes, boost customer satisfaction, and gain a competitive edge. Despite security concerns, careful measures and Standard Operating Procedures (SOPs) adherence can overcome obstacles, ensuring sustainable growth and success.
References
Camargo, L.R., Pereira, S.C.F. and Scarpin, M.R.S. (2020), "Fast and ultra-fast fashion supply chain management: an exploratory research", International Journal of Retail & Distribution Management, Vol. 48 No. 6, pp. 537-553. https://doi.org/10.1108/IJRDM-04-2019-0133
Gao, X., Xiang, Z., Wang, H., Shen, J., Huang, J., & Song, S. (2004). An approach to security and privacy of RFID system for supply chain. In Proceedings of the IEEE International Conference on E-Commerce Technology for Dynamic E-Business.Beijing, China. https://ieeexplore.ieee.org/stamp/stamp.jsp?arnumber=1388318
Raikar, S. Pai (2023, September 18). radio-frequency identification. Encyclopedia Britannica. https://www.britannica.com/technology/RFID
Rangarajan, T. S. (2010). Enhancing Supply Chain Management Using RFID. Material Handling Management, 65(5), 22-23.