RFID in the Retail Supply Chain: Issues and Opportunities

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RFID Technology

RFID is an acronym which stands for radio frequency identification. It is a wireless technology which uses electromagnetic fields in identifying animals, people or objects (Violino, 2013). Many authors contend that RFID is a technology that will tend to replace or supplement other technologies such as barcode (Violino, 2013). RFID is composed of two parts; the tag and the reader.

The tag is simply a tiny microchip with a code. The code is the heart of the technology. It is invoked when identifying the object to which the tag is tied to. On the other hand, the reader is an apparatus that transmits the wireless frequencies to the tag inquiring its location. In operation, when the tag senses the request from the tag, it sends back the code fixed to it.

History of RFID

The concept of RFID technology is not a new technology in the world. It can be traced back in the 19^th century when progress in scientific inventions in the field electromagnetisms was being advanced.

Reid (2005) notes that innovation in the field of electronic induction by Faraday and the explanation put forward in the operation of electromagnetism using equation by James Maxwell laid the basis for RFID growth during the early days; this was the beginning point in RFID technology which is being widely used today.

Reid (2005) also shows that the use of automatic RFID systems begun with the development of the automated object detection systems. Among these systems was the radio transmitter. The radio transmitter designed in 1926 had the capacity to detect objects at a distance. The real application of the RFID system was during the World War II.

The technology called “Identify Friend or Foe”, IFF was used by the British Royal Air Force to facilitate pilots and radar officers distinguish between friends and enemies using RF signals (Royal Air Force, 2006). In 1960’s, the technology was fitted in trucks accessing secure facilities.

Reid (2005) indicates that by 1980’s, the technology was commercialized, hence, more chips were produced and made available to facilitate tracking and managing of properties such as razor blades, animals and railway cars on a large scale.

Why the Technology?

The problems experienced in tracking shipping containers, automobiles and train cars were enormous, hence, a creative solution to contain it was necessary. Because RFID technology had been used during the WWII and was successful, businesses viewed the used in the business environment, it will yield similar results, thus, RFID was seen as an ideal technology to adopt.

RFID was able to track and locate objects in real-time. Additionally, the mobility of the technology made possible to be tagged in rail cars. For example, by 1994, the United States had fitted RFID in rail cars.

Also, the problem in toll collection was inescapable. Hence, it was very cumbersome to collect tolls from various stations. The RFID, therefore, was important in solving this problem (FTC, 2005). Efforts to deploy RFID in the 1980s and 1990s was a success because tags fitted in the equipment’s relayed data in the database automatically and in real-time.

FTC (2005) point out that the counterfeit and insecurity were widespread in the casino industry, thus, to mitigate this concern, RFID technology was vital in containing counterfeit and enhancing security. One of the early casinos to embrace this technology was the Wynn Casino in Las Vegas.

The casino fixed the RFID chips on gaming tables and gambling tokens to detect counterfeits, fraud, prevent theft besides improving service delivery FTC, 2005). Other than casinos, most countries have incorporated chips in travel documents to guard against theft and security (FTC, 2005).

Benefits of RFID

Though the costs of implementing an RFID system are high, coupled with the risks, the technology offers countless benefits to individuals and businesses. Traiman (2001) point out that RFID reduces distribution and warehouse labour costs.

This is because the technology is efficient in replacing labour intensive activities and the point of operations. The RFID is able to track with accuracy products, cartons and pallets with sensors in wherever location they are in the warehouse.

RFID offers improved planning and forecasting (Traiman, 2001). The technology makes the supply chain management visible facilitating planning and forecasting. This helps in tracking the location of inventory in the supply chain.

Businesses lose millions of dollars per year due to theft. With RFID, these losses are avoided (Traiman, 2001). RFID track items in the supply chain creating efficiency and minimal errors. In the retail system, the technology reduces theft to higher margin as all products are tracked in real time.

RFID technology is consistent and in real-time, thus, it saves customers time in selecting the product of choice enhancing his/her experience. Similarly, customer’s product placed in a cat is easily tracked and if kiosks comprise of shopping experience, businesses are able to make automatic offers on related items improving the customer’s experience.

Advantages of RFID

Compared with other products such as bar codes, RFID has many advantages to the business and individuals. Reid (2005) illustrates that RFID perform well in different environments. For example, in adverse conditions, tags can be deployed allowing and operate without any hindrances.

RFID provides real-time updates. The tags have been designed to enhance communication and retention of information with the on-board memory. Thus, this strategy can be used by the businesses to carry out preventive maintenance of records and calibrate history among others. Reid (2005) explains that this process can be achieved automatically with no human intervention.

RFID has the advantage of trace-ability. Traiman (2001) explains the embedded chip is able to recall, document and track history of a single object or item in real-time by incorporating user data, UIC and other information on-board. This saves time which would have been otherwise used in doing the same manually.

Disadvantages

Despite fixing efficiency and streamlining operations, RFID has elicited major challenges in the society and the business world. Albrecht (2005) cites that as the RFID technology becomes less sophisticated and expensive, the concern regarding privacy has arisen. The society fears that people could be bound to specific information concerning their purchasing behaviour by unscrupulous retailers (Albrecht, 2005).

FTC (2005) illustrates that some devices such as walkie-talkies and forklifts in the neighbourhood of an RFID hamper efficiency and functionality of the technology. As both devices use radio frequencies, there is a problem of signals getting mixed up.

The cost of implementing RFID technology is high. It covers the purchase of readers, tags and softwares. Hence, basing on the size of the organization, it can be time consuming and very expensive in the long-run. FTC (2005) notes the cost of tags is high, hence, depending on the size of the organization, it might cost the organization a lot of money.

Political aspects

Mixed reactions have elicited on the use of RFID technology. One of the issues is the debate on regulatory and legal system. FTC (2005) point out the technology can be abused by people with ill intent.

It can be used to perpetuate criminal activities such as stalking, though advocates for the technology cite its usefulness in preventing crime, theft and forgery, criminal may exploit gaps in the system causing considerable harm. Thus, there is a policy vacuum on how the technology can be used effectively within the confines of the legal system to guarantee protection of users’ data.

Also, Kelly and Erickson (2005) point out the privacy concern of data stored in RFID databases. Using RFID might elicit conflict with existing regulations that guide data protection because the RFID technology is invisible. The available data protection laws in various jurisdictions are not clear on/or is not prepared to develop laws to regulate the omnipresent data processing.

Furthermore, RFID allows data to be collected and stored in a central database. Critics allay fears that this aspect can lead to theft of personal data and encourage misuse which is in contradiction to the right of privacy enjoyed by individuals (Kelly and Erickson, 2005).

However, pundits advocating for this technology cite it has beneficial to the society when used appropriately. For example, in the medical care, the technology can be used to save a life. However, the user has to make a choice of either using the technology or not (Kelly and Erickson, 2005).

Social Setting

A lot of issues generated by the use of RFID technology in a social setting are wide with far reaching implication, not only to businesses, but also on individuals. Of importance is the management of data stored on these devices. There are fears that information stored in such systems may lead to misuse of personal data because RFID tag has a unique ID which may be linked to personal identifiable information.

Violino (2013) point out that threats such as action, preference, association and constellation associated with the daily life of an individual feels threatened by the RFID technology. Similarly, Kelly and Erickson (2005) illustrates that societal privacy threats such as the erosion of individual liberties are at risk.

This is because there is rising concern that the RFID technology allows stored data to be transferred across stakeholders, networks and organizations. This concern amplifies as the data linked to different objects becomes connected to identify users without their consent.

If such data is used to fix profiles, its viability may curtail the right of choice of users and contribute to making unstructured decisions in regard to an individual (Kelly & Erickson, 2005).

Kelly and Erickson (2005) points out that as the RFID tag is becoming more widespread through deployment of related applications, there is a potential risk of “function creep”. For instance, he cites that the intention of embedding RFIG tag in casino chip was well thought.

It was intended to contain counterfeit and improve security. However, the technology together with personal identifiers might be used to track how individuals play and record winnings and losses. Such applications, coupled with profiling events which a user has no control of may cause intrusion to an individual’s privacy.

Pest Aspect

Albrecht and McIntyre (2005) indicates that an RFID microchip has been widely used in agriculture, particularly in woody plants to store and retrieve pertinent information on their health. The microchip collects various information such as pesticide usage, soil fertility among others. The information is linked to the database for analysis.

Other than incorporating RFID in plants, the technology is placed strategically in ground to automatically detect pests, making their eradication much faster (Albrecht & McIntyre, 2005). However, there are rising concerns that the using the technology has negative potential on the environment because leaky metals may leave harmful toxins in the soil causing diseases and increasing pest resistant.

Social Sorting

Social sorting is a process of using data to identify, classify, order and control the population. Various arguments have been advanced on how the RFID system perpetuates social sorting. Albrecht and McIntyre (2005) indicates that using RFID may necessitate new forms of surveillance.

Although other methods of surveillance such as access badges, internet and video cameras exists, compared to these technologies, RFID arouses more reaction because it strengthens misuse because of aggregation of information about an object or an individual.

The information collected through surveillance might be altered, cloned allowing identity usurpation and used for unintended purposes such as discrimination and victimization of individuals.

Relation to the Panoptican and RFID

Panopticon bears close resemblance to RFID technology. Samatas (2008) explains that Panopticon changed the European justice system from being a corporal punishment system to a prison architecture that fixed self-control. Prisons were constructed in a round figure that allowed prisoners at the centre to be visible to the surveillance guards.

As a prisoner was conscious of being watched, he subjected himself to the authority of the disciplinary system. Similarly, the RFID posses the same concept and is more distressing than Panopticon though its technology based. Similarly, because it is chip based surveillance is enhanced as the chip can be attached or fixed on almost everything and tracked in whichever location the object might be (Samatas, 2008).

Another similarity is that Panopticon was a perpetually stressing a de-humanizing aspect. This is in close resemblance to RFID technology. RFID knows exactly where an object is, in this way, there is an expression of fear commonly unknown to others.

Because surveillance technologies are aligned with humans, it creates emotions in human beings because they feel their independence and control is under observation (Samatas, 2008).

References

Albrecht, K 2005, Spychips: How Major Corporations and Government Plan to Track Your Every Move with RFID, Thomas Nelson Inc, Tennesse.

Albrecht, K and McIntyre, L 2005, Spychips: how major corporations and government plan to track your every move with RFID. Web.

FTC 2005, Radio Frequency Identification: Applications and Implications for Consumers. Web.

Kelly, EP and Erickson, GS 2005, “RFID tags: commercial applications v. Privacy rights”, Industrial Management & Data Systems, Vol. 105. No. 6, pp. 703 – 713.

Reid, AS 2005, “RFID Tags and the European Union: Really free internal distribution?”, Journal of International Trade Law and Policy, Vol. 4. No. 1/2, pp. 1 – 30.

Royal Air Force 2006, Royal Air Force History.

Samatas, M 2008, From thought control to traffic control: CCTV politics of expansion and resistance in post-Olympics Greece, in Mathieu Deflem, Jeffrey T. Ulmer (ed.) Surveillance and Governance: Crime Control and Beyond (Sociology of Crime Law and Deviance, Volume 10), Emerald Group Publishing Limited, pp. 345-369.

Traiman, S 2001, Tag, you’re it! The EPC tag could revolutionize the retail supply chain, Retail Systems Reseller. Web.

Violino, B 2013, What is RFID?, RFID Journal. Web.

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