The Role of RFID Technology in the Future of Business

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Table of Contents

Functional Parts of Radio Frequency Identification Systems
History and Application of RFID
Future Trends
Conclusion
Works Cited

Radio Frequency Identification (RFID) is a technology used to track moving objects and one that has a long history of use in the commercial world (Blecker and George 273). The technology is usually implemented in the form of an electronic transponder that is attached to moving goods, people or objects.

By analyzing the radio frequency admitted by the chip, one can identify the location as well as nature of the products instantaneously. However, the distance of detection varies from one type of RFID transponder to another with the maximum distance reaching six meters or even longer. Such long distance detection is very suitable for monitoring the logistical flow in supply chain management (SCM) systems.

An RFID device consists of four main components. They include the chip, antenna, battery, and packaging. The chip stores information such as name, price, and destination of the object that it is attached to while the antenna transmits the information to the recipient reader. The battery is an auxiliary component that supplies electricity to the antenna.

For active RFID chips, the battery is necessary to make sure that the device can emit signals at specified periods of time. For passive RFID chips, the battery is obsolete since energy is received from signals generated by the recipient reader. Packaging is the material that is normally used to protect the internal components of the entire device and can take the form of a plastic cover.

Ordinarily, RFID chips are very small and not easily detectable by bare eyes. As such, they are usually used by retail shops as a means to deal with theft cases. As RFID chips are easy to use, a recent utilization of the technology has been in the area of automation of identification and tracking of merchandise (Blecker and George 274).

Functional Parts of Radio Frequency Identification Systems

For objects to be recognized using RFID systems, they must be marked with vital details to facilitate the whole identification process. There are three basic components to an RFID system. A tag, sometimes called a transponder, is composed of a semi-conductor chip, an antenna, and sometimes a battery.

An interrogator or read/write device includes three key components that provide the necessary functionality. Finally, a controller or host, most often takes the form of a personal computer or a workstation on which a database and control software are installed.

Typically, the relationship between an interrogator and a tag is provided for through radio waves. Data is sent automatically from the tag and transferred to the interrogator immediately a tagged object is detected within the interrogator’s read neighborhood. Generally, tags have the ability to carry all the relevant information about the object they are attached to and this includes their serial numbers and other important details. Upon collection by the interrogator, tag information is then forwarded to the controller for central processing.

The main function of the interrogator is to provide a reliable link to allow the RFID tag to be connected to the controller. In effect, the interrogator is a computer system designed to perform numerous functions that are very critical to the RFID system. Typically, RFID controllers form a very critical part of the RFID system.

Besides being in charge of information processing, RFID controllers are also responsible for relating different RFID interrogators. Mostly, the controller is a workstation with database and control capabilities.

RFID controllers maintain inventories and enable suppliers to receive alerts when new item are required, verify identity and grant authorization, and debit accounts when necessary. RIFD controllers can also track the movement of objects throughout a system, and possibly even redirect them in much the same way like a conveyor belt in a manufacturing system.

History and Application of RFID

RFID has more than 40 years of history. It first came into existence during World War II when the Allies used it to detect friendly planes. Later, it was deployed in the form of small tags for checking high value goods in 1960s (Hunt et al. 36). Hitherto, the technology has been widely used by the general public, especially in the field of SCM.

The most well know example of this is Wal-Mart’s RFID-enabled SCM system. By requesting its top suppliers to transport goods with RFID tags, Wal-Mart has been able to determine which items are selling well in particular regions and this has been very useful in product planning and distribution.

Due to their level of simplicity, low frequency tags were mainly preferred for use in early RFID systems. Moreover, they were easier to manufacture than high frequency tags. From a functional point of view, however, low frequency tags were cumbersome and quite expensive.

Over time, the advantages associated with low frequency tags have been outweighed and preference is slowly moving to the use of high frequency tags. Unlike the low frequency tags, high frequency tags are more affordable and generally represent the face of modern technology. Their prices have further been lowered by the ever changing world of technology and it is envisioned that this trend will continue.

By combining the strength of RFID and other information systems, it is possible to extend the use of the technology to other business areas such as Customer Relationship Management (CRM). In fact some large enterprises have already conducted some CRM services using RFID.

Prada has made use of RFID to allow customers to view fashion shows where models wear apparels chosen and tracked by them. Wynn Las Vegas has also utilized an RFID based tracking system to fight fraud and to allow guests easy access to house credit. The idea of using RFID technology for tracking human activities is also quite common.

Future Trends

At present, the price of RFID tags is quite high. Blecker and George listed a number of challenges, namely, technology, standard, patent, cost, infrastructure, and return on investment that may affect the world wide adoption of RFID (301).

It is foreseeable that in the near future, RFID will outweigh other similar technologies such as bar code to become the sole technology for object identification. As envisioned by some researchers, RFID will become so omnipresent in the future to such an extent that cashiers will not be needed. Customers will be automatically charged when they purchase goods affixed with RFID tags.

Currently, RFID technology is still unable to address problems related to location privacy, corporate espionage, denial of service, and spoofing.

Moreover, RFID is also subject to sniffing, tracking, replay attacks, buffer overflow, code insertion, and SQL injection. As more and more companies embrace the use of RFID for automation of supply chain processes, security related to RFID applications will continue to gain recognition across the world.

It is forecasted that more specific security measures dedicated to RFID will be introduced in the near future to support business operations. With RFID, analyzing consumer behavior will become a lot easier. Nevertheless, it is necessary to understand the attitude of customers towards such new schemes because some people may regard it as infringement of privacy.

Therefore, before real implementation of an RFID system, it is necessary to carry out a detailed investigation of the user acceptance of RFID devices for tracking consumer behavior. Without full support from customers, there will be strong opposition which in the end will lead to failed implementations.

Conclusion

There is no denying the fact that RFID has a great potential to transform business operations in the modern world. Although some scholars are convinced that RFID technology should be limited to supply chain management, there are many other areas in the current business setup where RFID can be useful.

In future, it is foreseeable that security and privacy will remain the major concern for worldwide adoption of RFID. To attract and retain customers, it is necessary for business enterprises to work towards improving the security of their systems. With improved security, customers are assured of confidentiality and privacy.

With a further decline of RFID chip prices, it is believed that the utilization of RFID for various types of novel business applications will become more ubiquitous. Even small and medium-sized enterprises will be able to afford such technology in future. This goes on to show that large scale adoption of the RFID technology will revolutionize the commercial world.

Works Cited

Blecker, Thorsten, and George Huang. RFID in Operations and Supply Chain Management: Research and Applications, Berlin: Erich Schmidt Verlag GmbH, 2008. Print.

Hunt, Daniel, Albert Puglia and Mike Puglia. RFID: A Guide to Radio Frequency Identification, Hoboken, NJ: John Wiley & Sons, 2007. Print.

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