Effectiveness and Efficiency of RFID in Supply Chain Management
Read this article. Sixteen different types of supply chains are presented in Figure 2. Select one type from the High Complex / High Business Impact quadrant, what are some benefits and challenges associated with it?
Strategic Values, Challenges, and Recommendations for RFID Implementation
There
are a number of issues concerning the future of RFID with regard to the
processes. These issues are related to complexity of process
implementation, integration and interdependence of processes, and
security of processes. Further research needs to be conducted to figure
out how to enhance the range of RFID signings and figure out how to cut
back on the interference issues. Furthermore, the solutions providers
and consultants need to figure out how new smart labels, barcodes, and
RFID equipment can work with customers' existing business practices. One of the most challenging task facing companies adopting RFID
technology is to properly integrate it with other information systems,
both internally and externally, in their supply chain, and accordingly
redesign their business processes that create strategic advantage. For
example, given the capability of RFID in generating significant
voluminous data compared to barcode technology, it would require new
data warehousing systems to intelligently parse the usable data from the
RFID data stream to ensure appropriate data processing and effective
data mining at an economic storage cost. In particular, when a company
extends its supply chain to upstream suppliers and downstream customers,
their external integration needs to gain in capacity planning and in
efficiency.
Security, privacy and integrity of the RFID system
play a significant role in the type of supply chain application. In
particular, as a wireless technology, RFID poses some potential security
concerns to users when the communication between the tags and the
reader is exposed to eavesdropping and traffic analysis. Security
concerns may arise regarding the compromise of data during wireless
transmission, storage of data, and physical security of storage site.
Supply chain applications may be particularly vulnerable to security
risk because a variety of external entities may have read access to the
tags or related databases. For instance, the world's three largest
seaport operators started to collaborate and deploy automated tracking,
RFID-based detection and security technology for containers entering US
ports. Theft prevention is another by-product of RFID.
Quantification of such values has been researched by Lee and WhangThus, while this wireless remote access is significantly beneficial, it
can also create security risks if proper controls are not in place.
RFID vendors have addressed some of these security issues through
encrypting data transfers, blocking data transmissions through jamming,
employing varying querying protocols, and blocker tag technique. A
number of proposed RFID privacy-protection schemes are classified based
on the new functionality they implement in RFID technology. They
range from adding only memory to adding lightweight circuits and each
involves a trade-off between the cost of the tag and the value of
privacy protection. The EPC global standard specifies that tags must be
equipped with at least one nullification function, kill command, as a
way to address public opposition by disabling the functionality of the
tag after consumers purchase a product. It involves a high degree of
consumer privacy protection at negligible cost but human error is always
a possibilityPrivacy has been issue with RFID tags. Other
privacy-protection schemes generally reflect two main approaches:
normal-tag and smart-tag. The normal-tag approach protects individual
consumer privacy without having to modify the existing tag or cost the
user organization more money. Smart tags are equipped with additional
components such as re writable memory, basic logic circuits, hash
function units, and common-key/public-key encryption units
Another
challenge in adopting RFID technology in supply chain is multiple and
sometimes conflicting standards that may hinder the technology's
deployment and reduce its anticipated benefits. For example, while
EPC global has developed a series of RFID application specifications and
manages standardization for encoding information on RFID tags within the
US, ISO has developed standards to address issues such as the "Generic
Parameters for the Air interface for Globally Accepted Frequencies" and
the "Parameters for the Air Interface Communications" at different
operating. Companies with supply chain extended to the
global market may force to choose between standards and develop
applications that might work under one standard and not the other. In
this context, competing international standards between ISO and
EPC global for deploying their standards is a concern. If various
counties adopt significantly divergent RFID technologies, this would
undermine interoperability of RFID and the software applications in
tracking goods through the supply chain. In particular in global supply
chain, this may encourage countries to mandate adoption of certain
standards to protect internal market and to gain short-term economic
gains rather than for technical reason. Thus, in order to enable the
RFID technology in global supply chain, international interoperability
of tags and readers and international spectrum allocation to facilitate
international operability of technology needs to be addressed. In this
context, it is critical that international regulatory processes remain
transparent and nondiscriminatory in supporting RFID standards to ensure
that these standards are based on technical merit and support
interoperability. This will ensure that RFID technology will reach its
potential economies of scale in the global supply chain.