BUS606: Operations and Supply Chain Management

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.