Why are radio frequency identification (RFID) and wireless sensor

networks valuable for business?

1. What is RFID and Wireless sensor network?
RFID, short for Radio Frequency Identification and wireless sensor network are rapidly
evolving technology that can dramatically improve operational efficiencies and customer
service. They will fundamentally transform the way information about products, equipment,
animals and even people is gathered and analysed in real time, providing new business
opportunities.
Radio frequency identification (RFID) is a data collection system based on tiny microchips
attached to a box, pallet or individual item that communicate with other devices using radio
waves. Device readers capture data from the tags and, in some cases, write to them as well.
Software then collects, organizes and distributes the data. The combination of these chips,
sensors and software technology vastly improves supply chain operations and is increasingly
providing substantial business benefits in other venues.
Wal-Mart Stores, the U.S. Department of Defence, the U.S. Food and Drug Administration,
the European Union and other companies or government agencies are adopting the RFID
technologies in their business operational role. However, these systems are doing much more
than just improving the supply chain operations of manufacturers and retailers or enabling
regulatory compliance.

2. Business Operational Scenarios of RFID
Based on the experience of manufacturers, health care providers, retailers and others that
have pioneered the use of RFID, here are a selection of operational scenarios where RFID can
deliver value in a short time:
The manufacturing floor: RFID can help track work-in-process and provide predictive
analytics and an early warning of pending system failure. It also can be used to track reusable
assets such as rolling cages, pallets, racks and ingredient vessels.
Distribution centres: RFID can impact both sending and receiving of goods. Automating
receiving reduces the amount of labour needed to manually check-in incoming items as well
as the time and energy spent resolving proof of delivery issues. RFID can also confirm that
outgoing shipments are accurate, complete and loaded on the correct truck. Because RFID
tracks the movement of goods/assets within a facility and beyond it also can help combat
theft and shrinkage.
Shipping: With products in transit, RFID can help protect against theft, diversion and
tampering. When combined with environmental sensors to monitor ambient conditions like
temperature, light, humidity, radiation, shock and vibration, the technology can also provide a
warning if environmental parameters are exceeded and help pinpoint the time/place where the
problem occurred. With a record of product movement, RFID can support e-pedigree record
keeping that documents the movement of products like pharmaceuticals through the supply
chain, thereby helping authenticate product and identify counterfeit goods. Documenting
product movement makes it easier to resolve discrepancies between what a vendor ships and
what a customer receives, thus providing a powerful deductions management tool and
preventing fines for late or incomplete shipments.
Retail supply chain: RFID can provide the visibility needed to prevent out-of-stock
situations throughout the supply chain, but particularly in the critical geography between the
stores loading dock and its stock room. The system will be able to identify the location of
goods outside of the stock room and can help prevent lost goods which were really just
misplaced. The technology can support promotions management, ensuring product is
delivered in a timely manner and moves to the sales floor to meet demand.
Vendor-managed inventory: The improved visibility RFID provides into product
movement gives vendors the information they need to automatically replenish fast-moving
items or take steps to boost sales of slow-moving product.
Animal tracking: RFID tags are commonly implanted into household pets so they can be
identified if they are lost. Livestock also is being tagged to provide the ability to track an
animal from birth to the consumers table. This capability has taken on new importance due
to rising concerns about mad cow disease or other ailments.
Smart shelves and cabinets: RFID opens the door to smart items that can communicate with
other systems and generate alerts to problems. For example, a smart shelf on a sales floor can
provide an alert when its time to restock or of a potential shoplifting situation if an unusual
number of products are removed simultaneously. In hospital settings, an RFID-equipped drug
cabinet can provide better control of access and inventory and provide alerts when supplies
run low.
Smart appliances: An RFID-equipped microwave oven could communicate with the
package and set itself up to cook/warm the food at optimal settings. RFID-enabling a
medicine cabinet could provide the patient with alerts about when to take a medication,
calculate when its time to order a refill and analyse whether a new prescription will pose an
interaction problem with existing medications.
Examples of the implementation of RFID include:
Logistics & Tracking
Real Time Item Location/ Item Visibility & Status
Anti-Theft/Tamper evidence
Authentication
Asset Tracking
Hospital Equipment
Laundry & Library systems
Reusable Assets
Personal Identification
Access Control
Animal Tagging
Car Immobilisers
Payment Systems
Road Toll
Electronic Tickets
Mass Transit Ticketing
Workflow Processes
Service/Maintenance Records
Remote Management
Mobile Data
Healthcare
Patient Operations
Drug Trials & Clinical Testing
3. Benefits of RFID
By analysing current practices and procedures RFID technology offers several advantages
over manual methods or other automatic identification technologies such as bar coding,
businesses in many industries hope to gain many new benefits. These include realizing
greater control over inventory, gathering more accurate production forecasting, reducing
losses from counterfeiting and theft and achieving more timely order fulfilment. Some
important benefits that make the RFID more valuable in business are as follows:
Improved Productivity and Cost Avoidance: Identifying items by RFID involves less work
than using barcode scanning and other less automated ways. This leads to greater process
effectiveness in many tasks such as receiving and putting away, picking and shipping goods
where the time required and cost of identifying items by RFID is substantially less than other
methods.
Decreased Cycle Time and Taking Costs Out: RFID scanning is not a serial process, like
traditional Barcode scanning, so the business can perform identical tasks much more quickly.
This means processes moving goods through a supply chain are more efficient leading to a
reduction in the need for larger inventories.
Reduced Rework: As RFID scanning has a greater first time pass accuracy this reduces the
number of errors that are generated and retries needed.
Reduced Business Risk & Control of Assets: RFID tagging enables better audit and asset
control. The ability to track and trace items better means assets can be located more easily.
The opportunity for enhanced data collection leads to increased accuracy of record keeping
and improved asset maintenance. Regulatory compliance can be achieved more effectively.
Improved Security and Service: Being able to validate information relating to an item
enables increased security. This individual identification contributes to more effective access
control, reductions in shrinkage and other losses and the ability to provide fast and efficient
services at the point of need. Ability to authenticate information can prevent activities like
counterfeiting and fraud.
Improved Utilisation of Resources: Information obtained by RFID scanning can be used to
improve planning. Processes can be improved, time can be saved, assets can be utilised
better.
Increased Revenues: By eliminating uncertainty companies will suffer less out of stock
situations and obtain greater item availability, reducing lost sales and increasing choice
leading to more sales.
Exception Management: RFID enables processes and procedures to be measured better.
Until a process can be measured accurately it often cant be improved. Decisions that are
based on limited, inaccurate, out-of-date information are often poor decisions. The
contribution information captured by RFID offers to IT applications will allow managers in
companies to be alerted when compensatory business decisions need to be taken.