RFID – The next revolution in

SCM
Group 9
PGP/12/248 MURALIKRISHNA BATCHALA
PGP/12/260 BADRINATH GM
PGP/12/261 SAURABH KUMAR
PGP/12/262 PIRAMANAYAGAM M.
PGP/12/265 RICHIE GIFTSON PAUL J
Introduction
Technique for electronic labeling and
identification
Considered as the next stage of Barcode
Usage in varied sectors
Electronic toll pricing
RFID car keys for automobiles to detect theft
European central bank uses RFID in bank
notes to detect counterfeit
Of course used in SCM
Still in infancy when it comes to SCM
SCM termed as killer application for RFID
Used by Wal-Mart, P&G, Target, Home
depot, Gillette etc
What is RFID System?
Consist of RFID readers and tags
A microchip attached to an antenna and
embedded in product or put as label
RFID Vs Barcode
Line of sight not needed unlike barcodes
Ability to read it en masse
Read Only Vs Read/Write Vs Combination
Active Vs Passive RFID tags
Frequency bands determines the range of
operation
More the frequency, more is the cost of
readers and tags
MIT Auto-ID Centre
Goal of developing low-cost, open-standard
RFID for SCM
Split into two organizations
EPC Global – developing and administering
RFID
Auto-ID labs – Research and develop new
technologies
RFID infrastructure developed and known
as EPC network
Consist of
Electronic Product Code
Object Naming Service
Product markup language
Using EPC Network to locate
RFID benefits for SCM
Tracking Products
Manufacturing uses for closed loop tracking
of parts, components and subassemblies
Pallet level tracking can lead to efficient
consignment verification
Stacks of multiple pallets can be read at a
time
Automation and streamlining of SC process
can reduce cost
Pallet and case level tagging can result in
significant benefits at shipping, warehouse
and DCs
Ex – Dell, Ford and many CPGs
Tracking using RFID
Impetus for collaboration
Causes of SC inefficiency – lack of
collaboration and visibility
Remember Cisco case of inventory write off
Visibility can help identify sources of
variability and help reducing it
EPC provides real time information on
internet about the product's presence in SC
Improves critical areas such as demand
management, planning, forecasting and
order management
Automatic electronic sharing of data
speeds up workflows
Reduce Inventory shrinkage
Lower level of inventories – success mantra
for retailers
Stock lost due to shrinkage estimates to
1.7% of total annual sales
Consumer ends up paying higher for
compensating this loss
RFID can provide a security staff to curtail
the above
Security could be alerted if the product
leaves without billing
Inventory errors occurs as receiving errors
or as dead inventory
Dead Inventory – inventory that cannot be
located
Prevent Stock-Outs
Stock outs – KPI for a retailer
Loss of sale and customer dissatisfaction
Stock outs can occur mainly because of
Inaccurate forecasting – 47%
Shelf stocking policy, product in store but
cannot be located – 28%
The second point could be effectively
addressed using RFID
RFID could sense low amount of stock on
shelf and raise an alarm, instead of manual
tracking
Major benefit of RFID id preventing stock
Fair Pricing of Products
Most effective way to enhance profit
Dynamic Vs Differential pricing
Dynamic – market conditions determine
price
Differential – Different market segments
RFID provides timely demand and
inventory in SC provides efficient means to
price the product
Frequent price changes will be an effortless
task with RFID
Ex - Ford uses efficient revenue
management systems using hybrid
RFID case studies
Impediments to RFID in SCs
Lack of universal standards
Frequency spectrum mismatch
Standards from EPC global might solve this
High cost of tags and readers
Wal-Mart needs tags at rates less than a cent
Major obstacle for RFID adaptation
Absence of Application software
Extracting pertinent information from tags is
difficult
Many MIS do not have built in RFID
processing capabilities
Other factor – scattering by soda and liquid
detergents
Anonymity is a major concern
Thank You