THE RFID ADVANTAGE IN THE SUPPLY CHAIN
RFID technology basics & supply chain benefits across key industries
INTRODUCTION TO THE RFID TECHNOLOGY
RFID forms part of technologies classified under Automatic Identification Systems. There are several types of Auto Identification Systems used in industries such as barcodes, smart cards, Optical character recognition (OCR) and RFID. Each of these has benefits/issues of their own:
• Barcodes: These are very cheap and probably the most widely used Automatic Identification System globally. However, one of the issues is that the product has to be in the line of sight of the reader.
• OCR: OCR is capable of storing huge amount of information compared to the barcodes. However they are very expensive to use, probably one of the reasons why it has found very limited audience.
• Smart Cards: These are very secure and used the world over for storing secure information and making transactions. Readers are very expensive and malfunction issues keep cropping. Also this being contact-based detection there is issues of corrosion and wear & tear.
• RFID: RFID is very similar to smart cards, the only difference being this is a contactless transfer of information between a tag and a reader. Also compared to barcodes, these RFIDs need not be in the line of sight of the readers. A reader automatically detects a tag if the tag is within its range.
RFID is perhaps the latest addition to the Auto Identification landscape which promises to revolutionize the way we track and manage our inventory. Contrary to popular perception, RFID (Radio Frequency Identification) is not a specific technology that is used. RFID encompasses all radio enabled tracking devices. Globally the use and hype of RFID started in the last decade. US DoD and Wal-Mart are the two biggest contributors (directly/indirectly) to the development of RFIDs. Historically the main reason for its extended use has been it’s out of line-of-sight functionality. Even today that is the main reason that makes it more attractive in the marketplace. Wal-Mart claims around 6% of supply chain cost savings due to the implementation of RFIDs. Retail, defense, pharmaceutical and logistics are some of the main areas where the use of RFIDs presents a favorable ROI.
RFID ARCHITECTURE
The two basic parts of a RFID network are the tags and the readers. Each RFID tag (also known as transponder) contains an Integrated Circuit (IC) chip, an antenna (typically a coil of copper wires) and a packaging. A basic reader, also known as transceiver or interrogator, contains a decoder (to decode the code stored in a RFID tag) and an antenna (for transmitting and receiving radio waves). Below is a very basic level representation of the RFID setup.
Figure 1: Basic RFID Architecture