Radio Frequency Identification (RFID) uses radio waves to track the movement of goods through the Supply Chain system. The identity of an object is captured with a unique serial number that is transmitted wirelessly to a computer system. Small businesses are facing RFID implementation barriers. The barriers range from the perspective of the consumer-goods manufacturers and retail organizations. We propose implementing RFID technology using cloud computing framework to alleviate or reduce the implementation cost which is the most prevalent barrier.
This technology is being adopted widely for various applications worldwide and at the same time the technology has certain issues that are hindering its implementation in many organizations as well as its exponential growth. Secondly, expanded deployments of RFID systems in big organizations are taking place because of adoption of the RFID technology. As a result, more infrastructure (hardware and software), cost, services, and storage facilities are required. Additional barriers range from a lack of industry-wide standards, understanding of total costs, adoption of appropriate/necessary infrastructures to consumer privacy violation concerns. All leave organizations and consumers weary of the benefits and uses of the technology.
RFID can provide competitive advantage to retail organizations, yet purchasing such new technology, with the infrastructure costs of building out an RFID system, is a big investment, and in most cases, too large of a barrier to overcome (Gluckman, 2005). In order for retail organizations to implement a fully operating RFID system, they will need such technology components as tags and antennas, readers and networks, and networked databases. A typical mistake made by retail companies is the assumption that the acquisition of the technology is the main expense. As implementation standards and best practices remain in the early stages, the largest component of the total cost of implementing a complete RFID system in-house is professional services. These services include consulting services, architecture design, platform selection, integration, and installation and management. In fact according to The Yankee Group, the initial services component of an RFID system is 80% of the total cost of implementation (Gluckman, 2005). More specifically, small and mid-size organizations are disadvantaged significantly due to these barriers.
With our proposed cloud computing RFID implementation, the retail organizations, specifically the smaller and midsize companies, would not need to establish all these new IT infrastructures mentioned above in order to implement RFID because they are very expensive. Many smaller and midsize companies cannot afford them thence they are hindered to deploy the RFID technology in their organizations. Cloud computing has come for their rescue.
Cloud computing refers to computational resources that are accessible as on-demand services over the network. It may be broadly categorized as software-as-a-service, platform-as-a-service, and infrastructure-as-a-service (Napper and Bientinesi, 2009). The software-as-a-service (SaaS) which is also known as application-as-a-service includes the process of any application being delivered over the platform of the web to an end user, typically leveraging the application through a browser. It is based on the traditional timesharing model where many users shared one application and one computer (Dabas and Gupta, 2010). It leads to cost savings and risk reduction since a big amount of capital expenditures are eliminated which were required in the deployment of infrastructure or large-scale applications in-house (Napper and Bientinesi, 2009).
In this paper we outline the various barriers in implementing RFID technologies, and propose the implementation of RFID using Cloud Computing technology to mitigate the challenges posed by these barriers.
An RFID tag is a small and inexpensive microchip (like the size of a grain of salt) that emits an identifier in response to a query from a nearby reader. Once it is attached to an object, the small radio can send information specifically about the object to a computer network. The Electronic Product Code (EPC) is a unique number that identifies a specific item in the supply chain and it is this EPC that is stored on an RFID tag. Once the EPC is retrieved from the tag, it can be associated with dynamic data such as from where an item originated or the date of its production or it?s current location.
In 2003, Wal-Mart made it mandatory for its top 100 suppliers to put RFID tags on all cases (Juels, et al, 2003) and pallets that roll out of the manufacturer?s base. The Department of Defense has ordered its suppliers to make all the supplies RFID enabled and Gillette has ordered at least 500 million of these. Michelin, which manufactures 80,000 tires a day, is planning to put RFID tags in each of its tires (Juels, et al, 2003). There is no law requiring a label indicating that an RFID chip is in a product; every item purchased with an RFID tag is “numbered, identified, catalogued and tracked.”
Since many organizations require their vendors to supply RFID tagged products, the competitive race began so much that small and medium size companies could not cope or afford the cost and challenges of implementing full-fledged system of RFID. Thence, we propose that RFID technology be hosted in the cloud so as to enable small and medium size companies to subscribe to on-demand services or pay-as-you-go which will not be cost or capital intensive. This will help these companies to survive instead of being crunched.
BENEFITS OF RFID TECHNOLOGY IN BUSINESSES
Due to its speed, range and durability, RFID has made a place for itself in high-end technologies and businesses, while the relatively cheaper and easy to use barcode is widely used in everyday applications, specifically by small and medium enterprise (SMEs). There are no tight controls on where an RFID tag should be positioned. Unlike barcode labels, which need to be read automatically and must adhere to standard positioning, the only requirement for the RFID tag is that it must be within the field of the reader and not blocked by metals or water. Additionally, the reader can read numerous tags at the same time. RFID tags provide robustness and security for asset, document and software tracking, but it doesn?t have to stop there.
Companies are increasingly realizing the potential for RFID technology to be used in patient and people tracking, within the supply chain, in retail and in manufacturing; when used for tracking assets, RFID can greatly reduce the loss or misplacement of goods, minimize shrinkage and provide additional security for tagged items. Moreover, E pedigree, pharmaceutical, event ticketing and airline baggage tagging will also see business benefits.
Many organizations such as the U.S. Department of Defense, Toyota, Pfizer, Wal-Mart and a number of retail stores currently utilize RFID systems as part of their supply chain processes. Wal-Mart, in particular is often highlighted as an exemplary in the industry for their successful deployment of RFID technology in the early 2000?s.
RFID technology has significantly contributed to Wal-Mart?s low cost strategy by allowing them to create an inventory control system that is highly efficient. Another retailer that has experienced a return on investment with respect to implementing an RFID system is American Apparel, a clothing retail chain headquartered in Los Angeles, CA. American Apparel boutiques regularly display over 26,000 Stock-Keeping Units (SKUs) which limits them to displaying a single article of clothing in a given color or style on the sales floor at a time. The use of RFID tags on all items coupled with handheld readers allows employees to determine which items are on the sales floor versus the stock room. This system has reduced the time that was traditionally spent dealing with inventory by more than 90%.