Present day retail environment has grown both in competition and margin of profit making. Therefore, there is a need for retailers in this environment to remain at par with the environment. They need to heighten their level of real-time visibility of inventory in their supply chain as well as the retail shelf. Most importantly, there is a need to track products accurately from the manufacturers while aligning goods with backroom replenishment. The processes are critical in offering a solution and improving operational concerns such as costs related to inventory, safety stock levels, and cycle stock.
The greatest problem that exists today in the retail industry is how to successful manage inbound and outbound operations. Furthermore, stock and out of stock inventory is a prevalent problem. Since they have recognized what their problem is, retailers must come up with a way to streamline their business processes and operations to improve efficiency. The primary objective should target increased sales and revenue. Major retailers such as Wal-Mart in the United States, Tesco in the United Kingdom, and Metro in Germany are looking at several areas in their supply chain and store level. What they have realized is that integration of RFID into their operations can move them with the speed at which retail environment is moving. Furthermore, RFID integration could provide highly profitable opportunities to make significant gains in their retail efficiency and accuracy while improving their inventory management (Mohsen, 2012)
Although there are problems and challenges in the current retail environment, the most prevalent that needs a solution by RFID is inventory management. Inventory is a movement of goods in the supply chain. RFID printers, mobile computers, and labels are what any supply chain needs to make an end to end visibility of items movement throughout the chain. However, it needs to start from the manufacturer through pallet, case, and item labeling. Their benefit is increased accuracy and consistency of shipment thereby reducing item displacement and shrinking of inventory.
Overview of RFID
Basics of RFID
RFID is an acronym standing for Radio Frequency Identification. The technology did not have a specific moment in its history. It developed by using various other technologies and research. It had to start with a better understanding of electromagnetic energy in early years of the 1800s that had been used to develop radio communications and radar systems. The radar system could read and receive more signals simultaneously. It was applied by the British military during the Second World War to identify enemy planes. British military application was the first instance in history where RFID get used. RFID tags were made smaller and cheaper with the invention of the transistor in 1947. It is the reason the tags are becoming cheaper every year (Rida, Yang, & Tentzeris, 2010)
RFID technology has continued to evolve over time. RFID refers to a small electronic gadget that has a chip and antenna. It is also the application of radio waves in reading and capturing information which gets stored in a tag that get attached to an object. The tag is read up to some distance away and does not require being within direct line of the reader to enable tracking. Therefore, besides RFID being an electronic device, it is also that system of wireless transmission through radio waves. RFID technology is contactless, and it has three components: a tag, a reader, and a computer system whose function is to host the generated information. The tag gets referred to as a transponder, smart tag, smart label, or radio barcode. It is a very small in size. Tags come in different sizes and shapes but depending on the field of application. How does the tag function? To understand the working behind a tag let us understand this: the reading unit generates an electromagnetic field. The electromagnetic induces current in the antenna of the tag. The current powers the chip if only the tags are passive. The current goes on to charging the condenser to generate more power and ensure uninterrupted supply. Immediately the tag has been activated; the reading unit sends a command requesting for the information regarding the item from the tags. The tag cooperates and sends either the serial number or the information that is needed.
RFID is a state of the art and sophisticated modern technology. We have seen that it applies electromagnetic to identify objects. The tags are all useful in tracking, tracing, and identification of items. The technology has been trending in the retail industry. The driving force behind growth and trending is the need for an efficient and successful inventory system. The effects of an efficient inventory system to the whole business have not been considered an important component until recently. RFID technology will ensure that there is a controlled flow of items from the warehouse to the final consumer and that the items and the customer can easily get traced.
RFID has two main types of tags: active tags and passive tags. Passive tags have an inbuilt power source and information flow is two-way, i.e. from the tag into the server and then back to the tag. They have a shorter range in comparison to the active tags. Their main function is data transmission from between the RFID component and the server. On the other hand, active tags have an internal power source that powers ICs while generating outgoing signals. They have a longer range and larger memory than passive tags. They have as small size as a coin. They have a range that covers up to 30 feet radius distance with a battery power then runs up to a decade. They are suitable for tracking high valued items and where there is a requirement of intelligence.
Advances in RFID technology
The most notable advance in the field of RFID technology is using high octane fuel to power the acceptance and growth of the RFID technology. The ongoing research and innovation aims at developing powerful RFID systems that have more capabilities that the traditional ones that have been in use. A specific ongoing innovation is to manufacture tags that are more accurate and have wider range coverage than. The tags will not have limitations such as metals and liquids or certain environments with extreme weather conditions such as humidity and high temperatures. The current tags have a limitation to such environmental factors. The chips in development will also not have chips. It will have subsequent result improvement on the physical limitations of the waves. This technological tag improvement and the elimination of integrated circuitry will have a positive effect on the cost of the tags. The main advantage of the chipless tags is that they will easily get used to metals and liquids. Furthermore, they will easily get incorporated into items such as paper. It will result in more flexibility and functionality (Hunt, Puglia, & Puglia, 2007)
A further notable innovation is the combination of the RFID tags with various sensors. The improvement is to enhance information reporting together with the data picked by the sensors. The improvement will out do the currently used tags whose information reporting happens several times. For example; a tag embedded on a can of ice cream will report on the temperature of the ice cream for the whole day. It is the information that is urgently needed to determine whether the ice cream got kept in a recommended temperature. In the future, the retail stores will enable customers to scan their items for themselves.
Benefits of RFID technology in retail industry
The reasons why RFID technology prevails over barcode readers are the benefits associated with the technology. The benefits have got outlined by both the customers and retail business management. The benefits are known to have improved inventory processes significantly. There are both retailers and consumer benefits (Ferror, 2009)
A retailer is bound to have real-time inventory information with the application of RFID. The information will get usefulness in preventing stock-outs and locate stock within a store thereby avoiding inventory shrinkage.
Application of RFID technology eliminates practically the need for human stock checking. It will realize labor reductions in the areas of retail operations, receiving, stocking, and physical counting.
RFID will have prevented shrink, theft, and write-offs. Shrinkage is inaccurate inventory counts resulting from theft or misplacement. RFID will alert management to any illegal movement of goods or instances of misplacement within the store while providing automatic real-time accurate inventory records.
The integration of RFID will give retailers new marketing opportunities. It will get enabled by tracking of customers’ purchases before leaving the shop. Retailers will have ready information that could get used cross-selling other related products.
Consumers will save more due to a decrease of costs in the supply chain. RFID lead manufacturers are bettering match up supply with demand. They will produce what will sell while retailers will not overstock (Eckfeldt, 2005)
RFID will also get used in distinguishing generic products from counterfeits. It is a primary consumer benefit given that counterfeits can potentially harm the customers. Currently, consumers have no fool proof method.
RFID aims at improving reliable and faster product recall together with proved food safety. Significant death reduction and safety will get realized.
Disadvantages of RFID technology
The current hindrance to RFID implementation is the cost. Its cost is very high compared to the return on investment. There is also no prove of reliability once implemented.
Current tags are easily affected by extreme weather conditions such as high humidity and high temperatures. Furthermore, they are not resistant to metal surfaces and liquids.
There is radio waves interference when the technology gets used near a mobile phone and other electronics. The result is a distortion of readings.
RFID tags a have a limitation to a range of distance. They can only read tags that are within a particular range of distance.
There is the concern regarding data compromise. Data transmission through RFID does not get fully protected.
Security concerns with the use of RFID systems
RFID technology does not operate in isolation. It has got acceptance as a state of the art technology that any retail chain needs to improve efficiency. It has privacy issues that are as many as the benefits of use. Most of the privacy issues have gotten compounded by practical security risks in the system deployment. Exploration of real-world security issues establishes possible risks related to RFID system implementation. Some of the security issues in this research are the RFID devices tampering and cloning as well as inefficient cryptographic methods of protecting the devices.
It is not disputable that RFID technology helps in inventory and smooth operation of retail chains. However, it is not suitable to offer security. The proposition here is the application of what is used to demonstrate the potentiality of issues in RFID technology security. There is a contested argument from scholars who say that RFID system security is only required depending on what the tags are transmitting. Valuable information is what will only require security according to them. There are several ways to managing security issues. One of the ways is to limit on technology. It will involve data restrictions by applying a specific identification and directing the rest of data into database systems. However, there are technicalities in the light of RFID systems but specifically tag collision and tag failures. The substantial security risks associated with RFID systems are as the results of the technicalities mentioned above. The risks come in several ways and forms as:
There is lacking internationally accepted standard protocols that will go along RFID systems. It is an ongoing process towards achieving the milestone. But until the standards have get discovered, the systems will continue being vulnerable to reverse engineering. It will result in easy intrusion and breaking in.
The tracking of employees and customers in the retail chain using RFID technology systems is a breach and threat of their privacy and secrecy. The tags get attached inside the clothes of the individuals with no prior information about it.
RFID tags get easily hijacked. The security issue relating to tag hijacking is the fact that the physical tag may not have any relation with the holder of the tag. Hijacking is a cause of a significant security risk in the application of the RFID technology as a mechanism for security. The reason behind this is that the radio waves are the need regardless of who has the tag.
The data in storage in the RFID devices is vulnerable to tampering and corruption. It will always get done by the illegitimate holder of the tag or any intruder who has hijacked the tag. It should get noted that RFID technology is wireless and, therefore, at risk of interception by a third party if there are no intact mechanisms of signal security.
The most dominant security issue with the RFID technology system is the poor encryption. The chips have a limitation that makes it difficult for integration of complex encryption algorithms for optimum security purpose. The encryption related limitations have resulted to some of the above security issues as cloning, tampering, corruption, and hijacking.
Impact of RFID technology system implementation
Implementation has another name that is as execution. It is simply the process of putting an idea or a plan into effect. It is a phase of RFID system that follows adoption. Implementation is beyond installation and commissioning of the software or the hardware or both. The phase will involve change management, training of the users, and system deployment. Implementation involves a series of tasks that are important since they have a direct impact on whether the system will succeed or fail. It is not necessarily that a changeover or overhaul of the current system will occur. Both old and the new system can run in parallel till when the new system will have the capability to take over.
Deployment is all about installation and commissioning of the system and development of any required procedures. The tag should get properly embedded in the body of objects. The way in which the tag has been attached affect readability significantly. Installers need not get confused what requires coming first. Hardware needs the first installation after which software configuration will follow. Middleware is a requirement to the manageability of the reader to read and write data on the tag. The database needs changes to accommodate and accept data from the RFID system. Security system needs setting at this stage.
Policies and procedures are required to support the system. Therefore, they should come next. The policies existing in the current retail industry platform will require modification to enable facilitation of system adoption. Furthermore, management practices will need to get transformed. It is obvious there will arise some resistance to the system. Management has a duty in dealing with such issues. Other changes might be a division of labors and frequent communication with all stakeholders.
All staff in the inventory of supply chain will undergo a mandatory training to familiarize with operations of the new system or any other information that is important. A comprehensive and detailed introduction to the system will get carried out according system operation so as to remove fears from the trainees. Practical training is also paramount to equip the trainees with hands-on skills on how to operate the new system. The training will have to incorporate safety measures and precautions. The management requirement here is to pay attention and evaluate users’ views and recommendations
Continuous improvement comes as the last phase of system implementation. People understood that the system was not fully perfect. It is the reason improvement should always take place. The improvements are a requirement to meet the demands of the retail environment. Improvements do not get done out of anywhere; it is out of data gathered out of monitoring and reviews of users’ feedback. The measure of system performance is the comparison between targets and current performance. Feedback should not only be collected from the users but also the stakeholders. It will help in identifying and analyzing vulnerabilities in the whole system.
The paper has presented the application of RFID systems in the retail industry. There is no anticipation that RFID technology will get widely adopted at the unit level within the next decade. The argument has a basis on the model of parallel implementation of RFID and barcode reader systems. Inadequate software solutions and high costs of the tag are the main issues that will slow the rate at which adoption will happen. Since the technology provides costs savings in the supply chain and has the potential for speeding up experience of the consumers we believe that RFID will evolve sooner
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Hunt, V. D., Puglia, A., & Puglia, M. (2007). RFID: A Guide to Radio Frequency Identification. Hoboken: John Wiley & Sons, Inc.
Mohsen, A. (2012). Critical Success Factors and Challenges of Implementing RFID in Supply Chain Management. Journal of Supply Chain and Operation Management , 144-167.
Rida, A., Yang, L., & Tentzeris, M. (2010). RFID-Enabled Sensor Design and Applications. Norwood: Artech House.
Sherry Roberts is the author of this paper. A senior editor at MeldaResearch.Com in pre written essays online if you need a similar paper you can place your order from custom nursing essay.