Academic journal article Journal of Economic and Social Studies

RFID Technology in Business Systems and Supply Chain Management

Academic journal article Journal of Economic and Social Studies

RFID Technology in Business Systems and Supply Chain Management

Article excerpt


Technological innovations and their consequences are becoming indispensable parts of our daily lives. RFID, as one of these innovations, is a system that provides easy, secure and quick data entry, storage and transmission. It is used in many places such as shops, stores, hospitals, pharmaceuticals companies, logistic services etc. where real time data should be used (Brown, 2007, Miles et al., 2008). At its core, RFID is an enabling technology that has the potential to help retailers provide the right product at the right place at the right time, thus maximizing sales and profits. It builds a basis for coding, storage and transmission systems. It improves the data management capabilities and resolves the problems caused by lack of information. It provides contactless and wireless technology to identify objects that are uniquely manufactured, shipped and sold, such as container, pallet, case and item, thus it provides the building blocks for increased visibility throughout the supply chain. It is important in improving efficiency and visibility, cutting costs, delivering better asset utilization, producing higher quality goods, reducing shrinkage and counterfeiting, and increasing sales by reducing out-of-stocks (Angeles, 2005, Brazeal, 2009). It helps in gathering data and improves the security of information about the objects. RFID has vast applications as it is relevant to any organization engaged in the production, movement or sale of goods. This technology includes retailers, distributors, logistics service providers, manufacturers and their suppliers, hospitals, pharmaceuticals companies, and the entire supply chain applications.

RFID is an emerging technology consisting of data gathering, distribution, and management systems that has the ability to identify or scan information with increased speed and accuracy (Ahson & Ilyas, 2008). Although implementing RFID technology is a complicated process, the right planning and development of an RFID strategy can offer important advantages to business systems for efficient and successful supply chain management. While RFID technology has received a fair amount of attention in media recently, many are still unfamiliar with RFID and the benefits it can offer. In the face of the need for clear, extensive information about RFID and its benefits, this paper presents the opportunities offered by the technology for any organization involved in the production, management, or sale of goods.

RFID Systems and System Components

RFID is a wireless automatic identification (Auto-ID) and data capturing technology that gives the opportunity to monitor objects by using a tag that carries information. In RFID systems, there are different software and hardware requirements for data gathering and management. One of the most important components of RFID systems is tag. A tag can be identified as a microchip that has an electronic circuit and antenna on it. For the purpose of tracking the movement of goods, tags can be placed anywhere, such as containers, pallets, materials handling equipment, cases or even on individual products. Tags can be classified as passive (no battery), active (with battery) or semi-passive according to their power supply (Khan et al., 2009, Klaus, 2010). While active tags use an energy source that is integrated to a tag physically, passive tags obtain this energy from the readers in the communication field. Today, semi-passive tags that have some properties of both active and passive tags can be also used. The other component of RFID is reader which connects the tags to external world. Although readers can be classified as portable and mobile (Klaus, 2010), all of them consist of same components. In every reader, there are some parts that read tags, gather data and handle communication. While the reader antenna receives/sends the radio waves, it builds the signal and decrypts the signal which is sent from tags.

There are eight main components for building RFID systems in a supply chain management:

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