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Greater Role Seen for RFID in Supply Chain

We will soon see radio frequency identification (RFID) playing an expanded role in the supply chain. One of the latest developments is the introduction of battery-assisted RFID tags that can be read up to 80 feet away. The distance reduces to about 15 feet if the tag is located on a human in the form of a badge.

When I read about this development, several applications came to mind. As far as the supply chain is concerned, we will see more RFID applications in the sales and marketing sectors, because of the obvious gains in proximity readings.

The battery-assisted cards are unique in that the battery is on only during the polling and read cycles. As soon as the reading is completed, the battery goes to sleep to conserve energy. With their increased reach and amplified signal, RFID cards can remain in a wallet or purse and be identified without owner or user intervention or knowledge. That is why I believe one of the strongest markets for these tags will be in store loyalty cards.

I have Office Depot, Best Buy, and Safeway cards that help me get discounts and earn rewards. I have to present the cards or give my phone number at the register to enjoy the benefits. When new cards come out with the battery-assisted RFID tags, the store will be able to identify me when I walk within 15 feet of a reader and track me inside or outside a building. With my card in my wallet, as soon as I enter a store with readers placed in the ceiling or in kiosks in the aisles, my shopping history will be recalled quickly, and a computer will know how to target me and help direct my buying decisions.

For instance, a reader somewhere near the register will send my name and last purchased items to a display facing the cashier, who will greet me with “Hello, Mr. Alexander. How are those new boots that you bought last Tuesday working out for you?” The cashier will then spin the display around for me to see. “By the way, these boots made by the same company are on sale today to our loyalty card members who have purchased from this company in the last 15 days. You will get 20 percent off the retail price if you buy within the 15-day period.” Because I liked my earlier purchase, my buying decision will be influenced by a completely customized offer.

Another in-store application may be a kiosk coupon dispenser that offers a voice greeting initiated by my loyalty card. If I'm standing in front of the coffee section, a voice could ask me if I would like to buy a pound of the same blended coffee as my last purchase — with a second pound at half price.

Point-of-sale displays will become much more effective with flat panel displays that customize themselves instantaneously while referencing the viewer's purchasing histories. RFID-enabled loyalty cards will become standard in the very near future. You will not be asked for proof of membership before checking out, and the discounts and rewards will be integrated automatically into the register totals.

I have given just a few examples of where we might see these new RFID applications. If you change the venue and include instant recognition, you can consider how many other semi-automated processes will become fully automated. Key hospital personnel could be located instantly. Students would not be able to wander the hallways and miss classes. Pets could be detected at property perimeters. When everything is tied into the Internet and time stamped, various overt and covert readers could be networked to track an individual's movement.

In the old setup, a person would have to walk very close to a reader to be sensed. With the extended range of battery-assisted tags and the ubiquitous deployment of low-cost readers, it would be possible to follow the human dots on a map in real-time. When these RFID or similar tags become standard issue for driver's licenses or a national ID card, start looking over your shoulder. Someone really will be following you.

42 comments on “Greater Role Seen for RFID in Supply Chain

  1. tweygant
    December 24, 2012

    Doug, the “Front of the house” uses for extended RFID you point out are the exact uses that will raise the greatest objections from the privacy advocates.

    I belive greater benifits will be gained in “Back of the house” uses. Exended RFID technology could allow for faster unloading and loding of product by increasing the read zone entering and exiting a dock and improving the quality of the reads of fast moving product.

    It could also allow reading of product tags through a trailer wall allowing a whole truck to be read leaving or entering the yard.

    Warehouse cycle counting and inventorying would also benifit by allowing an auditor to perform an inventory from the ground without assitance of lift equipment.

  2. Cryptoman
    December 24, 2012

    The battery operated (i.e. active) tags do extend the range of applications in RFID. However, because of the ease of access to user/consumer data, the advertisers will be bombarding us with more and more ridiculous promotions and sales that we are not interested in. I also agree that the privacy advocates will be furious when they see the true potential of active tags.

    As long as the applications stay within the supply chain, there will be no problem. However, if this extended range gets into our everyday life, it will bring more problems than good use in my opinion.

  3. dalexander
    December 24, 2012

    @Cryptoman…you are right. Of course there is no way that this technology will not be exploited by marketeers, spammers, and Homeland Security. Pandora's box has been opened and now we will continue to experience greater distortions of good technology gone bad through applications designed to invade our personal lives.

  4. dalexander
    December 24, 2012

    @All…does anybody know how or where to join a privacy advocacy group that has some real clout? I know there are individuals writing books, but who is making the big noises in Washington DC?

  5. Himanshugupta
    December 25, 2012

    Alexander, though it seems a bit futuristic but i will not bet that it will not happen in next 2-3 years as this will immensely be focused towards customer loyalty. What i think will happen is that there will be apps and programs that will integrate the technology with smartphones instead as they are ubiquitous. Moreever, data analytics companies will be looking like hungry crocodiles for this opportunity.

  6. Himanshugupta
    December 25, 2012

    @Cryptoman, though i agree with you that this is just another tool for advertisers to send more ads which in most cases are more spams than useful. But i am sure that with more advanced data analytics, companies will make themselves smarter and will not waste their resources but be more focussed on their targets. 

  7. dalexander
    December 25, 2012

    @Himanshugupta…Good point. This may reduce spamming if this becomes a ubiquitous practice. If my smartphone gets zapped with an email every time I walk by a reader, I may surrender my loyalty card. Coupons on the go. Yikes! I guess we will have to see where this moving train takes us.

  8. Taimoor Zubar
    December 25, 2012

    @Himanshugupta: Smartphone apps are already in the picture when it comes to targeted marketing. Companies are using their apps to give discounts to loyal customers and also sending them out different promotions. Meanwhile they're able to get feedback on different surveys and polls from the customers through the apps.

  9. Taimoor Zubar
    December 25, 2012

    Rather than annoying, I would find these targeted ads more useful. Instead of random ads advertising about products I may never use available at places I may never go to, these location-specific marketing will send me relevant ads that I can take advantage of. Of course people can always unsubscribe if they feel annoyed but I just feel this type of advertising will be more useful to most consumers.

  10. dalexander
    December 25, 2012

    @TaimoorZ…also a good point. I look at my recommendations on Amazon to see how close they get. Since it is based on history of purchases, I am targeted pretty well. It is a combination of push and pull marketing. They push one URL and I have the choice to scroll multiple pages. As long as I don't get one email per product, it might be OK.

  11. t.alex
    December 25, 2012

    In fact Apple's iphone Passbook app and ecosystem is trying to target this. Things such as boarding pass, loyalty cards are stored digitally in the phone and they have smart features such as when you walk near the store, the phone will notify you. Sounds great however this is only for iPhone users. I think adopting RFID for cards can bring in good benefits for users though privacy is of great concern here. How can they possibly turn off RIFD detection for their card?

  12. prabhakar_deosthali
    December 26, 2012

    I agree with the comments that smart phone apps are already coming up whereby the targeted ads, identity and all such things are implemented.

    In my opinion the real use of RFID tags is not for people and related applications but for those inventories lying in heaps and stacks in the warehouses, on the store racks .  RFID tags will help better management of inventory, stock taking, finding an item buried somewhere in the corner of a ware house and so on.

    Any innovation in the RFID should be aimed at making these tags smaller, cheaper, rugged and smarter for such inventory related applications.

    Trying to enter into personal information and targeted marketing may actually reduce the focus of using RFID tags as smartphones are anyway going to have these features as standard in the near future.

     

  13. Taimoor Zubar
    December 26, 2012

    @Douglas: I agree. Rather than having individual SMS alerts from each individual store as soon as you step inside a mall, you can have one alert which gives you details of all the offers and discounts applicable on all outlets. This would make life much easier I believe. Also, as you mentioned, it could tell you about what most people like you are buying so you have an idea of what items are popular.

  14. Taimoor Zubar
    December 26, 2012

    @t.alex: I think the next development in this area would be how to integrate RFID technology with the smartphone apps without having to rely on external RFID cards. Perhaps things like NFC technology or Bluetooth would come in handy here to control the process entirely through smartphones and not have any other RFID chips involved.

  15. dalexander
    December 26, 2012

    @t.alex, There is currently a case in the courts trying to resolve a privacy invasion claim filed by a student in a Texas school where the students , (4000) have been required to wear RFID badges as locators. The school says it in case of an emergency if the school gets locked down and also since the government subsidy is based upon attendance, the school wants to be able to find students who may not be in their seats but are on campus somewhere when attendance is taken. Another school in Maryland is using palm scanning as an accounting method for students who are buying their school lunches. The Texas case will be one worth following. The outcome will establish a legal precedent for other schools and public institutions.

  16. jmcfarland
    December 26, 2012

    @TaimoorZ NFC would not be able to achieve the applications discussed in the article because of its extremely limited read range. UHF RFID could work, though. There is a company in NYC that has built a loyalty program for stores based on UHF RFID. Brouha is the company name. Here is an article that talks more about what they are doing: http://www.rfidjournal.com/article/view/8943

  17. dalexander
    December 26, 2012

    @jmcfarland… I read the article and I think what is catchy about this particular RFID application is that the apartment/condo access cards are the same cards that double for customer loyalty. If the housing access section is secured from copy or read rights, then I can see where there would be no issues with security as far as the apartment access is concerned. Do you know if the housing access side is encrypted to avoid the possibility of a disloyal strore employee from lifting the access data for nefarious purposes?

  18. t.alex
    December 26, 2012

    @TaimoorZ,

    What is the advantage of integrating RFID chip into a smartphone?

  19. Taimoor Zubar
    December 27, 2012

    @t.alex: Integrating RFID chip with the smarphone would make lives easier for people as they won't have to carry the card and the phone all the time. Also, instead of carrying multiple RFID cards, you can have all the information integrated into that smartphone (assuming your smartphone is capable of writing information on the RFID chip). 

  20. Taimoor Zubar
    December 27, 2012

    @jmcfarland: The reason I mentioned NFC was because it's the only radio-waves related technology which is being built inside the smartphones. But you're right – because of the limited range NFC might not be so useful for this application. Do you reckon any other form of technology based on radio waves will be built inside smartphones in the coming future? I see a lot of potential uses if that happens.

  21. Houngbo_Hospice
    December 27, 2012

    @t.alex,

    “What is the advantage of integrating RFID chip into a smartphone?”

    I think that integrating RFID chip into any device without the user being able to remove it will violate user privacy and freedom. When the item is already sold, the tag should be desactivated.

  22. Houngbo_Hospice
    December 27, 2012

    @jmcfarland,

    Thanks for sharing the information about Brouha. I have the impression that the loyalty program has some limitations. It is not because I visit a shop that I will necessary buy items there. Am I missing anything?

  23. Houngbo_Hospice
    December 27, 2012

    @Douglas,

    It is indeed good to know if users stand any chance to fight against privacyu issues brought about by the use of RFID tagging. I don't know which advocacy group is making much noise, but I am sure that manufacturers will find ways to circumvent their actions.

  24. Himanshugupta
    December 27, 2012

    @Rich, i think cost will be a problem going from passive to active as most of the cards that we carry now-a-day are passive. Also, i would not like to carry another card in my pocket.

  25. Himanshugupta
    December 27, 2012

    @Hospice, i think the advantage will be for the targeted ads as store will know which sections you visited and which items you checked. So they will send you relevant offers and schemes on your smartphone or next time you visit the shop.

  26. SP
    December 27, 2012

    Agreed. RFID technology is yet to scope out its full potential in supply chain. Its extremely beneficial for supply chain security. I dont know if in international supply chain business its already in action.

  27. _hm
    December 28, 2012

    RFID seems look very popular. However, when there is problem and suggested solution is RFID, an organization does implement it and are reluctant. What can be reason for this? May be RFID need more work to do – hardware or software.

     

  28. dalexander
    December 28, 2012

    @_hm, I think we are still in the early stages of RFID development. There are specific areas that RFID was originally targeted to address. Back in 1989 Savi Technology began with logisitics tagging products. Back then, I talked with them as they were developing a hand held, walk-around polling device for area inventory management. As a person walked up and down the aisles of stacked inventory, the hand-held reader would gather the counts for rapid inventory accounting. I was so excited about their company, I almost asked for an interview for employment. So that was 23 years ago and they are still in the asset management/tracking business. This is still the primary application for RFID. The key term here is “Asset.” If you consider humans as assets that need to be tracked for location and information data gathering purposes, then the next step is to ask how important are those assets to track and what are the consequences of losing track of them. So if those assets are tanks and very expensive military gear, then the asset becomes a liability if lost. I think _hm, we will see greater and greater deployments proportional to the cost of the RFID as measured against the considered worth of the asset. As development continues, the lower the cost of the RFID components, the lower the value of the asset will have to be to merrit the installation of a tracking system. Animals, People, Things, and Documents are all prospective candidates for massive tracking and data gathering technologies. That doesn't leave much out. My guess is that in the next couple of years we will be living with RFID as part of our daily experience as much as we now are adjusted to stop signs, traffic signals, and Starbucks on every corner.

  29. dalexander
    December 28, 2012

    @Rich, You are correct. There will be an upcharge from passive to active and I think the decision to implement will be similar to the smartcard now used in Cable TV systems to ensure against piracy. These smartcards have microprocessors built in with encryption technologies that require a 1:1 subscriber to operator's authorization relationship. I was buying smartcards in quantities of 10,000 for $9.75 each and charging the subscriber to cover my cost. If we begin to see loyalty cards issued in the same fashion, then we will probably see some unique marketing techniques designed to defray the cost of the cards so the retailer does not take the entire hit. I don't think customer's will pay for the cards nless there is an added incentive in promised savings over X period of time. I think of people buying coupon books like Diner's Club in order to realize greater savings at each meal. The idea being that the card pays for itself after Y number of uses.

  30. _hm
    December 29, 2012

    What typical data is contained in RFID tag? Is it barcode type product code and serial number? Or date of manufacturing and best before date? Is there international standard for RFID tag data?

     

  31. dalexander
    December 29, 2012

    _hm, Instead of going into the details here, I am including a PDF URL that will let you review the standard for yourself. There is a basic information standard called EPC described in the PDF, but when RFID carriers also include both read and write capabilities via EEPROM associated add-ons, then the data is defined by the developer of the software and is only limited to the size of the memory. In real-time applications for tracking, the data can be forwarder via Wi-Fi in real time. There are lots of variations but here is the PDF that starts with the standard EPC. http://www.gs1.org/gsmp/kc/epcglobal/tds/tds_1_5-standard-20100818.pdf

  32. Houngbo_Hospice
    December 29, 2012

    @Himanshugupta,

    I see, if the ads/offers are relevant that may entice potential customers to commit to buying. I was just skeptical about the loyalty of the targeted audience. 

  33. Houngbo_Hospice
    December 29, 2012

    @SP,

    ” Its extremely beneficial for supply chain security. “

    The Supply Chain security can be enhanced by RFID for sure and it can also help optimize the supply chain management. It can help track product flow and identify inbound and outbound product in the warehouse. 

  34. hash.era
    December 30, 2012

    RFID is not dying for certain. It still has some tricks on its bag. I think integating with SCM and CRMwould be great.

  35. bolaji ojo
    December 30, 2012

    RFID isn't dying and it's not getting some great play either relative to the way it's been hyped in recent years. It's making a splash, one drop at a time!

  36. dalexander
    December 31, 2012

    @Bolaji, I like the turn of phrase making a big splash one drop at a time. That implies some big drops as opposed to a steady flow. If we say the drops are implementations, I would agree as the infrastructure investment for a system beyond a handheld reader and RFID tags can be quite extensive and therefore somewhat costly. But once the infrastructure is in place and more chips come with integrated on board storage with read/ write functionality, then we will see those drops getting closer together accelerated by converging technologies using the cloud, sophisticated polling techniques, and extensive adoptions of universal standards like GS1's Gen 2 RFID with EPC and eEPC now agreed upon by 111 committee members impacting over 2 million companies worldwide. Though not always the case, EPC bar codes and data bars can be included in the RFID carrier so if you use the printed bar code as a model for volume predictions, then RFID is about to turn from a drop system into a firehose.

  37. dalexander
    December 31, 2012

    @Bolaji, I like the turn of phrase making a big splash one drop at a time. That implies some big drops as opposed to a steady flow. If we say the drops are implementations, I would agree as the infrastructure investment for a system beyond a handheld reader and RFID tags can be quite extensive and therefore somewhat costly. But once the infrastructure is in place and more chips come with integrated on board storage with read/ write functionality, then we will see those drops getting closer together accelerated by converging technologies using the cloud, sophisticated polling techniques, and extensive adoptions of universal standards like GS1's Gen 2 RFID with EPC and eEPC now agreed upon by 111 committee members impacting over 2 million companies worldwide. Though not always the case, EPC bar codes and data bars can be included in the RFID carrier so if you use the printed bar code as a model for volume predictions, then RFID is about to turn from a drop system into a firehose.

  38. dalexander
    December 31, 2012

    @Rich, You were right about the rambling but when you consider it was first posted in 2008, this is a good general overview of the areas of academic concern and potential further areas for development. But in 4 years, we have come a long long way and Sanjay seemed to anticipate the potential technologies that would come to play in both the readers and the tags themselves. I also thought it was to his credit that he was able to see back in 2006 that it would be MIT that would take the bull by the horns to instigate the bulk of the research papers and open the door to advancements in the various applications for RFID. I was impressed with his foresight. Thanks for the link. 

  39. FLYINGSCOT
    January 1, 2013

    I envisage a future like the scene from the movie “Minority Report ” where Tom Cruise walks through a store and holographic service personnel recognize him and greet him, trying to sell him stuff they imagine he would be interested in.  The background info is gathered from mining data on his shopping or surfing history and I find this whole idea annoying and frankly quite scary.

  40. Ariella
    January 1, 2013

    @flyingscot annoying it may be, but it is already here. If you carry a smartphone, you can get offers not only based on your purchasing history but on your location.

  41. Eldredge
    January 2, 2013

    I can see great applications for this technology in supply chain management. On a personal level, I am not a big fan of revealing my purchasing history for someone else to use – it feels like a loss of control. Time to start wrapping my cards in tin foil!

  42. hash.era
    January 30, 2013

    To be honest Bolaji I dont belive in splashes. I feel one drop at a time is not at all enough.

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