RFID – One Step Solution for Identification, Tracking, Tracing

By: Prakash Kumar Udupi (M. Tech.)

Assistant Professor& Dept Head (IT & CAD)
AIFD, Bangalore

E-Mail: prakashaifd@yahoo.co.in

Microchips implanted in humans, doorways, ceilings, floors,cars, food and clothing may soon make privacy a thing of the past. Radiofrequency identification is an automatic data capture technology that uses tinytracking chips affixed to a product. RFID was originally developed during WorldWar II as a way to tell friend from foe in air combat by sending out a signal.At the time, the name was IFF (Is it Friend or Foe). Years later, thetechnology was used to track stray animals by implanting chips under theirskin. Currently there are at least 103 companies including VeriChip, IPICO,Tesco and IBM that are developing RFID Technology. RFID enabled productiontracking system definitely yields improved productions including easierperformance measurement and better production decision making.

RFID Success Story :

Wal-Mart , worlds renowned retailer says that by January 31, 500 more of its 3,900 stores will be using RFID technology to track goods entering their premises, bringing the total to 1,000 RFID enabled stores. On Sept. 12, 2006 Wal-Mart announced it is moving forward with its RFID initiative by bringing the next phase of its chain of stores online for RFID technology. By January 31, the end of the retailer's fiscal year, another 500 of Wal-Mart's 3,900 stores will be using RFID technology to track goods entering their premises. This will bring the total of RFID-enabled Wal-Mart stores up to 1,000, fulfilling the goal the company set for itself in October 2005. The retailer is also working with its next 300 largest suppliers to ensure that they their products with test cases in October. This group will go live with RFID technology in January 2007, joining 300 other suppliers that have already done so. Wal-Mart believes that use of RFID has helped it significantly reduce out-of-stocks and excess inventory at its stores. That claim is supported by a 2005 study carried out by the University of Arkansas. (This is only the tip of an iceberg)

RFID Advantages :

Although RFID implementations are not without costs and risks, typical companies in manufacturing, warehousing and distribution and retail have been known to achieve 200 percent ROI (net benefits divided by costs) or more from these projects. What this means is that for every dollar invested in RFID, companies are getting back $2 in incremental benefits (the original dollar invested, plus two more).

RFID provides persistent, real-time identification information with minimal human intervention, allowing more frequent data collection and greater information capture. The competitive advantage and bottom-line business benefits are significant to the supply chain that implements RFID to its advantage. Early estimates indicate that a comprehensive RFID solution can generate an additional 2 to 7 percent increase in revenue, improve handling productivity by 20 to 30 percent, reduce operating expenses by 2 to 5 percent and reduce days in inventory by 1 to 2 percent. Financial improvements such as these are significant, and it is for this reason that many companies are moving forward with RFID, sooner than later.

The other tangible benefits of RFID in business are:

�Warehouse and Distribution Productivity
�Retail and Point-of-Sale Productivity
�Out-Of-Stocks
�Inventory Management
�Shrinkage
�Supply Chain Errors
�Capital Asset-Tracking and Management
�Counterfeiting and Improve Security
�Systematic and better Data Warehousing

Thus, RFID is being implemented, along with key business-process improvements in many industries, to reliably track goods of all kinds - from cases, pallets and individual items in manufacturing, wholesale distribution and retail applications, to equipment and supplies in government applications, to overnight mail packages and passenger luggage in transportation and shipping. Many of these early adopters have experienced the benefits of bar codes, but realize that RFID can take supply-chain management to the next level. The network effects of a synchronized supply chain will result in numerous benefits, including improved scan reliability, process automation and real-time information access.

Enabling RFID in Clothing Production:

Chinese Clothing manufacturing firm Lawsgroup has deployed an RFID work-in-progress tracking system that is leading to measurable improvements in its operations and a quick return on investment. During Aug. 2006 Lawsgroup , a contract manufacturer based in Hong Kong that produces garments for a number of U.S. retailers, including Gap, Old Navy and JC Penney uses RFID to automate the tracking of raw materials, semi finished components and finished garments throughout most of its 15 production sites, in Asia.

Prior to its RFID enabled clothing production, the company had experienced growing pressures from clothing designers to manufacture more garment styles each year with increasingly shorter lead times. Moreover, most of the retailers requested more timely or fashionable products for each season. This forced Lawsgroup to look for a means of supporting a leaner manufacturing process with greater control over each production step, so that the company would produce only what it needed for each order and could react more quickly to order changes.

Under its manual tracking system, Laws explains, once the raw materials were sent into the production process, they entered a "black hole," where they remained invisible until emerging as a finished product. Cut raw materials, to be used to fulfill each order, were grouped together in component bundles, such as sleeves, cuffs and hoods. A hand-written paper ticket with order information was attached to each bundle by a strip of fabric, and bundles were brought from sewing station to sewing station, where the bundles changed from components to completed garments. The garments were then sent to a quality-inspection station. Throughout the tracking process, pertinent information was written to the tickets accompanying each bundle at each station. Sometimes the information was incorrect or illegible, causing production delays.

Under the new RFID-enabled system High Frequency Smart Cards (13.56 MHz) take the place of the paper tickets, and as employees collect the finished goods, they erase and reuse the attached smart cards. The data collected from the cards provides a real-time look at how much each Lawsgroup plant produces throughout each shift.

As the garment components are assembled, workers encode the order information onto the smart cards. They use interrogators located at each workstation to read the smart cards, and they also scan a smart card assigned to each worker as an ID badge. The back-end system uses this data to track how many pieces are completed, as well as how many pieces of each garment order have reached each step in the manufacturing process. This kind of real-time information sharing was not possible with the paper-ticket tracking system.

The back-end system also tracks each worker's output by correlating the badge reads with the bundle tag reads at each workstation. This information is used to help track and reward high-output workers. At the quality-inspection stations, any sewing flaws in garments can be traced back to the workers responsible for them. Law says this information is not used to punish workers, but is taken into consideration as managers relegate tasks in the factories. "We look for each worker's strengths and encourage them," says Laws

Large electronic displays are hung in all production areas, and employees can reference them to track the plant's cumulative progress toward meeting production goals. Lawgroup's IT department developed the RFID system in-house and has integrated it with its enterprise resource-planning (ERP) system. The RFID back-end data system is customized to the company's needs. For example, the system can send alerts to plant managers when incoming orders and current production levels point to an imminent bottleneck.

Thus, from the above case, one can conclude that RFID enabled production tracking system definitely yields improved productions including easier performance measurement and better production decision making. Further what helped the success was a "commitment from management" to see the RFID solution implementation , along with a strong belief in the technology and the use of in-house IT staff to develop the system, rather than relying on an outside vendor.

About the author:

Prakash Kumar Udupi has done his M. Tech. and is Assistant Professor& Dept Head (IT & CAD) AIFD, Bangalore E-Mail : prakashaifd@yahoo.co.in