Rfid Technology

Radio frequency identification (RFID)

RFID is a technology that uses radio waves to transmit the identity or information of an object or person in the form of a unique serial number or data, unlike bar-code technology RFID can be read without contact as far as 100 feet or even more depending on the antenna/reader power that is used to detect the tag or chip, it works by having the antenna/reader emit radio waves that detects tags in its zone, when detected its reads the tag and sends the data it carries back to the reader for decoding before passing it for processing by the host computer.

The applications of this technology (RFID) are numerous and still evolving and branching into different sectors especially with the help of Nano-Technology. Though the main discussion in this essay is how this technology is implemented in the retail business I will be addressing deferent issues surrounding it.

Despite the fact that this technology has been around for decades it is considered a young technology that still requires improvements and tweaking in accordance with the industry that is employing it, hence why every now and then there is a good share of criticism due to security and ethical issues arising with certain uses.

Benefits in Retail Businesses

This technology is all about automatic data capture and radio signals exchanging identifying information. Its "first uses dates back to World War II, when the British used the technology in allied aircrafts to detect friends from Foes minimizing friendly fire" . At the beginning its simple ability of tracking is what made it special add to that over time it's becoming cheaper and more accessible to businesses. It had been used to track pets, farm animals even railroad cars. Since its introduction it gained a big interest from all sectors from manufacturing and logistics to retail businesses and even government use where "the US for example has used chips to support the security of their documents by storing an electronic copy of the passport information: your name, a digitized picture, etc. And in the future, the chip might store fingerprints or digital visas from various countries."

Currently the trend seems to indicate that all major retail businesses are moving towards adopting this technology due to its benefits, a good model of this would be the retail giant Wal-Mart which implemented this technology in almost all aspects of its business, since 2005 all suppliers of the company are required to use RFID enabled shipments for easier inventory tracking and SCM, which in part helped this company maintain its title as the most efficient retail supply chains in the world, "One estimate puts Wal-Mart's savings at $8.35 billion per year if it fully implemented RFID throughout its operations. That figure is more than the total revenue of half the companies on the Fortune 500" .

The areas where RFID comes in strong in the retail industry are theft reduction, Inventory management and improved checkout, I will try to address every section and give an example how RFID is implemented and what benefits its brings to each group.

Theft Reduction

According to Tim Zehring, director of the international crime free association and a retired police officer, "theft from retail stores costs businesses close to $40 billion in lost revenue annually" . RFID will help reduce this significantly, we can view the implementation in Electronics retails business such Best buy and Future shop (operated by the same company) as the best model for this, when an object is taken, a music CD as an example, without being passed at the POS (point-of-sale) the alarm will start sounding as soon as the item crosses or gets close to the store exit doors due to the RFID tag imbedded in the stolen or 'mistakenly' taken CD, that combined with store cameras will help discourage most thieves from attempting to steal which translates into money saving.

Efficiency

When it comes to efficiency we can look into logistics, when retailers place an order for products from suppliers their order can be monitored from the first stage of the journey. Incoming shipments can be tracked in all stages, from shipping, checkpoints to warehouses making it easy for retailers to anticipate the arrival of new stock and do any needed adjustments to the warehouse and inventory. For instance, Inside large warehouses where containers carry different products it will be easier to locate the wanted container, moreover it made automated sorting possible, in comparison when these tasks where done manually it was more labor and time consuming.

Inventory Management

"In the stock room, the clothes are placed in RFID-enabled cabinets, each containing an Alien Technology ALR-8800 reader within. When staff members want to move apparel from the stock room onto the sales floor, they place the garments in an RFID-enabled bin used to transport the clothes, and the inventory is updated in real time. An employee then moves the bin to the sales floor, where the clothes are put on display shelves and racks." The technology made it possible to have a unit or product count inside a warehouse in a matter of minutes whereas compared to bar-code count this task can take Hours. Again, less time consumption and less labor result in huge savings to the retailer and even the consumer, No more resources being drained due to bad inventory management, because employees are not required to have the inventory personally counted to get the numbers on hand which is a great thing especially during holidays when employees are busy serving customers, thus no more delay in knowing when a certain item is coming close to being sold out, it can be done by a peak