Emerging Technologies: RFID

Emerging Technologies: RFID Kristi Meyer SuphaksornPhamaranon Xiaohu Zhao

Topics to Cover General RFID Information Definition, History, Technical Information Market Information Applications Why should general managers care about RFID? What are the benefits of implementation? What are the challenges to implementation? Case Studies Problems, Concerns and Controversies

RFID- Defined “Radio-frequency identification (RFID) is an automatic identification method, relying on storing and remotely retrieving data using devices …that can be applied to or incorporated into a product, animal or person for the purpose of identification using radio waves.” 3 www.wikipedia.org/wiki/RFID, viewed 10/8/07

What is RFID? A basic RFID system consists of three components: • An antenna or coil • A transceiver /reader (with decoder) • A transponder (RF tag) electronically programmed with unique information 4 www.automation.siemens.com/rfid/html_76/produkte_ws_ist_rfid.htm, viewed 10/8/07

Video http://www.aimglobal.org/services/RFIDSpotlight.asp

The history of RFID • 1940–1950 • Radar refined and used, major World War II development effort. RFID invented in1948. • 1950–1960 • Early explorations of RFID technology, laboratory experiments. • 1960–1970 • Development of the theory of RFID. Start of applications field trials. • 1970–1980 • Explosion of RFID development. Tests of RFID accelerate. Very early adopterimplementations of RFID. 6 JEREMY LANDT “The history of RFID” PP10-11

The history of RFID • 1980–1990 • Commercial applications of RFID enter mainstream. • 1990–2000 • Emergence of standards. RFID widely deployed. RFID becomes a part of everydaylife. • 2000– • RFID explosion continues 7 JEREMY LANDT “The history of RFID” PP10-11

The future evolution of RFID by primary application Retail Logistics Passport Supply Chain Logistics Payment Access control Asset Management Transport 2000 2003 2005 2008 8 JEREMY LANDT “The history of RFID” PP10-11

Passive Tags Obtain operating power from the reader Typically read only Active Tags Are powered by an internal battery Are typically read/write Low Frequency (125-134.2 KHz, 140-148.5 KHz) Short reading range (less than 1 ft), Security access, asset tracking, and animal ID applications High Frequency (13.56 MHz) Read from about 3 feet away Ultra High Frequency (868-928 MHz , 2.4- 2.5 GHz) Read from 10-300 feet away Types of RFID www.aimglobal.org/technologies/RFID/what_is_rfid.asp, viewed 10/8/07 www.wikipedia.org/wiki/RFID, viewed 10/8/07 www.fridjournal.com/fac/18/69, viewed 10/8/07 9

Passive or Active Tags Size range: Equivalent to a grain of pepper to a brick 10 www.infor.com, White Paper: How RFID Technology Can Enhance Your Asset Management Program, viewed 10/8/07

Tag Attachment • Attachable • Applied as adhesive “sticker” • Implantable • Animal tracking • VeriChip approved by US FDA in October 2004 for human implantation. • Contains emergency medical information and “could save lives and limit injuries” in an emergency situation • Insertion • Chip placed inside a device • Mobile Speed Pass • Digestible • Eastman Kodak Company has 2 patents for monitoring the ingestion of medicine 11 www.wikipedia.org/wiki/RFID, viewed 10/8/07

Reader/Writer Types • Fixed • Mounted to stationary object, like doorway • Typically “pass through” applications • Location and work-in-process • “Smart shelves” • Portable • Hand held device, similar to barcode readers • Affixed to moving object like fork truck 12 www.infor.com, White Paper: How RFID Technology Can Enhance Your Asset Management Program, viewed 10/8/07 http://www.rfidsupplychain.com/Detail.bok?no=184, viewed 10/30/2007

How is Data Encoded on Tags? • At time of tag production • This type of information is static, not specific to the product it is later attached to. • Physical connection to writer or printer. • The tag device is physically connected to enable the data to be transferred to the tag. • Wireless connection to writer or printer • Data is transmitted to the tag through the RF frequency.

Difference from Barcodes • Do not require contact or line of sight for communication. • Can read through the human body, clothing and non-metallic materials. • Can be read and write or be reprogrammed • Can read multiple tags simultaneously. • 1000 tags/second • More expensive tags and reading equipment • More data can be stored on RFID than barcode • Can exchange information 2-ways for advantages in interactive applications such as work-in- process and maintenance tracking. www.aimglobal.org/technologies/RFID/what_is_rfid.asp, viewed 10/8/07 www.infor.com, White Paper: How RFID Technology Can Enhance Your Asset Management Program, viewed 10/8/07 14

Transponder Construction formats • Glass housing • Disk and Coin • Plastic housing • Smart label • ID-1 format (Credit card) • Coil-on-chip • Other formats 15 http://www.speakingeye.com/index.php?lay=show&ac=article&Id=401359&Ntype=2, viewed 10/25/07

Topics to Cover • General RFID Information • Definition, History, Technical Information • Market Information • Applications • Why should general managers care about RFID? • What are the benefits of implementation? • What are the challenges to implementation? • Case Studies • Problems, Concerns and Controversies 16

RFID Stock Index RFID Index refers to entire RFID industry. Included companies such as Avery, Dennison, Zebra & NCR. 17 RFID Monthly September 2007

RFID MarketSize billion dollar Now the biggest RFID market is in China This is because of a peak in delivery of contactless national identification cards in China prior to the 2008 Olympics About $1.65 billion is being spent on 300 million of these cards plus their associated systems being delivered in 2007 out of a project commitment of $6 billion, the largest of any RFID project in the world. 18 July 23, 2007 - RFID, LTD. (OTC: RFDL) releases updated industry metrics for the Radio Frequency Identification (RFID) market.

Market Survey Information • More companies seeing benefit beyond supply chain applications • Michael Liard, director of Applied Biosystems • Asset Management, Security Access Control, Inventory Management • While increasing number of companies have implemented RFID or are considering it, the main driver for adopting the technology is from downstream demands • Reluctance to take on project due to cost and concerns about ROI. N=175 19 http://www.foodproductiondaily-usa.com/news/ng.asp?n=78308-abi-rfid-tracking, viewed 10/30/07

Access control/ Personal ID • Access control • Building Access • Time Attendance • Human Resource Management • Personal Identification • e-Passport • e-Citizen 21 http://www.speakingeye.com/index.php?lay=show&ac=article&Id=401359&Ntype=2, viewed 10/25/07

Member card/ e-Ticket • Credit card/ debit card • Toll Tags • e-Ticket • e-Purchasing 22 http://www.speakingeye.com/index.php?lay=show&ac=article&Id=401359&Ntype=2, viewed 10/25/07

Supply Chain Management/ Logistics • Supply Chain Management • Warehouse Management • Cargo Management • Logistics 23 http://www.speakingeye.com/index.php?lay=show&ac=article&Id=401359&Ntype=2, viewed 10/25/07

Animal Tagging • National Animal Identification • Food Traceability • Disease Control 24 http://www.speakingeye.com/index.php?lay=show&ac=article&Id=401359&Ntype=2, viewed 10/25/07

e-Seal and anti-tamper Bolt Seal Security Tag • Electronically secures ocean containers, air cargo ULD containers, trailers • Monitor presence and integrity of bolt seal, generates alarm upon bolt removal or breakage • Re-usable tag • Reduces manual inspections • Minimizes theft, loss and tampering 25 http://www.speakingeye.com/index.php?lay=show&ac=article&Id=401359&Ntype=2, viewed 10/25/07

e-Seal and anti-tamper 26 http://www.speakingeye.com/index.php?lay=show&ac=article&Id=401359&Ntype=2, viewed 10/25/07

Electronics Immobilization 27 http://www.speakingeye.com/index.php?lay=show&ac=article&Id=401359&Ntype=2, viewed 10/25/07

Benefits • Inventory Costing • Able to assign cost of items sold using Specific Identification Method (SIM) • Most accurate, but most expensive to implement because tracking of individual items is required. • RFID enables SIM without high labor cost • Labor Cost Reduction • Less labor required for inventory management • Better accuracy for inventory data • Revenue Creation • Avoid stock outs. • Raise brand awareness. • Improve Efficiencies 29 Markelevich, A. and Bell, R., “RFID: The Changes It Will Bring” Strategic Finance, August 2006, pp 46-49.

Challenges of Implementation • Significant Investment to Implement • Readers- $500-2000 each • Antennae- $250 (or more) each • Tags- $0.05 to $0.20 (or more) each • Depends on type and order quantity • Software/ Infrastructure for data collection • Potentially 50% of total cost • Associated costs of project implementation • Wiring – physical installation • Project labor • Large financial hurdle to overcome • Limited resources (knowledgeable people) available to implement • Ability to handle the flood of additional information available with RFID Lin, P. and Brown, K., “Radio Frequency Identification and How to Capitalize on It” The CPA Journal, July 2006, pp 34-37. www.rfidjournal.com/faq/16/54, viewed 10/8/07 Markelevich, A. and Bell, R., “RFID: The Changes It Will Bring” Strategic Finance, August 2006, pp 46-49. Lin, D., Barton, R., Bi, H., and Freimer, M., et al, “Challenges in RFID Enabled Supply Chain Management” Quality Progress, November 2006, pp 23-28. 30

Data Standardization • Proprietary or Standard? • Amount of data on tag • 96-bit to 2KB • Single use or re-writable • Each country has own guidelines (and governing bodies) for frequency allocation. • EPCglobal working on international standards • EPC- Electronic Product Code • EPC Gen2 standard approved in Dec 2004, and is likely to be backbone of passive RFID standards going forward. • http://www.epcglobalinc.org/standards/uhfc1g2/uhfc1g2_1_1_0-standard-20071017.pdf • ISO (International Standards Organization) also developing standards • ISO18000-3, ISO18000-6 www.wikipedia.org/wiki/RFID, viewed 10/8/07 www.rfidjournal.com/faq/28/133 http://www.epcglobalinc.org/home, viewed 10/30/2007 31

Case Studies • Vehicles in China • Wal-Mart • Department of Defense • Jacobi Medical Center, New York City • Delta Airlines 33 www.automation.siemens.com/rfid/html_76/presse_fotos.htm, viewed 10/8/07

Vehicle management in China • Install RFID tag in front of the public bus • Fixed reader installed in a majority of main road • When bus is approaching the crossing • System automatically adjust the traffic light • Increase public bus operation efficiency 60% 34

Wal-Mart • RFID implementation resulted in as much as $8 Billion savings (pre-tax) by 2007 • 16% reduction in out-of-stocks • Out-of-stock items replenished 3x faster than non-RFID items. • Reduction in manual orders • Reduction in excess inventory 35 Lin, P. and Brown, K., “Radio Frequency Identification and How to Capitalize on It” The CPA Journal, July 2006, pp 34-37.

Department of Defense • Army lost $1.2 billion in materials that weren’t received in the field. • Orders typically were hand written in the field • 2003 mandated its suppliers use RFID by January 2005 • New system expect to shave 27 days from supply chain, and improve accuracy • From 33 to 5 days Markelevich, A. and Bell, R., “RFID: The Changes It Will Bring” Strategic Finance, August 2006, pp 46-49. Lin, P. and Brown, K., “Radio Frequency Identification and How to Capitalize on It” The CPA Journal, July 2006, pp 34-37. 36

Jacobi Medical Center • Used wristbands embedded with RFID for admitted patients. • Doctors and nurses used portable reader to review and edit records. • Eliminated many keystrokes • Saved time (1 hour / shift for nurses) • Prevented errors • Did not need to wake patient, even if sleeping on band. • Cost: $325K to implement + $65K annually • Estimated savings $1M annually Miller, J., “Criteria for Evaluating RFID Solutions for Records and Information” The Information Management Journal, January/February 2007, pp 50-54. 37

Delta Airlines • Baggage Handling • ~25% of complaints due to lost/mishandled luggage. • Annual cost of reclaiming luggage, and compensating customers: > $100 Million • Implementation cost: $15-25 Billion. • Trial results- 99.8% success rate Anonymous., “Delta Air Lines and baggage handling” Strategic Direction, Vol. 22 No. 6, pp 22-24. 38

Problems and Concerns • Reader collision • Signal from 2 or more readers overlap • Signal interference • Multiple reading of the same tag • Over come by strategic positioning of readers & systems/procedures to avoid multiple reading of tags • Tag collision • Large volume of tags must be read in the same area • Programming to allow for “gaps”, so time is available for all tags • Signal disruption • More powerful electromagnetic signal interferes or overpowers reader. • Covert readers • Reading of tags by unintended sources (corporate espionage, invasion of personal privacy) • Blocker tags and tag killing • Hidden tags • Tags in purchases left active and read by retailer (or others) later 40 Lin, P. and Brown, K., “Radio Frequency Identification and How to Capitalize on It” The CPA Journal, July 2006, pp 34-37.

Controversies • Security Concerns • Viruses • Illicit tracking of RFID tags • Owner of item may not be aware of tag • Becomes possible to gather sensitive information from individual • Thieves potentially being able to “read” contents of house remotely • Cancer Risk for implantation • Sept 2007 study released indicating that RFID chips induced malignant tumors in laboratory animals • US FDA- no response • Studies somewhat limited in scope, no control groups, didn’t test large animals • Led to cautionary language regarding cancer in humans • Mark of the Beast (666) • Primarily Evangelical Christians • Mentioned in Book of Revelations (see Rev 13:16) 41 www.wikipedia.org/wiki/RFID, viewed 10/8/07

Questions? 42

Emerging Technologies: RFID