Expert answer:Insight on Technlogy Case, RFID AutoIdentification
Answer & Explanation:Please read “The Insight on Technology Case, RFID AutoIdentification” on page 781 and describe how RFID will impact interfirm trade and B2B Commerce.(please provide good quality and original response. Thank you!)INSIGHT ON TECHNOLOGY Reading.docx
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INSIGHT ON TECHNOLOGY: RFID
AUTOIDENTIFICATION: GIVING A VOICE TO YOUR
INVENTORY
It’s 10 p.m. Do you know where your containers are? Wouldn’t it be nice if
your containers could talk to you, call home every now and then to report their
progress towards your loading docks? Radio frequency identification (RFID)
makes that possible today, and in 2011, even your jeans will be given a voice
inside, and maybe outside, the store where you purchased them.
If you’re in business anywhere in the world today, and that business involves
physical goods, then chances are quite good that your business depends on the
movement of goods in containers. In fact, there are more than 200 million sea
cargo containers moving every year among the world’s seaports, and nearly
50% of the value of all U.S. imports arrive via sea cargo containers each year.
The containers are loaded onto ships, and stacked high on the deck. The
containers also fit on the back of trucks and on railway carriages. So when the
containers are unloaded from the ship, they continue their journey from the port
on the back of trucks or trains. It is a fast and efficient way of moving cargo. A
standard container is about 20 feet long, 8 feet wide, and 8 feet high, and can
hold about 47,900 lbs of cargo.
Prior to the development of containers, all ocean-going cargo was loaded and
unloaded onto ships in huge nets by dock workers, one package at a time. While
the container revolutionized ocean shipping, vastly increasing productivity and
reducing breakage, keeping track of 200 million cargo containers is difficult.
While each container has its own permanent ID number painted on the side, as
well as a bar code identification tag, this number must be entered manually by
dock workers or scanned up close. Identification of containers is slow and prone
to errors. If you had to find one container on a dock containing over 1,000
containers, you would have to read each ID number until you found the one you
wanted. All by themselves, containers can’t talk.
Tracking containers is just one part of the larger B2B product identification
problem. Retailers such as Walmart, Target, and Amazon find it difficult and
expensive to track millions of annual shipments into and out of their warehouses
and sales floors; the automotive industry finds it costly and difficult to
synchronize the flow of parts into its factories; the U.S. Department of Defense
logistics system finds it difficult to track the movement of troop supplies; and
the airline industry often loses bags in transit.
Thirty years ago, the development of the Uniform Product Code (UPC) and the
ubiquitous bar code label was an initial first step towards automating the
identification of goods. But the bar code technology of the 1970s still required
humans or sometimes machines to scan products. The problem with bar codes is
that they don’t talk—they are passive labels that must be read or scanned.
Today, a new technology to replace bar codes is being deployed among the
largest manufacturing and retailing firms. RFID involves the use of tags
attached to products or product containers that transmit a radio signal in the 850
megahertz to 2.5 gigahertz range that continuously identifies themselves to
radio receivers in warehouses, factories, retail floors, or on board ships. RFID
labels are really tiny computer chips and a battery that are used to transmit each
product’s electronic product code to receivers nearby.
RFID has several key advantages over the old bar code scanner technology.
RFID eliminates the line-of-sight reading requirement of bar codes and greatly
increases the distance from which scanning can be done from a few inches up to
90 feet. RFID systems can be used just about anywhere—from clothing tags to
missiles to pet tags to food—anywhere that a unique identification system is
needed. The tag can carry information as simple as a pet owner’s name and
address or the cleaning instruction on a sweater to as complex as instructions on
how to assemble a car. Best of all, instead of looking at a warehouse filled with
thousands of packages that can’t talk, you could be listening to these same
thousands of packages each chirping a unique code, identifying themselves to
you. Finding the single package you are looking for is greatly simplified. RFID
tags produce a steady stream of data that can be entered into Internet-and
intranet-based corporate applications such as SCM and ERP systems.
In 2011, the global RFID market is estimated to be $5.3 billion, with a U.S.
market of $3 billion. The RFID market is expanding rapidly because of the
growing use of RFIDs by governments and private industry, as well as the
explosive growth in item-level RFID.
The tagging of apparel by companies such as Marks & Spencer and American
Apparel is now in the rollout phase with 200 million RFID labels being used for
apparel (including laundry) globally in 2011. In total, about 2.35 billion tags
will be sold in 2011. Major computer firms such as Microsoft, IBM, and
Hewlett-Packard are investing over several hundred million dollars each over
the next five years to develop RFID software that will link RFID data to firms’
SCM systems. Walmart, the world’s largest retailer, has made RFID an
important part of its supply chain strategy. It began by mandating that its top
100 suppliers place RFID tags on all cases and pallets headed for the firm’s
Dallas distribution centers. Currently, about 600 of Walmart’s U.S. suppliers are
tagging cases and pallets of some of the products they ship. About 1,000
Walmart stores are RFID-enabled, with another 400 planned, as well as six of
its distribution centers. In 2010, Walmart introduced even more sophisticated
electronic ID tags to track individual pairs of jeans and underwear (as opposed
to pallets of clothing). Called “item-level” tracking, the idea is to put an RFID
tag on every item of apparel in inventory. This will permit near instant
inventory analysis, continuous restocking, and an estimated increase of 14% in
sales according to industry research. In the not-too-distant future, item-level
tracking will enable walk-by checkout at grocery and apparel stores, and the end
of checkout lines. In addition to Walmart, JCPenney, Target, Bloomingdale’s,
Benetton, and American Apparel will use item-level tracking in 2011.
Walmart will place so-called removable “smart tags” on each piece of clothing.
The smart tags can be read by handheld scanners at the point of sale, or
elsewhere in the store. The smart tags will allow Walmart managers to learn, for
instance, which sizes of Wrangler jeans are missing, and which sizes should be
re-ordered. In January 2008, the RFID program at Sam’s Club became
mandatory, with suppliers charged $2 per pallet for deliveries without RFID
tags. Although Walmart remains committed to the technology and estimates that
it could increase sales by $287 million by using RFID technology, its
implementation to date has had mixed results because suppliers have been
reluctant to pay the costs of attaching RFID tags to pallets. Walmart has had to
subsidize this cost in order to gain acceptance from suppliers.
As adoption of the technology increases, RFID will have a profound impact on
B2B e-commerce by reducing the cost of tracking goods through industry
supply chains, reducing errors, and increasing the chances that the right product
will be sent to the right customer.
(Traver 781-782)
Traver, Kenneth Laudon and Carol G. E-Commerce 2012, 8/e for DeVry University.
Pearson Learning Solutions, 10/2012. VitalBook file.
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