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RFID stands for Radio Frequency Identification. RFID is an automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders (Wikipedia, 2005). It is a way to automatically identify people or objects. There are several methods of identification, but the most common is to store a serial number that identifies a person or object, and perhaps other information, on a microchip that is attached to an antenna. The chip and the antenna together are called an RFID transponder or an RFID tag. The antenna enables the chip to transmit the identification information to a reader (Wikipedia, 2005). The reader converts the radio waves reflected back from the RFID tag into digital information that can then be passed on to computers that can make use of it (Wikipedia, 2005).
Here is a real life example of how RFID really works. Take the example of books in a library. Security gates can detect whether or not a book has been properly checked out of the library. When users return items, the security bit is re-set and the item record in the integrated library system is automatically updated. In some RFID solutions a return receipt can be generated (Computer World, 2005). At this point, materials can be roughly sorted into bins by the return equipment. Inventory wands provide a finer detail of sorting. This tool can also be used to put books into shelf-ready order (Computer World, 2005).
The idea behind RFID is to make bar-codes more enhanced and made more efficient to making “automated processing desirable” (Quantum City Solutions, 2004). Other factors involved with RFID are to improve inventory, the distribution of products, and security to name a few. With new ideas and development occurring from RFID, companies want to get their hands on it. New software is being made and sold to companies to allow a better read from tags. “Cheaper tags are being produced”. The “compliance tagging mandates set requirement about what RFID system” (Quantum City Solutions, 2004) is about. Companies use bar codes for their efficiency with technology. “Smart labels begin RFID tagging” (Quantum City Solutions, 2004) with an RFID chip and antenna that companies allow “to make it possible to print things like text, graphics, and barcodes outside” (Quantum City Solutions, 2004).
With RFID implementation, problems and costs do not make it easy. With RFID, “there can be an increased availability of inventory, loss prevention, reduced loss, and the ability to track products”. From the website of CDO tech, RFID implementation has been broken down into six different categories. The first one is “Effective Planning”. This includes people being involved in the development process and drawing out a map to help in implementing RFID. The second category is “Defining RFID Goals and Objectives”. Part of this would involve knowing the limitations of RFID. The third category is being able to “Understand Business Processes”. This would entail being able to document changes, evaluate, and manage. The fourth category is “End User Involvement”. The fifth category is “IT Involvement”. Being able to use the computer and be able to log in different things from RFID tags is a big thing. The sixth category is “Test in Operational Environment”. Being able to use these tags in different settings is a concern and by testing those in different situations can help find any problems with the RFID tags.
Wal-Mart would be a wonderful company to start using the RFID technology with. RFID was sought after to reduce the risk of discrepancies that occur on a daily basis. RFID would manage what comes into stores a lot faster and in a better time frame, and be able to find merchandise easier, and keep the prices low (McClenahen, 2005). The main concern for consumers is if the RFID is even worth having. Since Wal-Mart invests in small products mostly, the “return on investment for implementing RFID technology” (McClenahen, 2005) doesn’t really make an appearance yet.
A lot of the reason Wal-Mart is going ahead and putting RFID tags on merchandise is to not get behind and to not “lose Wal-Mart as a major customer” (McClenahen, 2005). People have said Wal-Mart’s time has come to experience all that RFID have to offer. Since Wal-Mart started with the “top 100 suppliers” (McClenahen, 2005), the business thought this was the best way to introduce RFID to “Wal-Mart’s supply chain” (McClenahen, 2005). Other factors affecting implementations is cost. For example, Wal-Mart suppliers have spent around $250 million towards the implementation of RFID. With these new RFID tags for Wal-Mart, more can be done to find boxes with products and not lose them. For example, instead of having “$1.2 trillion worth of inventory stuck somewhere” (McClenahen, 2005), RFID can help locate and reduce this risk.
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