RFID Technology

During my internship at Paragon I had the opportunity to work with RFID (Radio Frequency Identification). With no knowledge in the field, I had to study this technology and do research on the subject. The capabilities and potential of this technology have fascinated me. During Paragon\’s RFID project, I found that if combined with the right tools, it could lead to greater efficiencies and productivity while reducing costs, which is of interest to companies that need to maintain their competitive advantage. I chose to focus this paper on its contribution to logistics for companies, because it is a promising use of this technology. A massive adoption of RFID technologies had been anticipated, but it was not as fast as expected. Therefore we can ask ourselves why this has been delayed and what will be the future of RFID.

I. What is RFID ? The concept of RFID appeared in the 1940s with a system called \”Identify: Friend or Foe\” which allowed to identify aircrafts in flight during the Second World War using a communication between their transponders and radars. Until the end of the 1970s the use of RFID remained restricted to a military use. It will then extend to the private sector, particularly in the identification of livestock and in the production lines of car manufacturers. In the 1980s European and American companies began to manufacture increasingly miniaturized RFID tags. RFID technology will experience an explosion in the 2000s with massive sales of readers, encoders and tags in almost every industrial sectors. After 2010 RFID chips have become widespread in the surveillance industry. Currently the use of RFID is starting to normalize. Some objects are identified thanks to it from their place of manufacture to their point of sale. RFID uses radio frequencies to automatically identify tagged objects using an interrogator. In order to communicate with this interrogator the RFID tags have an electronic chip and an antenna forming a set called \”inlay\”. The data is transmitted by electromagnetic energy transfer between the tag and the interrogator and depends on the need. It can be a unique identifier or any other information deemed useful by the user. Memory space can be added to save additional data. Before choosing its equipment, a company will have to think about its needs. It will have to identify the quantity, size, value, position, distance and composition of the objects,

but also the circumstances in which these objects will have to be scanned, if this will be done continuously and during the full life of the objects or not. When answering these questions, the company will be able to choose among the solutions offered.

There are three types of RFID tags : the passive RFID tag, the most widely used on the market, which uses the interrogator\’s wave to feed its electronic circuit, the semi-active RFID tag which works on the same principle, but which is assisted by a battery acting as an 1 on-board power supply for the electronic circuit of the tag or sensors connected to the base circuit and finally, the active RFID tag which is autonomous and has its own radiofrequency transmitter and a power source in order to read the chip at a greater distance. The tags are then classified according to the types previously mentioned and the possibility or not of rewriting on the memory. Interrogators are also part of this classification. There are different frequency domains for RFID tags : the low frequency between 125 and 134.2 kHz with a range of about 50 cm, the high frequency corresponding to 13.56 MHz with a maximum range of 1 m, the ultra high frequency between 860 and 960 MHz with a range of about 3 to 10 m and finally, the super high frequency between 2.45 and 5.8 GHz with a range of 1 m. Ultra high frequency and super high frequency tags are sensitive to metallic or liquid environments During my internship the tags read were passive. They cost a little less than sixty cents per unit. They were operating at ultra high frequency. These tags are suitable for long distance reading. They were in barcode labels on the products. RFID chips can be found in different elements such as cards and badges, labels and stickers, wristbands, keychains and RFID tags or subcutaneous chips. The price of tags depends on the type of environment in which they operate, their size, the quantities requested, their use and the need for additional memory. There are several types of readers, some just read data saved during the creation of the chip and others can modify this data. The readers are divided into two categories, the mobile readers and the fixed readers, the latter being the most widespread. The fixed readers may take the form of a gantry, a tunnel or a terminal placed remotely and allow to count the containers or their contents and track these containers.

They offer the ability to locate an item in stock, perform a quick inventory and direct the right products to the right addresses. Mobile readers are portable terminals that can scan RFID tags with the intervention of an operator. Innovations have been made in the design of these mobile readers. Indeed an intelligent glove equipped with an RFID reader was designed by a student working at a car manufacturer to allow manufacturing and logistics staff to work faster, safer and easier. The type of reader will be chosen according to the frequency of the radio waves emitted by the RFID antenna integrated in the tag and the reading distance. As for RFID tags there are several frequencies. The range will depend on both the tag and the reader, we can reach a hundred meters. With the evolution of the technology other types of readers are imagined as the drone created by the MIT which does not embark an RFID reader for reasons of weight but serves as a relay to the signals emitted by the RFID chips. This drone makes it possible to read labels at tens of meters and to carry out a continuous surveillance, to avoid the disparities of stocks and to better organize the location of the objects. 2 In everyday life we may be hearing more about Near Field Communication (NFC), since it is more visible because of its availability on most smartphones and its presence in the NFC tags of our clothes, in our bank cards, in our transport cards, etc. NFC is a subset of RFID, but it is designed to achieve a simple, fast, intuitive and secure form of data exchange between two electronic devices. It is a short-distance communication technique that is easy to implement and low in energy consumption. NFC devices should be within inches of each other to communicate. NFC is therefore not suitable for logistics that require larger communication distances

II. The use of RFID in logistics In logistics, RFID allows goods to be tracked at different stages of the supply chain using sensors on containers, pallets, boxes and/or units. RFID is also quite used in the textile sector where labels are affixed from the manufacturing stage to avoid the risk of falsification. A. The markdown One of the motivations for setting up an RFID system in logistics is the fight against markdown. Indeed, according to a 2006 study the average cost of lost, broken, expired and stolen products was estimated at about € 24 billion in Europe. Although this study is not recent, it gives an idea of the importance of markdown in companies. These losses are realized in the sales areas (71.5%), in the premises of the manufacturers (23.5%) and in the distribution centers (5%). They come from external thefts (38%), internal thefts (28%), administrative errors (27%) and voluntary fraud (7%). RFID could help fight this markdown by tracking products throughout the supply chain. B. The successes of its implementation Several companies have adopted RFID technology and have had some success. Decathlon has universalized its use in 2014. This generalization has been facilitated by the fact that this company sells mainly products of its own brand, which allowed a marking at source. For other products it tried to make its suppliers aware of the usefulness of RFID tagging. The gains made by this company were felt throughout the supply chain, both in terms of logistics and the stores themselves. Employees take less time to complete inventories or revenue collection and RFID technology also serves as an anti-theft device. It was a heavy investment that required the support of management. The company wanted, by setting up RFID, to increase its turnover thanks to an improvement in the availability of products with more frequent inventories. Decathlon\’s RFID project appears to be a success as it has not encountered any opposition from its employees, management or staff, and has achieved its goal. Another example of success in implementing RFID technology is the case of Macy\’s, which launched its initiative in 2011. The idea of this company was to maintain an accurate inventory of its items to allow redeployment in stores or distribution centers according to customer needs, which would lead to increased sales of items through improved availability. 3 Macy\’s goal is to label 100% of its products in order to track them through its supply chain. To achieve this, the company asked all of its suppliers to tag their products with passive RFID tags.

The result of this experiment is an increase in sales on several products, a decrease in cases of out of stock and an improvement in the availability of items. Macy\’s RFID project is not over yet, but is on track. However the company did not wish to disclose the figures of its profits. Finally, we can mention the “Laboratoire français du Fractionnement et des Biotechnologies” (LFB) which wanted to ensure a better monitoring of all the plasma bags between their establishment and the centers of the “Etablissement Français du sang” (EFS). RFID tags have been affixed to the plasma pockets to manage, store and track them. The labeling of plasma bags with RFID requiring authorization from the “Agence Nationale de Sécurité du Médicament”, a study had to be performed to verify that the critical data remained intact despite storage conditions at very low temperatures and toxicological studies have been done to control the possible interactions between raw material and RFID technology. According to the EFS and the LFB, the new solution has made it possible to automate the process of sorting units, to increase productivity and to improve efficiency in receiving and recording plasma. In this context, RFID technology makes it possible to improve the safety and quality of blood products and to reduce the handling of these products by the staff. The RFID projects mentioned above are considered as success stories, but not all companies that have launched RFID projects have been so fortunate. C. The failures of its implementation Some companies have failed to implement the desired RFID system, such as JC Penney which wanted to replace its Electronic Article Surveillance (EAS) with RFID. The implementation of the RFID system has caused the increase in thefts in its stores and significant financial losses. The project was originally intended for traditional inventory management purposes. The goal was also to allow customers to check out faster with self-help stations. The company experienced quite a fall in sales and a declining cash balance, which did not allow it to implement its strategy. It has stopped the labeling of its products and has retained the markings already achieved for certain categories. Significant investment was needed to obtain the full economic benefits of deploying RFID, but JC Penney ran out of funds. The complete product labeling project has therefore been postponed. The thefts were explained by the absence of RFID portals at the exit of the stores, by the loss of the dissuasive effect of the EAS tags and by a more lenient product return policy. It has been argued that there has also been interferences between the EAS system and the RFID system, but no evidence has been provided to support this theory. JC Penney\’s project failed due to poor project management with underestimation of costs and changes in processes. 

The Walmart project appears more like a partial failure. Walmart was one of the first retail companies to want to implement RFID technology. It asked her suppliers to place RFID tags on pallets and boxes to track them in the supply chain. However this strategy was largely abandoned a few years later and replaced by a strategy focused on shipments to specific stores, promotional displays and tests of the impact of RFID in improving the management of categories in selected domains. Some suppliers refused to label their products and in response, Walmart decided to impose fines for all unmarked products. The difficulties encountered by Walmart are related to the fact that it did not succeed in obtaining the adhesion of its partners to the RFID project, because it could not explain to them the benefits that it would bring them. As a result suppliers saw only a non-return investment. Walmart\’s initial goal was to increase the transparency of its supply chain, help minimize costs and labor, and strengthen inventory control. The obstacle created by its collaborators has jeopardized Walmart\’s RFID project. For this reason it can not be considered as a total success. D. The RFID project of Paragon The goal of the RFID project was to facilitate the processing of production orders, to save time in this process and thus to reduce the costs associated with this operation. Paragon\’s RFID system allows for a compliance check between a prep sheet and the contents of a pallet without the need to scan each product. To implement this new system it was necessary to review the production order preparation process, change the way of working and reorganize the workstations. The benefits of this implementation of RFID were felt in terms of scan time of each pallet which was almost divided by twenty, number of pallets scanned in the year that has been multiplied by five, average number of pallets scanned by the day and error rate which has been reduced to zero. The RFID system also detected badly encoded RFID chips. This project is therefore considered as a success, but unlike the other projects presented above it was a small-scale implementation which facilitated its execution. III. The result of this use in logistics A. The benefits for companies RFID improves the accuracy of inventory from an average of 65% to more than 95%. With this high accuracy companies can expect to increase sales if they use the data they collect to improve their operations and processes. RFID is an investment that can reduce the costs of a supply chain if its implementation within the company is carried out with care and reflection. The various employee tasks that can be performed using RFID will be executed in a short time since it will no longer be necessary to manually enter data, scan all barcodes or check each incoming and outgoing product. 

The inventory accuracy offered by RFID will allow for better product availability and a better overview of stock levels. Thanks to RFID it is easier to locate the items and the time spent doing the inventory will be decreased. On-the-fly reading, remote reading, burst reading, and the ability to carry information in the tag\’s memory are features of RFID that have the potential to improve logistics in businesses. Indeed, thanks to them it is possible to recover the data on the RFID chips very quickly compared to other methods such as reading barcodes. In addition each product can be tracked individually by means of a unique identifier registered on the microchip or other storage device, which is useful for finding a lost or defective product for example. With this technology inventory data can be updated in real time when combined with wireless communication systems and real-time inventory management systems. Inventory figures will therefore necessarily be up-to-date and can be sent to the various people who need information about it within the company. RFID can also detect theft or reroute products in case of error. In concrete terms RFID technology will enable businesses to increase productivity and reduce costs through more effective identification and tracking. It will provide better asset control and the ability to optimize resource utilization and demand planning. The turnover may also be increased thanks to a decrease in costly uncertainties such as the loss of sales due to a stock-out. However, while potentially beneficial for businesses, RFID has some disadvantages that could scare those wishing to invest in this technology. B. The limits of RFID technology Some limits are related to RFID technology itself. Indeed some materials