Evolution, Impacts and Future of Omnichannel retailing

RFID: Future and Legal Implications | 24

( RFID: The Future Implementation and Legal Implication Transportation Operations & Logistics (PUBP 716) [Type the author name] )

Abstract

Radio Frequency Identification Device (RFID) is an automated identification technology that bridges the gap between the physical and the virtual world and is currently used and will be widely used in many fields, such as logistical and supply chain management, transportation management, security, military, anti- counterfeiting, as well as hospital, medicine and health care. As the cost of this new technology falls, it is being implemented by a variety of industries around the world, to take advantage of its improvements in supply chain efficiency and visibility. According to the European Commission, it has been observed that the current legislation with respect to RFID is inadequate and that existing laws should be modified in order to strengthen the protection of personal data and privacy.

Introduction

RFID is a wireless form of automated identification technology that does not require line-of-sight. It has been in use since World War II, when the British used it to identify its warplanes as they approached an airbase. Modern chip manufacturing techniques and the growth of the internet have made RFID technology cheap and practical. The technology can be used to identify, track, sort, or detect a wide variety of objects. RFID tags can be embodied into various kinds of objects and assign a unique digital id to the embodied objects so that objects can be classified, tracked and traced. Both bar-code and RFID have its distinct strength in data collection and application areas. InLogic[footnoteRef:1] has done the comprehensive comparison between RFID and barcode in terms of line of sight, read range, read rate, identification, read/write operation, interference and automation and authors have include the data related to read rate, data capacity, communication protocol, cost, and summarized in Table 1. [1: “RFID vs Barcode Comparison,” accessed October 25, 2014, http://www.inlogic.com/rfid/rfid_vs_barcode.aspx.]

Table 1

	RFID	Barcode
Line of Site	Not required (in most cases)	Required
Read Range	Passive UHF RFID:    - Up to 40 feet (fixed readers)    - Up to 20 feet (handheld readers) Active RFID:    - Up to 100's of feet or more	Several inches up to several feet
Read Rate	10's, 100's or 1000's simultaneously	Only one at a time
Identification	Can uniquely identify each item/asset tagged.	Most barcodes only identify the type of item (UPC Code) but not uniquely.
Read/Write	Many RFID tags are Read/Write	Read only
Technology	RF (Radio Frequency)	Optical (Laser)
Interference	Like the TSA (Transportation Security Administration), some RFID frequencies don't like Metal and Liquids. They can interfere with some RF Frequencies.	Obstructed barcodes cannot be read (dirt covering barcode, torn barcode, etc.)
Automation	Most "fixed" readers don't require human involvement to collect data (automated)	Most barcode scanners require a human to operate (labor intensive)

Components of RFID

RFID systems fundamentally consist of four elements: the RFID tags themselves, the RFID readers, the antennas and choice of radio characteristics, and the computer network (if any) that is used to connect the readers. The RFID tag consists of an integrated circuit (IC) embedded in a thin film medium. Information stored in the memory of the RFID chip is transmitted by the antenna circuit embedded in the RFID inlay via radio frequencies, to an RFID reader. The performance characteristics of the RFID tag will then be determined by factors such as the type of IC used, the read/write capability, the radio frequency, power settings, environment, etc. RFID tags are categorized as either passive or active depending on whether they have an on-board power source or not[footnoteRef:2]. [2: Nandita Srivastava, “RFID Introduction, Present and Future Applications and Security Implications” (Fairfax, Virginia, December 19, 2006).]

· Active tags incorporate a battery to transmit a signal to a reader antenna. These tags either emit a signal at a predefined interval or transmit only when addressed by a reader. Either way, the battery provides the power for RF transmissions, not an inductive or capacitive coupling. As a result of the built-in battery, active tags can operate at a greater distance and at higher data rates, in return for limited life, driven by the longevity of the built in battery, and higher costs. For a lower cost of implementation, passive tags are a more attractive solution.

· Passive tags do not have an integrated power source and are powered from the signal carried by the RFID reader. Generally, these tags are powered by the reader antenna through an antenna located on the tag. The reader’s transmission is coupled to the specially designed antenna through induction or E-field capacitance which generates a small voltage potential. This power is then used by the IC to transmit a signal back to the reader or reflect back a modulated, encoded identification.

· Semi-passive tags have an on-board power source, such as a battery, which is used to run the microchip’s circuitry. However these tags utilize a battery but still operate using backscatter techniques. Tags of this type have greater range than totally passive tags and have the ability to monitor sensor inputs even when they are not in the presence of an RF field.

The information stored on the RFID tag is classified by the characteristics of read and write functionality; (i) read-only, (ii) write-once and (iii) read-write. For Read only tag, information is stored on the chip during the manufacturing process and cannot be changed or erased. The data stored on the chip is basically a unique identifier that looks up a particular item in the host database. Write-once differs from Read-only tag with the specialty that it allows user to program the tag’s memory. For example, when a box/item approaches the conveyor belt, it allows the end user to write the item’s serial number or the part number on the tag for once which cannot be erased. As far as the Read-Write tag is concerned, data can be written or erased by the end user on demand at the point of application. The rewritable tag can be updated/changed number of times, it increases the reusability of the same tag, thus reducing the procurement of new tags and adds flexibility and intelligence to the system. Advanced features include locking, encryption and disabling the RFID tag[footnoteRef:3]. [3: Ibid.]

Most of the times, RFID readers are on and continuously transmitting radio energy thus waiting for the tags that enter their field of operation. However, for some applications, this is unnecessary and could be undesirable in battery-powered devices that need to conserve energy. Thus, it is possible to configure an RFID reader so that it sends the radio pulse only in response to an external event. For example, most electronic toll collection systems have the reader constantly powered up so that every passing car will be recorded. With the diverse nature of economy and the advancement in technology allow to develop different applications that read several tags simultaneously in on RF field, examples are libraries, airline baggage, garment and retail applications.

RFID and Logistics & Supply Chain Industry

The reality of the global supply chain has been realized decades ago. But global supply chain operations are costly and vulnerable to expense-raising inefficiencies, inaccuracies, uncertainties, shrinkage, human error, lost assets and many other problems. In order to reduce cost, improve service and efficiency and increase in ROI from one end of the supply chain to the other. A growing number of organizations including manufacturers, third-party transportation and logistics providers and retailers understand that RFID is becoming a major force in the transformation of global supply chain visibility and operations.

· Reverse Logistics using RFID

Reverse logistics receive increasing attention from both the academic world and industries in recent years. There are a number of reasons for its attention. First of all, the total logistics cost amounted to $862 billion in 1997 and the total cost spent in reverse logistics is enormous that amounted to approximately $35 billion which is around 4% of the total logistics cost in the same year[footnoteRef:4]. Secondly, most companies realize that the total processing cost of returned products is higher than the total manufacturing cost. With ever-rising needs of reverse logistics, firms possessing optimal planning of return routes, inventory and warehouse layouts for returned products are more competitive than the others. [4: C. K. M. Lee and T. M. Chan, “Development of RFID-Based Reverse Logistics System,” Expert Systems with Applications 36, no. 5 (July 2009): 9299–9307, doi:10.1016/j.eswa.2008.12.002.]

Typically, used products are collected and consolidated at designated regional distribution centers, retail collection points before shipping to the centralized return center. In addition, the activities of reverse logistics include collection, sorting, disassembly, repair and disposal for achieving product recovery. Distribution and inventory management are the main concerns for those activities. It is required to consider how the value of returned products can be retained and to realize the difficulties of predicting the uncertain quantities of recovery products. This leads researchers to shift their research direction from forecasting to responsive scheduling[footnoteRef:5]. Reverse logistics is not the symmetrically opposite of forward logistics. The difference between reverse and forward logistics can be interpreted in form of various attributes such as quantity, category, cycle time, stock keeping unit and distribution paths. The five principal processes in the flow of reverse logistics are collection, storage, transportation, inspection and reduction. In the flow of reverse logistics, products are delivered through three transaction points which are Point of Sale (POS), Point of Return (POR) and Point of Exit (POE)[footnoteRef:6]. In order to maximize the return rate of customers who return used products, a RFID-based Reverse Logistics System (RLS) capitalizing the latest computational intelligence and mathematical approaches are designed to check the inventory level of returned products. RFID-based RLS introduces a dynamic logistics information update unit which is characterized by its ability of providing the latest information for logistics practitioners, thus enabling data interchange to take place within the reverse logistics activities. A standardized mechanism of data exchange to facilitate dynamic data conversion, ensuring data compatibility for RFID is deployed. [5: Ibid.] [6: Ibid.]

In the SQL Database, data are analyzed, transformed and stored so that logistics practitioners can make decisions based on those historical data. In order to perform all the tasks a genetic algorithm has been implemented for reversed logistics. Let us take the example of printer’s cartridge. At the manufacturing plant, RFIDs are inserted into cartridges before shipping them to the distributors or customers. Customers who purchased printers or photocopiers are needed to register online and then the registered information will be stored in manufacturer’s centralized database. When customers returned their used cartridges to collection points, RFID readers installed at those collection points read the information of the cartridges and then send it to the centralized database. After verifying its validity, the system sends discount offers in form of e-coupon of repetitive purchase to those customers. Note that the information read by RFID readers includes return time which can help manufacturers realize how often the customers need to replace a cartridge so as to formulate their sales strategies. The benefits of using reverse logistics system and RFID to form an integrated model for optimizing the coverage of product returns. This RFID-RLS helps keep track the quantity of returned products at each collection point so as to determine the economical transportation from collection points to collection centers. The strengths of the system is the ability to find out the coverage and minimize the holding time and depreciating value for the returned products at the same time.

· Shipping/Port activities using RFID

In many transportation and logistics organizations, yard management is the last base station of manual processes. The process is virtually the same and just as inefficient, the world over. Consider a situation when a yard employee moving through the yard on foot or in a vehicle, counting how many pieces of equipment, containers and vehicles are in the yard and noting their location on paper with pen or pencil. It’s a time-intensive and error-prone process that causes a number of visibility-related problems, including redundant trailer moves, shipping delays and costly penalties, yard and gate congestion, product shrinkage, excessive use of refrigeration, wasted fuel and lost time. To address these problems, numerous organizations across the supply chain are turning to RFID systems that automate asset tracking and locating and reduce or eliminate manual processes in these yard-based environments.

Shanghai port is considered as case study to observe the implementation of RFID technology at said port. RFID technology is now being used to increase the efficiency of operations in the Port of Shanghai by speeding the process of checking and managing containers’ vehicles as they pass through the port[footnoteRef:7]. In 2005, RFID applications were scaled up to encompass all the docks and extend to container yard management (www.jiaohai.com/en). RFID tags are attached to the bodies of container trucks. Tags on the truck are used solely to identify the truck and other information such its load. RFID readers are mounted at the port entry gates to collect information from the tags. Mobile RFID readers are used as backup for casual checking. When a container truck with RFID tags passes through the port, digital truck information stored in the tags is collected automatically by readers and uploaded to a database for confirmation through the Internet. Confirmed trucks are permitted to pass through and will receive printed receipts. Data on trucks and arrival/ departure times are recorded in the database. Data on the containers and their contents, including when and from which ship the cargo originated, and when and where it should be placed or transported, are linked to a specific truck through the port information management system. Relevant data on when and where containers are placed and transported are updated in the database at the same time. In the next stage of RFID applications for container yard management, cranes will automatically find, move, offload and upload containers for a certain truck according to data stored in the information system. RFID readers will be mounted on the crane to ensure accurate container offloads or uploads to/from the right truck. The whole scenario is presented in figure 1[footnoteRef:8]. [7: WenJie Wang et al., “RFID Implementation Issues in China: Shanghai Port Case Study,” Journal of Internet Commerce 5, no. 4 (December 2006): 89–103, doi:10.1300/J179v05n04_06.] [8: Ibid.]

Figure 1

It has been indicated that overseas container truck handling time at the Port of Shanghai was reduced approximately 60 percent compared with previous manual methods[footnoteRef:9]. Using RFID to manage containers should not only provide the port with a way of increasing port capacity and security, but also helped to collect the necessary and accurate goods information for a comprehensive port information management system. This has been used for further implementation of automatic real-time monitoring of cargo passing through the port and provided real-time goods information for other parties involved in the global supply chain. RFID applications can facilitate information management for the entire port, and improve operations by sharing data collected with all parties involved in the Web-based RFID information management system, via the Internet. [9: Ibid.]

RFID and Healthcare Services

Hospitals and healthcare facilities are very complex environments and careful attention is required all the time. Doctors and nurses operating in such environment may make mistakes. There is a possibility that wrong medicine or dose it given to a patient. So, the importance of monitoring or administering the dose given to the patient always persists. This monitoring or administering activity requires traceability of the medicine which is a key enabler to enhancing patient safety and improving the quality of care. Hospitals and healthcare facilities are required to have RFID-enabled system for the management of consignment and high value products that require item level traceability. These products which include implantable products such as pacemakers, cardioverter-defibrillators and arterial stents. Thus, reducing waste in the healthcare system and improving its efficiency is therefore a global challenge.

Lean thinking, initially introduced in the automobile manufacturing sector consists in eliminating all sources of waste while continuously increasing the percentage of value to the work. The Virginia Mason Medical Center in Seattle, Washington, may be one of the most cited examples of a healthcare organization that has reviewed its processes according to lean thinking, and witnessed a dramatic improvement in their operations[footnoteRef:10]. It has suggested that RFID technology can enhance actual replenishment methods and lead to lean healthcare by increase the efficiency of hospital processes and reduce various types of waste such as surplus inventory, expired products, and unnecessary staff movements. While a great deal of scientific papers have been written on the impact of RFID technologies on SCM, much of the research on RFID in the healthcare supply chain is still very limited, mostly addresses the future potential of the technology and speaks little of RFID actual use in today’s healthcare supply chains[footnoteRef:11]. [10: Ygal Bendavid, Harold Boeck, and Richard Philippe, “RFID-Enabled Traceability System for Consignment and High Value Products: A Case Study in the Healthcare Sector,” Journal of Medical Systems 36, no. 6 (December 2012): 3473–89, doi:10.1007/s10916-011-9804-0.] [11: Ibid.]

In order to manage high-value products, several hospitals are adopting RFID-enabled real-time inventory management systems such as RFID cabinets or “smart” shelves. Most of the healthcare companies offer such products to help organizations control inventories and keep products in continuous stock. Basically, each cabinet is equipped with a reader and accompanying software that records each transaction such as what was removed, when it was removed, who removed it and (eventually) for which patient the product is intended. Some solutions also include an application for collecting data from RFID personnel identity cards before providing access to the storage cabinet. When integrated with the Hospital Information System (HIS), captured real-time data can feed the clinical documentation system, improve expiration date and recall management and eliminate the need to maintain excess inventory because staff know exactly how many high value products are available in the hospital.

The RFID-enabled system shown in Fig. 2 is composed of: (a) mobile hybrid RFID/bar code reader, (b) RFID printer, (c) tags affixed to consignment/high value item packages, (d) RFID boards, (e) reader and its antenna embedded inside a receptacle to automatically initiate data collection as a package is disposed of during a surgical procedure and (f) a middleware system that analyzes the data and, based on defined business rules, transmits the replenishment order to the hospital’s ERP[footnoteRef:12]. [12: Ibid.]

Figure 2[footnoteRef:13] [13: Ibid.]

The process described as once a product is received, the store employees scan the manufacturer’s barcode on the package to capture related information on the delivered product. The captured data is transferred to the middleware in real time to retrieve specific information such as the internal product number, internal product description, requesting department/ specialty, and the specific storage location where the product needs to be put away. An RFID printer automatically prints a removable self-adhesive label that contains a unique RFID transponder. The information contained on the initial label is associated to the HF RFID Tag Identifier (TID) in a database before the corresponding put away location is assigned. Relevant product information is also printed on the label, including its storage location. The RFID label is then affixed to the product packaging. When delivered to the user department, the product is swiped in front of the RFID board (antenna) to update the application database. The product is then put away in a specific storage location. When the product is required for a specific procedure, the product is picked and given to the doctor to be used. The empty RFID-enabled package is then disposed of in the RFID enabled receptacle directly located in the procedure room, with the product ID recorded in the RFID label automatically captured and transmitted to the middleware hosted by the HIS. When an empty package is subsequently disposed of in the RFID-enabled receptacle, the process is repeated and consistently provides real time management of consumption of supplies related to specific procedures.

RFID based SCM applications in the healthcare sector holds great potential for healthcare performance improvements. The adoption of RFID technology in healthcare is still in infancy stage, compared with that in retailers, supply chain and military units. Given the current state of understanding about RFID and their implementation, it is much less clear that how well these technologies can improve healthcare delivery and what are the critical implementation issues in this special environment[footnoteRef:14]. More customized RFID system for healthcare applications, more institutional support, seamless integration with HIS, satisfactory security measures and mature regulation to protect privacy are necessary to increase acceptance and wide use of RFID in healthcare. [14: Wen Yao, Chao-Hsien Chu, and Zang Li, “The Adoption and Implementation of RFID Technologies in Healthcare: A Literature Review,” Journal of Medical Systems 36, no. 6 (December 2012): 3507–25, doi:10.1007/s10916-011-9789-8.]

RFID and Construction/Civil Works Industry

In industrial sectors such as logistic and supply chain management and manufacturing, RFID technology has been widely implemented. Using RFID technology, real-time traceability and visibility, are important for increasing the efficiency and quality of supply chain operation. However, little attention has been paid to the investigation of RFID technology in construction which is also viewed as an information-based industry in addition to its labor, material, and capital intensive nature[footnoteRef:15]. Among the many challenges for managing information in Construction Project Management (CPM), a particularly keen one is to improve real-time information visibility and traceability. Project managers need to acquire real-time information about materials, men, and machinery so as to make prompt and informed decisions. [15: Weisheng Lu, George Q. Huang, and Heng Li, “Scenarios for Applying RFID Technology in Construction Project Management,” Automation in Construction 20, no. 2 (March 2011): 101–6, doi:10.1016/j.autcon.2010.09.007.]

Managing material and inventory has already been implemented in the construction industry by using RFID technology. The concept and the application method are similar to retail and manufacturing businesses using RFID. The important aspects in the construction industry that need the implementation of RFID technology are quality assurance, management of men and management of machinery. RFID technology can be used to improve construction quality through a number of ways. For example, it was used by the construction company to indicate the depth of piles as there were construction practices that piles did not actually penetrate to the designated depth. In this case, RFID tags can be planted into the pile ends and their radio signals will indicate the depth that the piles have actually penetrated into the ground. RFID can also help anti-counterfeit materials. With RFID tags being applied, each material will have a unique serial number from the manufacturer. Project managers can double-check the materials to ensure the materials used are provided by a qualified supplier and are used appropriately. Once the materials were used, the embedded information can be used in the future such as showing buried assets, or facilities management. By implanting RFID into concrete blocks, it can facilitate the quality test, for example, to indicate the concrete testing samples. The advantage of using RFID tags over the use of paper labels is that the former are set into the concrete and become irremovable unless destroying it. Therefore, it prevents the concrete blocks from unintentionally being replaced.

Construction sites have specific needs for access control; an effective access control system can keep the site, staff, and assets secure; if combined with an attendance checking system, it can provide time and attendance record as a basis for further uses such as allocating works, calculating wage, and so on. Current access control and labor attendance check, undertaken manually by punching in and out their timecards, have many drawbacks. For example, it is time-consuming. In the construction sites there was often a long queue for checking-in after the workers lunched out. Although rare, there are cases that workers cheat the attendance check system. Sometimes, there are disputes over wages which are often calculated on an hourly rate and workers' attendance record. RFID is implemented to develop a more efficient and accurate access control and labor attendance record system. Each worker will have a RFID card which could be integrated with existing card to record their IDs, photos, access authorities, and companies when there is more than one subcontractor. A reader at the entrance/exit of the construction site will retrieve the information, match it, and give or deny access. The system will record the entering and exiting times automatically and this information will be used for calculating wages by a computer system.

Construction safety is a key issue in modern construction project management. RFID can be implemented to improve safety performance on site. Major problem accounting for site accidents is that workers do not wear their safety gears properly, particularly in a hot or humid working environment such as a construction site. RFID tags can be installed in safety gears including safety helmet, fluorescent jacket, safety boots, and belt. A system is to detect whether they have worn the gears properly, for example, by detecting their relative positions in line with strengths of signals. Real-time location information on the whereabouts of people within a site can be very helpful in construction safety management. An application can be developed in a manner that RFID-enabled safety precaution system that could inform workers of potential risks on site using ubiquitous RFID. In this case, a construction site will be divided into different zones, with each having a different color (e.g. red, green, and amber) to indicate the potential dangers. All the potential risks such as fire, electrical, and chemical hazards were registered in RFID tags that are ubiquitous on site. By linking the tags with a RFID reader and an alarming system, it is possible to give workers instructions and precautions of the potential risks.

Construction machinery ranges from large-scale machines such as cranes and excavators to smaller tools such as pneumatic breakers, welding machines, and wrenches. Managing machines and tools efficiently is not only to manage them as assets but also to ensure the smoothness of scheduled construction works. The real-time visibility and traceability of machinery become more important when the construction site is big and the placement of machines and tools becomes more critical[footnoteRef:16]. A machine operation permission system can be developed using RFID technology. In order to start the engine and operation of heavy machines like cranes and excavators, operators have to flash their RFID card in front of a RFID reader installed in the machine operation room. They need to do it again when leaving or stopping the machines. Information such as the operator and operation time is recorded and stored in a central system. This allows a project manager to monitor the utilization history of every machine and to estimate its depreciation. This information will also be very useful for inspection, maintenance, or calculation of quantities. [16: Ibid.]

RFID technology can be implemented in construction project management in improving goals such as time, quality, cost, safety, and environment by applying it in the management of materials, labors, and machinery.

RFID and Retails Services

RFID has become a critical technology for efficiency and effectiveness improvement in production, logistics, and supply chain management. RFID can identify, classify, and manage the flow of materials and information throughout the supply chain wirelessly without human intervention in order to avoid human error. Information of an object’s current location, condition, and history can be stored and retrieved on a real-time basis, giving better visibility for decision making. The main warehousing operations consist of inventory storage, order product mixing, cross-docking, and customer service. The most important of them is inventory management, including storage/retrieval management and inventory control. The inventory management system contains the product information that can be captured by the RFID system includes instance data (e.g., dates of manufacture and expiration), historical data (e.g., departure and arrival times), product group data (e.g., description, dimensions, and selling units), and commercial entity data (e.g., address and telephone number).

RFID developed system can lead to enterprise inventory visibility, which, in turn, leads to reduced costs, improved customer service, increase of inventory accuracy, and decrease of lead time variability[footnoteRef:17]. RFID equipments can be used to collect daily information in distributed location so as to keep track of the product. Retail anti-theft in combination with Electronic Article Surveillance (EAS) tags helps to detect the product within the store by setting as 1 bit and set the bit value as 0 at the checkout counter. Readers detect the presences of the EAS tag in its read zone and trigger alarms to warn of a possible theft attempt[footnoteRef:18]. The readers installed in distribution center or point-of-sales help to collect data to reflect the sales trend, distribution of goods and the inventory at various locations or consignees’ counter. Apart from keep tracking the sold item, it can also help to track the slow movement items so as to alert suppliers about the supply of those items. The sold item or unsold item in the store is detected by RFID interrogator, the database store the data about the sales and inventory record. For example, system administrator can set 100 days as slow movement item in the inventory management system and RFID system can detect the items which are in store or warehouse more than 100 days and report can be generated to shows the slow movement items. As RFID can be applied at the security gate, any items without proper check out and unable the tags will trigger the alarm system so as to avoid the products being stolen. [17: James Chen et al., “Warehouse Management with Lean and RFID Application: A Case Study,” International Journal of Advanced Manufacturing Technology 69, no. 1–4 (October 15, 2013): 531–42, doi:10.1007/s00170-013-5016-8.] [18: C. K. M. Lee et al., “Design and Development of Logistics Workflow Systems for Demand Management with RFID,” Expert Systems with Applications 38, no. 5 (May 2011): 5428–37, doi:10.1016/j.eswa.2010.10.012.]

Having classified the demand distribution of items into three classes which are singular, lumpy and continuous demand, business analysts can formulate replenishment strategy including MRP/DRP, Kanban or reorder point for different types of demand distribution of items[footnoteRef:19]. According to the analytical results if forecast has great variation from the real situation, reorder point may give even better result than material requirement planning and the policy of reorder point should be adopted in the management of singular class. For lumpy orders, collaborative, planning, forecasting and replenishment (CPFR) is suggested so as to have better management of demand and supply. CPFR involves exchanging forecast and sales information between partners in the supply chain in order to rectify any forecast problems before transaction of orders. For continuous orders, the vendor management inventory is adopted and inventory management rules are set between retailers and suppliers. [19: Ibid.]

The benefits of the RFID based system include power control over inventory so as to respond to customer’s needs quickly. The improvement in efficiency will not simply come because the RFID devices can move data faster. The interlinking of the system, which will lead to better data transmission and recognize the demand pattern, has beneficial effect on the entire supply network.

RFID and Future Technology

RFID is proven technology providing far-reaching benefits for transportation and logistics organizations. While many of these businesses are successfully using systems for asset management, warehouse and yard management, the future of RFID goes far beyond internal closed loop solutions.

Cloud Computing Technology and RFID

Cloud computing software and application development platform, on the one hand, provide a platform, to build and run the software services at the same time, on the other hand, it is responsible for the management of all hardware and software resources, through the Internet to provide on-demand, based on Web software solutions. In cloud computing platform of general data through the Internet transmission, data by the cloud service management need to keep the security of the data, including the calculation and data backup of the data on the server. At present, the Amazon, Google, IBM, Microsoft, Sun companies such as cloud computing infrastructure or cloud computing platform, open source organizations and academic circles have put forward many cloud computing system or platform[footnoteRef:20]. Cloud computing can calculate the mass information storage and low cost and high performance to solve the problem of infinite growth, allows the IT infrastructure to realize resource and service, so that users can customize according to need, thus changing the traditional IT infrastructure delivery and payment. [20: Zhen Liu, Xiao Wang, and Xiaoqin Ma, “Building Intelligent Logistics System Based on Internet of Things RFID in Platform of Cloud Computing,” Journal of Chemical & Pharmaceutical Research 6, no. 6 (June 2014): 772–78.]

Cloud computing systems are common in many ways, but in fact each system still has very big different, it also calculates the user or developer to cloud brought different experience. RFID reader is a wireless transmitting and receiving equipment, mainly including the RF module and digital signal processing unit two part of read and write operations, label, reader demodulate and decode the received radio frequency signal, and then sent to the application system through network. So it has a strong ability of storage and computation. The application of RFID technology can greatly improve the operation efficiency of logistics, such as speeding up the goods out of storage time, reduce the field operation personnel, realize accurate inventory fast and accurate positioning, cargo tracking.

The RFID tag has the advantages of small volume, large capacity, long life and reusable characteristics, can support fast read and write, multi object recognition, non visual recognition, mobile recognition, positioning and long-term follow-up management. The hardware platform mainly provides user virtual computing resources, storage resources, cyber source. All hardware facilities including servers, network equipment, storage equipment, it is cloud computing data center. According to their own needs, user dynamic use of these resources, and to pay the service fee according to usage. In the virtual technology to design a hardware platform is very important, it can share a large hardware facilities allow multiple operating system, the hardware platform provider can provide all kinds of cloud platform hardware requirements. Virtual technology common charges is a free open source technology to the cloud platform. It provides service development tools and software (such as: database, distributed operating system, etc.) to help the developers to develop service cloud services. In addition, it is also a cloud service platform. Therefore, the cloud platform needs to have the Java runtime, Web2.0 application runtime, all kinds of middleware[footnoteRef:21]. [21: Ibid.]

Cloud computing operating system usually contains the following modules: modules large-scale infrastructure software and hardware management, virtual management of computing, distributed file system, business / resource scheduling management, safety management control. Build intelligent logistics system based on Internet of things RFID with cloud computing is described in figure 3. In simple terms, the cloud operating system has the following functions, one is treated as the control of a few, can manage and drive the massive server, storage hardware, the hardware resource logic of a data center is integrated into a server; two is to provide a unified, standard for cloud application software interface is calculated; three task management of massive and resource allocation[footnoteRef:22]. [22: Ibid.]

Figure 3[footnoteRef:23] [23: Ibid.]

The EPC code is stored in the RFID tag, can realize the identification of the real target, some real-time dynamic information at the same time label also stores the real target and may be updated, high-level information processing software can pass the RFID reader to identify, transmission and query of the target information. RFID has the advantages of read and write long distance, high security, large amount of stored data, the use of harsh environment, long service life etc. RFID can be used to track and manage almost all physical objects, tracking and other fields, and has a very important role to improve the intelligent level of logistics. Through virtualization, cloud computing platform can be very flexible to meet various needs, not by hardware limitations. Computing hardware platform in the realization of their cloud, which takes into account the storage structure, which not only need to consider the storage capacity, more important is the need to consider disk data read and write speed. Data needs to be distributed to multiple disks, and through the multiple simultaneous disk read and write in order to improve the speed of it.

Cloud computing can realize the compatibility of various heterogeneous hardware and software resources on the basis of dynamic circulation, to achieve resource. So, the cloud computing technology can resolve the problem of integration of different middleware and software.

Drone Technology using RFID

A United Arab Emirates company operates multiple steel yards in Dubai, has taken radio frequency identification technology to new heights, through its use of an RFID reader mounted on a small unmanned aerial vehicle (UAV), commonly called a drone. The Steel Yard Autonomous Tracking solution, provided by UAE technology services startup Exponent Technology Services, enables Age Steel to quickly and accurately track the locations of pipes, plates and other metal products stored onsite[footnoteRef:24]. Age Steel imports structural steel products, such as pipes, plates, coils, angles and hot-rolled bars, and sells them for use on construction projects throughout the Middle East. The company operates three yards in Dubai and a fourth in Saudi Arabia, and the steel pieces at each location are stored in bundles. [24: Claire Swedberg, “RFID-Reading Drone Tracks Structural Steel Products in Storage Yard - RFID Journal,” RFID Journal, accessed October 24, 2014, http://www.rfidjournal.com/articles/view?12209.]

According to the company, sorting, locating, inventory count and searching for item manually is a time-consuming and highly unpleasant process, since temperatures in the yards typically reach 45 to 50 degrees Celsius (113 degrees to 122 degrees Fahrenheit). If the product could not be located, the company would have to go to one of its own local competitors and buy the same item from them at an elevated price meaning that there would typically be no profit, or even a loss in the sale. The passive ultrahigh-frequency (UHF) RFID tags are attached to the bundles pipes, plates, coils, angles and hot-rolled bars. The RFID reader is mounted on drone to read the passive UHF RFID tags. It realized that it required an automated way in which to collect RFID tag-read data within the yard. This technology allows faster location of inventory, which will speed up the time it takes to process an order, as the UAV will provide daily inventory checks. Less time will be taken trying to locate a particular item, and thus more stock can be processed with the same resources.

RFID and Security Issues

A widely employed pervasive technology is represented by RFID, which is used in various sectors, e.g. supply chain management and internal traceability management. A typical RFID system is made up of a reader, which generates an electromagnetic field, and some passive tags without an own voltage supply. They can be read only if they are in the reading range of a reader which supplies the power required through a coupling unit. The RFID tags hold a memory that stores an unambiguous identification code (ID) and potentially a rewritable user memory. RFID technology is mainly used in order to identify objects by matching them with tags. The Automatic Identification and Data Capture (AIDC) based on RFID provides many benefits, such as time saving and great accuracy, at a reduced cost. However, RFID tags are also used for other kinds of operations, such as localization, data storing, and personal identification.

A limitation to the use of RFIDs is represented by the presence of metal or liquid that can create noise to the electromagnetic field, disturbing or stopping the transmission[footnoteRef:25]. Tags can have read-only or read and write memory. The rewritable memories open many application opportunities, but they are exposed to malicious writing actions. RFID technology exposes tags to two kinds of possible accesses: physical access, when an entity gets in touch with the tag; RF communication access, by means of the tag communication protocol, potentially without knowledge of the owner of the tag[footnoteRef:26]. The first case seems more dangerous, since adversaries have time and means to perform strong attacks. However, the possible damages due to tampering actions are limited, since hardly they can be performed without knowledge of the tag owner. Instead, RF attacks can generate troubles, since adversaries could alter data on rewritable memory tags that will be reused, generating possible mistakes. [25: Filippo Gandino, Bartolomeo Montrucchio, and Maurizio Rebaudengo, “Tampering in RFID: A Survey on Risks and Defenses,” Mobile Networks & Applications 15, no. 4 (August 2010): 502–16, doi:10.1007/s11036-009-0209-y.] [26: Ibid.]

A considerable tampering subject is the hardware tampering. Tampering actions may aim at damaging the device or at altering the system accessing to the code in order to reprogram it with a malicious one able to execute insider attacks. The tamper-resistant hardware may avoid unauthorized access to the running code and it may resist to malicious actions such as physical penetration, and temperature manipulation. Various applications employ tamper-resistant hardware, among which several approaches for authentication and integrity checking in mobile systems[footnoteRef:27]. However, the use of tamper-resistant hardware requires high costs, which are often too expensive for pervasive environments. In wireless sensor networks a tampered node with a malicious running program is a critical threat. Hardware tampering attacks to RFID tags have not been reported, and it is not yet directly handled by RFID security approaches for low cost RFID tags. The main motivation is that tags are often vulnerable to simpler and faster RF attacks, which can be applied also without physical access. [27: Ibid.]

The most well-known data tampering attacks control data, and the main defense against it is the control flow monitoring for reaching tamper-evidence. However, tampering with other kinds of data such as user identity data, configuration data, user input data, and decision-making data, is also dangerous. Some solutions were proposed, such as a tamper-evident compiler and micro-architecture collaboration framework to detect memory tampering. A further threat is the tampering with application data, involving mistakes in the production flow, denial of service, incoherence in the information system, and exposure to opponent attacks. This kind of attack is especially dangerous for RFID systems, since one of the main RFID applications is the automatic identification for database real-time updating[footnoteRef:28]. [28: Ibid.]

In order to analyze the feasibility of anti-tampering approaches, their requirements have to be considered. Authentication and privacy protection approaches are based on messages encrypted with public key cryptography and embedded in the tag memory. The requirements for the readers and the middleware are the easiest to satisfy, adding additional software modules to the middleware, or implementing their functionalities directly on the reader, also when these modules require relevant computational effort. Requirements that modify the communication standards often involve longer communication sessions and generate incompatibility with standard devices. However, the only approach that has special requirements for communication is the Challenge-Response Authentication, which is naturally limited to authorized tags and readers. Each approach presents some requirements for RFID tags, which are the most difficult to satisfy. The Challenge-Response Authentication and the Write activity scheme present requirements not addressed by the standards, which involve high cost tags with additional hardware modules[footnoteRef:29]. [29: Ibid.]

Conclusively, the main open issues for tamper-resistant solutions are represented by the lack of cheap and robust schemes applicable to tags with rewritable memory. Tamper-evident approaches lack of robust schemes based on low cost tags, and of schemes usable for a generic application. Especially data copying requires to be carefully managed by future tamper-evident approaches. Watermarking-based schemes seem a quite effective low cost solution, but it should be extended to tags with different memory organizations.

RFID and Legal Implications

With the advent of technology, it is evident that society is heavily relied on it. There are positive aspects of the technology which helped society a lot but some externalities are still there. Those externalities must be taken care of to avoid further damage to the society. According to Lessig, the tools are: law, norms, market and architecture that will restrict the technology from its negative externalities[footnoteRef:30]. It has been suggested regulating RFID with a multi-spectral approach that includes, for instance, changes in law, furthering of guidance and self-regulation, implementation of technical measures or improvement of education. [30: Daniel Ronzani, “Modality Mix of RFID Regulation,” Journal of International Commercial Law & Technology 3, no. 4 (October 2008): 222–32.]

In 2006 the European Commission conducted several workshops and a public consultation process on RFID. The European Commission noted that although most stakeholders are still being unaware of the potential and risk of RFID. The scope of the 2006 consultation process was to advance the debate on RFID objectively and to provide a balanced overview of the necessary action on RFID issues. In general, the survey showed that two-thirds of the 2190 respondents of the 2006 RFID consultation feel that the current legislation is inadequate and that existing laws should be modified in order to strengthen the protection of personal data and privacy. Specifically on security and privacy issues, more than half of the respondents report that some kind of legislation regulating RFID should b considered[footnoteRef:31]. It is suggested that law alone cannot fulfill the required legal implications, so three other modalities i.e. norms, markets and architecture regulate together and that, depending on the context to be regulated, there is a trade-off between them. [31: Ibid.]

Let us have a look that how each modality can affect the negative externality of RFID. Law typically regulates behavior by statutes. Law is regulated, controlled and enforced by government authorities. Mostly there will be a constitutional mandate to enact statutes. The statutes can envision further delegation to ordinances or regulations. The European Commission, for example, has enacted directives that need to be implemented into national law of EU member states. Norms are non-legal rules that certain individuals feel compelled to follow despite the lack of formal legal sanctions; or stated positively, they are non-legal rules that certain individuals follow because they benefit from doing so. Both modalities, law and norms, threaten punishment ex post. But whereas the regulation of law is centralized at authority level, the regulation by norms is decentralized by and to a community. Market regulates behavior by different influences, such as demand and supply that is reflected in price. Prices can constrain access. Lower RFID tag costs and improved RFID tag performance have opened new markets and applications for RFID. Industrial entities, for instance, are bringing RFID to market and many small and medium-sized entities have successfully deployed RFID. However, mass implementation is price-driven and it is generally assumed that a cost reduction of passive RFID tags to less than 1 cent is necessary for a large scale adoption. Architecture also regulates in the form of shaping one’s behavior. It is argued that RFID architecture is divided into physics and systems (artefacts). On the one hand, RFID architecture has specific characteristics imposed by the physics of radio waves that direct and limit the way RFID technology can be implemented and used. On the other hand, RFID architecture includes the structure of IT systems, like a multi-tier RFID system comprising the RFID reader, middleware and the back-end enterprise system.

Now let us have a closer look at the externalities which mostly consumers are facing. The most important one is the privacy and data protection measures to be taken by the RFID application operator. In order to mitigate the risk associated with RFID use in terms of privacy and data protection, RFID application operators need to conduct a privacy impact assessment prior to the implementation of RFID applications. Secondly, the RFID application operator and the component provider need to take the appropriate technical and organizational measures to mitigate the risk where it cannot be excluded that processed data is related to an identifiable natural person. And lastly, there is an option for the RFID application operator’s privacy impact assessment to be made public. Such publication could probably be interpreted under certain national legislations as being a representation and warranty by the issuing entity. It has also been suggested that trade or professional associations or organizations involved in the RFID value chain to draw up specific codes of conduct on RFID[footnoteRef:32]. [32: Ibid.]

The next externality is information security risk management. In order to mitigate the risk associated with this externality, it is suggested that the necessity of a state of the art security management and application-specific guidelines with best available techniques to achieve a coherent internal market approach. The way forward is, the controller must implement appropriate technical and organizational measures to protect personal data against various processes and incidents, including unauthorized disclosure or access[footnoteRef:33]. This suggestion covers both market and architecture modalities of the society. Market will drive the manufacture to issue application specific guidelines and implement technical and organizational measures to protect personal data. [33: Ibid.]

The other important externality is non-awareness of the risks associated with the use of RFID technology. To mitigate the risk, both the general public and enterprises, especially SMEs, be informed about the benefits and risks of RFID technology. Two-thirds of all respondents of the 2006 public consultation view the development of awareness raising campaigns to educate consumers as way to eliminate or greatly reduce the concerns of security and privacy of RFID applications[footnoteRef:34]. This suggestion emphasizes the modalities; norms and market. Norm will let the market to force the manufacturer of RFID to run public awareness campaign about the positive and negative impacts of the RFID technology. [34: Ibid.]

From the above discussion, it can be suggested that the negative externalities associated with the use of RFID technology can be mitigated by the effective use of law, norm, market and architecture modalities. Some suggestion only requires law to be implemented to cast way the negative effect. While other suggests that a mix of modalities i.e. norms and market or norms and architecture or both can diminish the risk associated with the use of RFID.

Conclusion

With advent of new technology like Radio Frequency Identification (RFID) organizations keep track and trace of the moving objects within the logistics network. RFID is used for physical distribution and planning including inventory control, warehousing, material handling and order processing. RFID is advocated by Wal-Mart for promoting the use of electronic code to streamline the supply chain and Wal-Mart requests suppliers to attach tag to each pallet of goods in distribution center and warehouse. The invention of smart-shelf alerts practitioners to replenish the goods instantly when the goods are out of stock. This invention system can greatly reduce the error between the inventory record and physical record so as to reduce the number of cycle count and increase the effectiveness of inventory management. RFID, which is applied to manage the movement of material handling equipment such as fork-truck, results in increasing efficiency of picking processes by 15–20%[footnoteRef:35]. The application of RFID for point of sales can greatly reduce the processing time at cashiers and further reduce the queuing time. RFID has been prompted to have strategic implementation with concerned of data management, system integration and security. [35: Lee et al., “Design and Development of Logistics Workflow Systems for Demand Management with RFID.”]

As discussed, the RFID-based Reverse Logistics System using a computational intelligence technique and RFID to form an integrated model for optimizing the coverage of product returns. This infrastructure helps keep track the quantity of returned products at each collection point so as to determine the economical transportation from collection points to collection centers. Similarly, RFID technology and information management are leading tools that are imperative for the smooth running of yard/shipping activities at port.

RFID not only impacted logistics and supply chain industry. But it also helped to improve the efficiency and efficacy of Hospitals and healthcare service providers. The adoption of RFID technology in healthcare is still in infancy stage, compared with that in retailers, supply chain and military units. Given the current state of understanding about RFID and their implementation, it is more clear that how well these technologies can improve healthcare delivery and traceability of products. Moreover, construction industry is also benefited by RFID. It not only helps in tracking the use of tools and heavy machinery at site. But it also helps in managing the labor and material at site.

In order to get the full fruits of this technology, the externalities associated with RFID should also be addressed. All the four modalities of society; law, norms, architecture and market can play its role to mitigate the risks associated with this technology. And above all, the future of RFID technology is very bright. We can use drone technology to perform various activities like cycle count, audit trails, warehouse management etc. In the future, government may install RFID chip in the passports to increase the immigration and border security. In couple of years, companies are ready to launch “smart appliance” such as Refrigerators that automatically create shopping lists, Closets that tell you what clothes you have available, and search the Web for advice on current styles etc. Hence, the use of RFID technology will ease the life of an ordinary man in an economical way.

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