2. RFID TECHNOLOGY By: Sunil Patel Anat Krikunets Ge Qu Priya Pathmanathan

3. Agenda Intro to RFID Technology Producer Network (SCM) User Network Complementary Networks Marketing Implications

4. TagsReadersMiddleware “Tag” or “transponder” is the generic term for a radio frequency identification device. RFID tags are made up of a microchip attached to an antenna These tags can be extremely small, about three times the width of a human hair. Readers emit radio waves to query tags within range Receive the radio waves returned by the tags, and convert them into a form that can be processed by a computer system The middleware component is the complex part of RFID implementations The raw data is captured and interpreted into “events” that are relevant to the higher-level applications, such as ERP or CRM systems RFID technology automates item identification through the use of three major components: transponders (tags), readers and middleware What Makes Up an RFID system?

5. Architecture of RFID Tags Source: Forrester Research, Inc. The basic integration architecture of an RFID system involves: a) Tags b) Readers c) A “local server”, which aggregates and interprets data. This component implements logic to make sense out of the large number of events generated by readers. d) An “integration server”, which makes RFID events available to the appropriate application.

6. Components of RFID Tags

7. Types of RFID Tags RFID systems can use: ACTIVE ACTIVEbattery-poweredOr PASSIVE PASSIVE reader-powered tags Active transponders include an internal power source and transmitter from read / write capabilities. Active tags can also perform additional functions, such as monitor temperature, humidity, shock/vibration, and report that information to the reader, along with identity data. Examples: EZPass car toll system Active RFID Tags Passive transponders reflect energy radiated by a reader, meaning they get their power from the RF waves striking them. They have no internal power source of their own. They cost less because they don’t require batteries. Example: ExxonMobil Speedpass Passive RFID Tags

8. RFID Producer Network (SCM) Supply Chain Management Castell’s theory of Information Mode of development: benefit is that the SCN has moved from traditional production to info management Information Management is exponentially expanding

9. RFID Producer Network (SCM) RFID & the IT revolution has made knowledge work more productive through automation Creation of a “New Language” Rich, Relevant, and Timely Information

10. RFID Producer Network (SCM) Benefits of RFID Enable Supply Chain Visibility Reduce Inventory Levels Eliminate Human Errors Demand-Pull rather than Supply-Push

11. User Networks -Retailers New business practice: Using RFID Technology to become cost efficient. Currently being used “passive” or “fixed-location” readers: ability to scan tags up to 15 feet away. Issues:  Poor accuracy of the reader. Causes Data synchronization, and packaging.  Many consumer groups feel that RFID tags will infringe on consumer privacy. Conclusion: Retailers should focus on marketing the RFID tags as non- threatening products that could eventually pass on saving to consumers.

12. Case Study – Wal-Mart Wal-Mart is taking a very strong initiative to adapt the RFID technology. Information Flow – improved efficiencies. Suppliers are volunteering to adapt to the technology

13. User Networks Product Diversion Supplier WM / Replenishment Production Planning DC / Goods Receipt Put-Away Inventory Controls / Storage Real-Time ATP Inventory Case Theft Reduced Out Of Stock Demand Planning Supply Planning Pick, Pack and Ship Physical Counts and Reconciliation Cycle Counts Consign / Hold and X-Doc Inventory Store Level Promotions and Pricing Unit / Item Theft Pay-On-Scan Consumer Understanding Product R&D WIP Inventory Routing Assembly Aging / Quality Control MRP Capacity Planning Product Assortments Targeted Product Recall Process Manufacturing, Warranty and Repair Tracking Anti- Counterfeiting Pallet Tagging Case Tagging Item Tagging BENEFITS 6 months TIME 5+ years Low High

14. Complementary Networks Three key challenges lay ahead for both CGM and Retailer a) Date Standardization b) Data Facilitation. c) Extracting Meaningful Information. 1.EPCglobal – leading an organization to ensure standardization of the EPC. increased efficiency and accuracy through automation increased tracking and security through improved visibility better collaboration by providing a globally standard framework for product information exchange

15. Complementary Networks 2. System integrators: specialize in automatic data collection projects. These firms now exist, due to the inabilities of companies to handle the data 3. Industry Intelligence Interpretations of Data Business Models: A. software solution B. analysis-based with data-warehouse capabilities. C. consulting based integration with data warehousing, and data capturing solutions.

16. RFID Marketing Implications Better understanding of its business environment Facilitates reactions to changes in the market Forecasting demand and supply figures Scope of marketing limited by speed of info flow RFID enables info to flow at network speeds

17. Summary Background RFID Technology Producer Network – Supply Chain Network User Network Complementary Networks Impacts to the Marketing Sector

18. QUESTIONS?