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REV: APRIL 1, 2009
ZEYNEP TON VINCENT DESSAIN MONIKA STACHOWIAK-JOULAIN
RFID at the METRO Group
In early 2004, the METRO Group (Metro), Germany’s biggest retailer, announced its upcoming radio frequency identification (RFID) technology rollout at 250 stores and 10 warehouses, in collaboration with 100 suppliers. The news echoed throughout the retailing community. Previous similar announcements by Wal-Mart and Tesco had made it clear that some in the industry believed that the new technology had the potential to improve the performance of retail supply chains significantly. Among the many potential benefits of this technology were reduced shrink,1 increased product availability, better data quality, and higher labor
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In 1939, the British Royal Air Force developed an “identify friend or foe” transponder that could interpret received radar signals to distinguish friendly aircraft. This was the first example of a device that could automatically and remotely identify itself to another device. RFID worked on the same basic principle: A signal was sent to a transponder which either reflected back a signal (passive system) or broadcast a signal (active system). Research and development in radar and radio-frequency communication systems continued through the 1950s and 1960s. In 1973, an American entrepreneur was awarded a patent for a passive transponder used to unlock a door without a key. When a card with an embedded transponder communicated a signal to a reader near the door, the reader detected a valid identity number stored within the RFID tag and unlocked the door. A similar idea, an automated toll payment system, was commercialized in the mid-1980s. By 2005, the use of RFID had expanded. Many companies used RFID tags in employee badges. Several prisons in the United States used RFID tags to track prisoners. In 2004, Boston Marathon participants’ shoe laces contained RFID tags to track and accurately time the runners and to share their progress with spectators. The American Express Blue credit card started including a feature called ExpressPay that
The researchers at the University of Arkansas noted a 16% reduction in out-of-stocks since Wal-Mart adopted the RFID system into its supply chain (Healthcare Purchasing News 2005). The study also revealed that EPC items were replenished three times faster than comparable items using standard bar coding system. Wal-Mart has been able to use the new system to reduce excess inventory with more effectiveness than the control stores (Healthcare Purchasing News 2005). To this day, using its detailed supply chain management system Wal-Mart has been able to achieve respectable leadership in the retail industry.
Walmart’s approach means frequent, informal cooperation among stores, distribution centres and suppliers and less centralized control. The company’s supply chain allowed consumers to effectively pull merchandise to stores rather than having the company push goods onto shelves by tracking customer purchases and demand. Through the use of universal product codes, implementation of Retail links at the store, use of RFIDs and smart tags, suppliers and manufacturers within the supply chain synchronize their demand forecaste under a collaborative planning, forecasting and replenishment scheme, and every link in the chain was connected through technology that includes a central database, store-level point-of-sale systems, and a satellite network. As per report, there was a 16% reduction in out-of-stocks with the use of RFIDs and pointed out that the products using an electronic product code were replenished three times as fast as items that only used bar code technology. These strategies have made Walmart to be the dominant force over other competitors with information and technology helping its supply chain strategy attain greater
Nowadays, RFID has been used widely in many industrial services, distribution, manufacturing and security. It can help to identify and monitor items (products, people, animals, etc...) wirelessly within a specified range. Although RFID technology dates back to WWII, it has not been used commercially until fairly recently, when Wal-Mart began using it for inventory management. In an attempt to fully integrate the RFID system, thereby substantially saving on logistics and manpower costs, streamlining in-store automatic product management procedure, and raising the company overall operating efficiency Wal-Mart demanded that its top 100 suppliers to affix a RFID tag onto the packaging of the goods they supplied. In an effort to improve business and service quality, save time and effort.
(1A) it’s quite simple how Wal-Mart became a world leader in supply chain management. Wal-Mart’s main focus was to develop cost structures that would allow them to provide low costs friendly everyday prices for all of its customers. They accomplished this by eventually cutting off all middle man distributors. Although this is what ultimately Wal-Mart above the rest of the competition it didn’t work right away in Wal-Mart’s earlier years. Just like any large or small business Wal-Mart went through both its share of trials and tribulations. When Wal-Mart first developed the RFID technology, the company began to greater strides towards become a world
PRADA has long been adopted management information systems into most of their business part including manufacturing, sales, and human resource management. PRADA has Group information technology director who primarily responsible for the management of the Group’s information technology system. In 2000s, by using radio frequency identification (RFID), PRADA tried to controls manufacturing system, inventory, warehousing, distribution, logistics, automatic object tracking and supply chain management. What PRADA expected from RFID technologies were improve the potential benefits of supply chain management through reduction of inventory losses, increase of the efficiency and speed of
Using RFID chips in school is a bad idea because parents are complaining about students privacy. The RFID chips could be tracking the students. According to Michele Tatro, whose daughter received a badge, thinks her child might be getting tracked. She says "I'm not willing for anybody to track me... I don't think my children should be tracked either."(Zetter) In other words, scanners above bathroom doors were found in the school. From the information above this seems like the RFID chips are invading students personal space. Also, the chips were found in classrooms doors too. The school required the students to only wear the chips or badges. It is clear to see why parents were complaining about the RFID chips invading students
The system thus installed is quite reducing the time and cost of travelers since the tag can be deciphered from a distance. User and developer, instead the RFID tag carried by their vehicle does every thing. A commuter traveling through this medium gets to know how much amount has been paid and how much money is left in the tag. It does not require the person to carry cash with him to pay
RFID technology is not only used at gas stations, restaurants, and department but also at
Strong investment in Information technology to streamline information flows and product flows along supply chain(RFID, Retail-Link system)
RFID, or radio frequency identification, is the new system that is replacing the use of barcodes. RFID tags allow users to more quickly obtain information from the object that the RFID tag
Consumers have many choices when deciding where to purchase their goods. While retailer managers are deciding how to win the consumer’s business and increase revenue, they are also constantly trying to figure out ways to reduce costs. Technology helps retail managers improve areas of inventory and supply chain management as well as customer satisfaction and loss prevention (Green, 2002). This paper explains how technology
In 1960s, RFID began to advance which led companies to use the technology for anti-theft purposes. Electronic article surveillance tags uses radio waves to find out whether a customer had paid for the item. When someone tries to walk out with an item that wasn’t paid for, it gets detected by the reader at the door resulting an alarm. In 1973, the first US patent was issued for an active RFID tag. A RFID tag is saved with a unique numbers which gets broadcasted by a card with the transponder. Therefore, the door would unlock when the reader detects the unique number from the RFID tag. This technology was licensed to different companies, mainly door lock makers. The US government started using RFID to track nuclear materials in the 1970s. The department of Agriculture expands the passive RFID technology to mark cows. The cows were fed with various kinds of medicines and hormones and it is so hard to track how many doses each cow received. A passive RFID solved the problem of cows not getting overdosed through the use UHF radio waves. After, smaller transponders were created that could be injected under a cow’s skin. They still use this technology in cows now days. These low frequency transponder is also used in readers for building access. Later, the commercializing of high frequency enabled companies to have faster data transfer and more range. “Today, 13.56 MHz RFID systems are used for access control, payment systems (Mobile Speedpass) and
Radio Frequency Identification (RFID) is a framework that uses radio recurrence to transmit identification wirelessly. Its functionality is much more powerful than bar code system, with which a contacting reader must be used to read the standardized tag. The Food and Drug Administration (FDA) of the United States announced in 2004 to embrace RFID innovation for the identification of fake
The history of RFID can be traced back to the times of World War-II. However, the first practical application of this technology could be found in USA where Mario W. Cardullo received the first patent for an active RFID tag with rewritable memory on 23rd January, 1973.
The world’s economy has increase within the last few decades due to innovation and globalization and international trade. Many organizations have increased economic activity across the world and have shorten the time it takes products to be produced, transported, and received to consumers domestic and internationally. With the advancement of new technology, many companies have expanded their markets by implementing tools and by the customer and government regulation. With the rise of globalization, warehouses have become a more promenade asset and act as holding facilities until the goods are ready for transit. With the emergence of new innovations, warehouses and now been centrally located to attract more transportation activity transforming way logistics companies operate (Williams, O’Neil 2016). Distribution centers are being centrally located close to highways, it allows logistics companies to pick up loads without long delays. The RFID devices allows warehouses to reduce labor cost, improve accurate inventory and improve the relationship with the customers. Boosting RFID technology drives the consumer market which in driven by globalization, regional distribution and new strategies. Transportation has been a major role in integrating global trade. The delivery of goods is now as important as the production of goods. New technology creates more jobs and more competitive completion among organizations and forced companies to engage strategic planning to compete