What are the Benefits and Limitations of RFID Technology?

Radio-Frequency Identification (RFID) is a set of technologies for identifying objects. The tags are generally affixed to the objects, which then can be detected using a scanner.

The tags are small enough to be read with conventional sensors, so the technology is suitable for indoor and outdoor applications. There are two different types of tags: active and passive. Active tags require a power source to operate, whereas passive tags are powered by the energy transmitted from the scanner.

RFID tags generally fall into one of two categories:

• Low-frequency (LF) tags operate at around 125KHz to 135KHz. Because they work on a higher frequency, they can pass through materials, such as clothing and plastic, and can be read in water.
• High-frequency (HF) tags operate at around 500MHz to 2.4GHz. HF tags are generally smaller and more durable than LF tags because they can use in harsh environments. HF tags can transmit the tag’s unique ID number back to the scanner, whereas LF tags require a more complex circuit that can store the ID number internally.

RFID technology is an automated, wireless and automatic identification system in which devices carry a microchip on a small tag or a sticker attached to or incorporated into an object. The methods are used in manufacturing, logistics, retail, security, insurance, healthcare, etc. They allow things to be identified automatically, and the information about the objects is stored in an electronic database for later use. These databases can then be linked to the manufacturer of the object or the object’s owner.

I. RFID Advantages

Manufacturing

The most obvious and familiar application for this technology is its use in manufacturing processes and manufacturing control. It can be used to track products throughout the manufacturing process and to trace them back to their point of origin.

Logistics

In logistics, RFID can be used to track goods through various stages of the distribution chain and even back to the point of sale. It can help businesses ensure they comply with trade, transportation, and packaging regulations.

Use of RFID in the Retail Sector

RFID can be used for inventory management. It provides a more secure way to manage inventory than barcode technology by reading the RFID tag at the point of sale. The information captured about the item or items on the tag can be used to track product flow, detect out-of-stock, find potential product shortages and assist with in-store promotions.

Security

This is one of the newer applications of RFID technology. It is an excellent way to reduce security breaches. Keeping a record of where and when objects have been used makes it very difficult for thieves to sell the things.

Integration with Supply Chain Management

A company’s supply chain should cut production time by automating as much as feasible. It lowers human mistakes and costs less than human labour. Using RFID at retailers like Wal-Mart and Target and smaller businesses can improve the shopping experience by increasing inventory and store expertise.

RFID lets suppliers see their packages in real-time, ensuring that the appropriate delivery gets to the right place. Manufacturers and suppliers save money because RFID reduces time spent inventorying and tracking items. Using RFID allows suppliers and manufacturers to customise items faster. RFID may also provide suppliers with vital information.

The secondary benefit of RFID is that the promotions that merchandisers spend a lot of money to set up are often left in the stock room for too long or are improperly placed. Now merchandisers and vendors can make sure their promotions are being handled correctly. Suppliers and manufacturers have the potential to save money on production costs while making money on customised products.

With RFID integrated across a company’s supply chain, consumers should win. Over time, shops will save money, lowering consumer expenses. RFID-enabled organisations should also provide more helpful and knowledgeable customer care. They have real-time data to share with customers.

Consumers have often complained about out-of-stock products at retail outlets, but this should be reduced significantly with RFID. A microwave that is a reader that detects the tag of the food you put in and automatically cooks it according to the guidelines on the tag can make people’s life considerably more manageable. It also benefits the environment since businesses will use resources more effectively. RFID chips on food goods will make recalling specific items much more accessible, perhaps saving lives.

RFID contains many advantages over traditional ways of coding pallets, boxes and products. It allows for non-line sight-reading of the tag, which stores all the product information. RFID reduces human labour costs and human errors through the supply chain, saving companies money and reducing theft in stores and warehouses. RFID can save lives if there is a recall and the recalled food item or product is tagged; then, it would be easier to collect all the units.

II. Disadvantages of RFID

Radio Frequency Identification has been around for over fifty years. Still, technology’s rapid development and deployment over the last five years have raised people’s awareness and understanding of the technology. While there are many potential benefits of RFID, there are many pitfalls. Every level that could benefit from RFID can also reap negative rewards from the technology.

The U.S. military was one of the early adopters of the technology, using it for over ten years in a limited area of their operations. In 2003 they upgraded their technology usage by demanding that all suppliers affix an RFID tag to every pallet, carton, and big-ticket item shipped to the military.

Large companies like Wal-Mart and Target use RFID and face many potential technological problems. RFID has no proven infrastructure making it difficult for suppliers to keep up with these companies’ demands to become RFID-ready. If the suppliers cannot effectively implement RFID into their business, retailers cannot fully view their supply chain. If retailers cannot get all their information across their entire supply chain in real-time, the issues they are trying to solve will remain. Out-of-stock items, first-in-first-out and last-in-last-out products will still cause problems for these large retailers.

Privacy Issues

Privacy issues are the number one pitfall for RFID and retailers. As long as the tags are only affixed to pallets and cartons, the retailers would not have any specific information on the consumer. However, when RFID tag prices fall, companies like Walmart and Target plan to use RFID tags on individual products that can trace consumers’ buying habits and other information consumers wish to keep private. It was privacy issues that forced Benetton to cease its pilot RFID system. They wanted to embed a tag in articles of clothing to stop theft, determine consumer buying habits and keep their inventory at an acceptable level.

Consumers have the most considerable disadvantage of any other entities involved with RFID technology. There are five privacy issues that consumers must try to protect themselves from: Hidden placement of tags, unique identifiers for objects worldwide, massive data aggregation, hidden readers, and individual tracking and profiling.

The hidden placement of markers by companies is an easy way to get information from consumers. The consumer will feel safe buying a product without knowing that an RFID tag is embedded in their clothing. These tags could theoretically track a person worldwide if there were readers in specific global locations.

These tags may also contain personal information such as medical history. Prada, Swatch, and Benetton all utilised embedded tags in their apparel, but a boycott forced them to remove them. Aside from California and Utah, no other states have filed explicit requests to stop firms from inserting tags. RFID can track customers’ product preferences, purchasing power, and prescription history. RFID facilitates data collection and correlation. A firm may integrate and develop new data on purchase behaviours with several outlets.

Hidden readers violate people’s privacy much the same way hidden tags do. Gillette and Accenture are introducing “silent commerce”, which embeds tags on people’s products and readers in strategic locations without the consumer’s knowledge.

The disadvantages of RFID hinge mainly on privacy concerns, technological imperfections, cost of the technology and no proven way to set up an RFID system for a company. The government and corporations are the two groups that offer the most concern for privacy issues. Hidden tags and readers threaten to take away the human mystery, showing a world where people see, feel and hear only what the government and large corporations want people to.

III. Future of RFID

The future of RFID is uncertain; however, the technology is here to stay. Companies have many obstacles to overcome to make the technology a feasible option to be implemented. Privacy issues will persist, although the cost of RFID systems will decrease. For RFID to be successful, companies must work with privacy advocate groups to develop a fair way to implement RFID without alienating their customers.

Technology will continue to develop for RFID, and many new applications will be realised. Automation will be a side-effect of RFID development in the supply chain and everyday activities. Contactless payment methods are already available, and automatic keycards open doors. RFID tags installed in cars with readers on the roads and freeways will alert the authority if you are breaking the law.

Supermarkets will eventually realise their shopping cart checkout system once prices fall more affordable. Fresh foods, metals and liquids will all be RFID compatible soon. If privacy issues are not watched closely, people will become tagged, and there will always be someone watching and analysing every person’s decisions.