Documente Academic
Documente Profesional
Documente Cultură
Prepared for
Kennesaw State University’s
Information Technology Students and Staff
Prepared by
John Belote
Dan Gould
Isabel O’Cathey
Jan Veriga
David Wedekind
Page
Executive Summary iv
Introduction 1
Background 2
Industry Leaders for RFID 3
Problems 5
Cost and Security 5
Privacy 7
Today’s Business 8
Competition in Shipping 9
Recommendations 10
Letter of Transmittal 12
Operating Agreement 13
Figures
Page
Figure 1 1
Figure 2 6
Figure 3 7
Figure 4 9
Figure 5 10
Table
Page
Table 1 3
Executive Summary
This report analyzes the pros and cons of RFID and presents recommendations
on improving The Shipping Crews share of the industry.
Although RFID, radio frequency identification, has been around since the 1970’s
the progression has been slow in implementing it into businesses. The cost or
risk factor has always deterred business from using RFID as the everyday
procedure. So even though all major corporations were aware of what was at
their fingertips not everyone looked to improve it. Today’s technology is
becoming so advanced that it is the natural next step to take. The companies
who have the most investment in RFID research labs are bound to be the new
leaders in this young market. Implementing the new systems into daily operation
will be essential to The Shipping Crew’s success. Currently we are conducting
trial runs as well as test pilots to ensure that RFID is capable to handle such a
large task. Our analysis of these tests, and pilots done by other shipping
companies will enable The Shipping Crew to develop a strong, RFID centered
shipping team.
Even though RFID’s development is still young, we feel it will put us above the
competition. We have a proactive approach in our marketing but also taking
control of the near future market for RFID. By contacting the major suppliers
which will be forced to move to RFID tracking and notifying them of our systems,
it gives us a competitive edge over every other shipping company. Wal-Mart, the
largest retail marketer, will be our main focus to solidify the business. After which,
we will contact smaller retail chains, and notify them of the emerging technology.
Our continued development of RFID will be supported by investment in leading
RFID labs. Our investment in these labs is very important to our success in the
future. To be in the business you must think big picture.
iv
INTRODUCTION
RFID transmits information from a chip into a computer where it is processed and
can be used on almost anything. One way to use RFID is for shipping and
inventory management in retail sites such as Wal-Mart. The tag will also be used
in postal courier mail (the second largest market for RFID) services. It will
improve security for packages as well as the trucks that ship them. RFID can
give real time information as to where the package is while also detecting cargo
door intrusions and security breaches of shipping crates.
The usage of RFID in The Shipping Crew as opposed to the barcode label will
not only reduce the frequency of lost packages, but it will also decrease the
amount of time packages are traveling. The new tags will make identification of
packages must quicker and more reliable. This middle stage of shipment, where
the package usually sits in a warehouse for check in will be completely negated.
Customers will have the opportunity to be provided with “more-detailed real-time
information on where a package is any given time (Dunn, p2)”. The use of an
RFID labeled package will give us and our customers the ability to access the
exact location of each package at any given time. This radio technology will be
the force to empower the identification revolution. RFID will continue to advance
in its current capabilities as well as employ a new innovation into the global
shipping market.
Shipping and receiving go hand and hand with the consumer and supplier
relationship. RFID encourages
o Automated processing of loading and unloading
o Reduced labor requirements
o Faster processing
o Automatic cross-docking
o Automatic generation of 100 percent accurate electronic manifests.
RFID Barcodes
o Lack of hand scanner o Currently less expensive
o More secure packaging o Barcode system already in
o Instant identification capabilities place
o More efficient shipping methods o Direct contact with scanner
o Decrease in amount of lost o More human hands on labor,
packages which does increase cost
o Fewer off route deliveries o Inferior tracking capabilities
because of vehicle tracking o Outdated technology
Table 1
Several leading shipping companies believe that RFID is the key to creating a
competitive advantage in the industry. UPS, our primary competitor has already
set up a 4 pillared strategy to their RFID execution. Albert Wright, VP of UPS
engineering, is an advocate for customers in the shipping business. Wright
states, “Being ahead of the curve in planning and preparation is part of keeping
the customer satisfied”. Some aspects that can identify with RFID and its profit
improvement program are: increasing the distribution center in productivity,
increasing yield per end user (customer or site), creating a flexible, adaptive
supply chain and creating a cost advantage in logistics. Goods that can be
delivered to the place and time when consumers are ready to purchase defines
an efficient supply chain operation. To help UPS gain insight as to how the
growth of RFID will encourage better consumer relations there have been two
small leading investments.
The RFID technology was tested by UPS in two pilot programs near the greater
Atlanta area. Engaging these programs justifies the corporation’s incentives in
ensuring customer satisfaction. Wright concludes, “It’s the kind of thing that helps
you to be recognized as a leader not just as a logistics or transportation
company, but as a technology company as well (Dunn).” Albert Wright is just one
of the many leaders’ who are increasing public awareness about the advantages
of RFID in the shipping industry.
3
Two RFID companies lead the way into the RFID distribution market. Impinj Inc.
Who is an RFID chip and tag supplier, and Savi Technology Inc., another
provider of software used in creating RFID supply-chain networks. These two
technology suppliers are collaborating with UPS, who was a primary investor, in
order to be ready for RFID technology as it moves into mainstream operations.
As producers of RFID stroll their way into the shipping market, major retail
chains, like Wal-Mart have begun to set mandates on all suppliers having RFID
labels. These mandates have been set because of the success that Wal-Mart
had in their test pilots. Wal-Mart has already tested the RFID tags on packages in
12 select stores, and experienced a 16% reduction in out of stocks. Manual
orders were tested in twelve pilot stores and equipped with RFID technology and
twelve control stores without the technology researchers at the University of
Arkansas found a 16% reduction in out-of-stocks, the 29-week study analyzed
the out-of-stock merchandise at the pilot stores establishing a firm, pre-study
baseline. To measure the impact of RFID, out-of-stock items were scanned
every day throughout the study period, at the twenty-four stores. After analyzing
the baseline and comparing the performance between the two pilot stores the
study provide RFID effective and ready for retail purchase. The RFID enabled
stores, “were 63% more effective in replenishing out-of-stocks than the control
stores”(Dillman, ID tech Ex). Executive vice president and CEO for Wal-Mart
promoted the RFID to enhance the program as well as expand the Wal-Mart
market.
As of 2005, Wal-Mart has tripled the amount of stores where RFID has been
installed. These tags will be in mainstream operation in over 1000 Wal-Mart
stores by the end of 2006. During this time frame Wal-Mart has also set a
preliminary mandate on over 200 suppliers to have RFID tags.
The Shipping Crew plans to infiltrate this market with packages already having
tags on them. In this manner we plan to work together with Wal-Mart and their
suppliers in a way that can benefit everyone. The efficiency that will be enabled
from these superior tracking devices will help to propel The Shipping Crew into
an already very competitive market. A major component in the experience of
RFID is easier access, tracking and security. During January 2006, Wal-Mart’s
next top 200 suppliers will be “live shipping EPC-tagged cases and pallets” (ID
Tech p.2). The wave of mainstream enhancement in RFID does not stop there;
Wal-Mart will be ready to accept RFID/EPC tags during this paramount
advancement. This will enable customers to continue the cycle in supply and
demand of Retail RFID tags. Wal-Mart will in effect have a sequential chain-
reaction of increased supply and more volume in consumer demand.
"Symbol has the potential to be not just a market player, but a thought leader in
RFID," said Michael J. Liard, senior RFID analyst for technology market research
4
firm Venture Development Corporation. "The immediate need is for infrastructure,
such as middleware solutions and fixed and handheld readers. By marrying its
existing supply chain solutions with RFID technology, Symbol can make a fast,
immediate impact.”
Problems
Our main problem with RFID is the question of just how much capital we want to
invest in the current market. With the existing rate of technological improvement,
it is a known that RFID will continue to be developed. Should we jump into it now,
or wait for a stable, more efficient product to be produced. With the current
barcode system we have a stable platform for mass shipments. Until the
technology is improved, and makes RFID cheaper we will have to passively enter
into the market.
Figure 2
The entire cycle of shipment would be better stabilized if RFID were encoded in
items shipped. Using the healthcare systems as another example is the outcome
of patient tracking and deterring of counterfeit drugs. The privacy that RFID offers
is an immense advancement in patient-doctor relations as well as shipping and
receiving relations. Counterfeit drugs adversely affect people’s lives by
preventing patients from receiving needed medication. Fortunately, RFID/EPC
tags can help detect products that are:
o Counterfeit or fake
o Tampered with, adulterated or substituted
o Unacceptable ( i.e. expired, discarded, returned, recalled, etc.)
6
Figure 3
Privacy
Anyone who has been a victim of identity theft, the fastest growing crime in
America, knows what it feels like if someone knowing everything about you.
What about if someone knew about your whereabouts all the time? So, for
Americans who believe in conspiracy theories the new passport in 2006 will
cause them to panic.
The shipping crew knows privacy and protecting our customer’s identities and
items are major concerns for a consumer nowadays. Being able to provide “a
reliable and cost-effective packaging solution for medication tracking exists in
using RFID technology to record patient usage when the tablet is expelled from
the packaging, enabling accurate capture of clinical date without manual data
entry”(Medic-ECM). To make the implementation of RFID successful is
customers being receptive to the change and willing to use the service. Knowing
their privacy will be protected will help this transition go a lot smoother and more
lucrative in the long run.
7
Today’s Business
Today there are dozens of RFID deployments and pilots around the world. RFID
addresses a global array of business applications. A short list of examples
includes:
o Retail supply chain
o Asset tracking
o Document tracking
As new drugs go through the clinical trial phase accurately tracking patient usage
is crucial. RFID will also help on a larger scheme. Improved tracking and
accountability can improve the reliability and speed of the United States Food
and Drug Administration (FDA) drug approval process. Although RFID’s
advantages have increased productivity and raised consumer awareness, RFID
will probably not replace barcodes any time soon. However, the advantages of
RFID are distinct when compared to a barcode. For example,
Then
cartoon/crate
Cycle of and RFID tag
packaging every with item
item with RFID contents,
quantity and
destination
Lastly placed in
container with a
battery powered
read/write tag
placed on all
packages.
Figure 4
Competition in Shipping
Another main competitor to The Shipping Crew is the global shipping company
DHL. Although not as straightforward about their RFID development plans, it is
assumed that DHL will be increasing their efforts to produce productive RFID
system.
The 4 pillared strategies that UPS has created are setting a standard for RFID
operations in the shipping industry. The Shipping Crew will monitor UPS’s
development and implementation of RFID in their daily business. The success
that UPS and other major shipping companies have will determine whether or not
it is practical for The Shipping Crew to develop a similar RFID system.
Recommendations
Our RFID strategy will be largely based on what our customer’s primary needs
are. RFID will be implemented in a process that is beneficial to us but also to our
customers. We will start planting RFID chips onto packages in select markets.
The future success of our RFID coverage will be based largely on the success of
our test shipments. These shipments will include mainly large packages, as well
as irregularly shaped ones. However these tests will also include a series of
shipments containing packages we receive on a daily basis. Our RFID testing
would not be complete without a thorough analysis of the results. Understanding
and putting the information we learn from each test into our standard operation is
a primary concern for The Shipping Crew.
The Shipping Crew’s potential business plans will have a strong influence in
RFID development. We see RFID as the identification system of the future, for
not only the shipping industry, but for many other markets as well. We will have a
continued presence in multiple RFID labs throughout the country. Our investment
in these firms will be a significant part of future product planning. Although we will
have a passive approach to the current RFID market, our business plans in the
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long term will include a major emphasis on RFID. Such an approach should give
us a better idea of how RFID technology can be used in the most beneficial way.
Our main focus will always be the customer; their experience with The Shipping
Crew is the number one priority. By introducing new technologies to this loyal
customer base, we should be able to improve their shipping experience.
Developing these technologies will make The Shipping Crew run at a level that is
not only more efficient but also more secure.
Another major market The Shipping Crew plans to enter into is the Interaction
between suppliers and major retail stores. Wal-Mart a leading retailer will be
setting mandates to all suppliers to have RFID labels on all packages being
shipped into their stores. This is where The Shipping Crew comes into play. We
plan to enter this market with RFID labeled shipping containers, which should
improve security of all deliveries. If we can run a fail proof shipping business,
demand for our services will increase. The amount of commercial retailers in just
the United States alone is a massive market. The RFID market in just shipping is
projected to be worth three billion dollars by the year 2016.
Not only will all deliveries have packages that contain RFID labels, but our
transportation vehicles will all be RFID enabled as well. The Shipping Crew will
have the ability to monitor all routes of each individual delivery vehicle. For
example, if an RFID enabled semi-truck just happened to make a wrong turn on
a delivery, we would have the ability to locate the vehicle as well as give him
proper instruction on his successful return to the delivery route. This technology
will increase the success of deliveries and will decrease the amount of lost and
missing packages. We will place RFID devices on all transportation vehicles
including vans, trucks, all train cargo, airplanes, and sea shipments. One of our
first implementations of RFID will be installing it onto these shipping vehicles.
With the success of our pilot tests as well as the continued development of RFID
technology we plan to expand our RFID capabilities into a daily operation.
IdTechEx predicts that in the year 2020, the postal/courier service industry will
have over one trillion packages labeled with RFID capabilities. During this same
time frame The Shipping Crew will work with the RFID labs into developing an
affordable device that can be used in mass quantities. Our growth as a company
will be largely based on the success of RFID’s future development. Another one
of our primary competitors, DHL, has talked of plans of up to ten years to tagging
one billion packages annually. At The Shipping Crew our strategy is similar to
DHL’s, with an ever increasing presence of RFID in daily operations.
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Letter of Transmittal
November 21, 2005
Here is the report you requested for November 21, 2005 on the uses of RFID and
how it fits into our emerging technology as a society.
The careful analysis of our business solution to overcoming the problems that
exists in barcode tracking are examined in the above report. Included in the
analysis is evidence confirming our determination to revamp the commercial and
retail markets. Especially in Wal-Mart’s shipping industry.
Results of the business report have continued to strengthen our ideas. I would
like to take this time to take this time to thank all the leaders in the forefront of
RFID technology, such as UPS and Wal-Mart. The strength of our team’s
different skills has created a recommendation that will be hard to turn down.
Investments should continue to increase awareness of RFID’s and result in a
solid customer baseline.
Sincerely,
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Mission Statement
“When one door closes another door opens; but we so often look so long and so
regretfully upon the closed door, that we do not see the ones which open for us.”
Alexander Graham Bell
Operating Agreement
I. Purpose of Project
1. To research RFID in the shipping world
2. Provide a detailed report on the advancements, achievements,
concerns and issues pressing the issue of RFID.
II. Decision Making
1. All members have a voice and will be listened to.
2. Everyone will be entitled and encouraged to give ideas because
five heads are better than one.
3. Decisions will be made by consensus within group
III. Team Leader and Structure
1. A team leader and secretary will be chosen for each meeting
2. The team leader is expected to be prepared to discuss
assignments due, progress of project, and everyone still on task.
3. The secretary is responsible for taking notes.
4. After a meeting a e-mail will be sent out giving an overview of
meeting and what the next step will be.
IV. Meeting Attendance Policy
1. After class on Monday and Wednesday, we will meet to discuss
progress.
2. Attendance is mandatory unless given prior notification member will
be unable to meet.
V. Preparation and Performance
1. The American Heritage Dictionary defines quality as “having a high
degree of excellence.” This is expected from all members.
2. We are all adults and should act like one. Every member is
responsible for the task assigned and is expected to be prepared
and on time with assignments.
3. Everyone is responsible for their own actions but without 100%
participation it will reflect on all other members.
4. Each member is expected to be honest with themselves as well as
the rest of the group. Trust is a key element in any good working
relationship.
5. Each member must work towards facilitating a positive learning
experience for all members of the group while keeping a good
sense of humor and keeping the group fun.
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VI. Non-performance and Peer Review
1. Remember we are on the same team and need to work together
because we all are working towards the same goal.
2. We are all humans and sometimes can get carried away but also
everyone has feelings. So please be consensus of others opinions
and thoughts.
3. Review of each product by an associate other than its creator to
insure an objective analysis
4. Accompany any product with source documentation and references
to verify accuracy
5. Check all quantitative data/analysis for accuracy
6. Incorporate feedback into products after the peer review process
VII. Project Requirements
1. System Analysis and Peer Evaluation
2. Web Page
3. System Presentation
4. All members will review the work and make sure the standard has
been upheld. All members are aware participation is mandatory for
all assignments.
5. Each member must also complete an Individual Assignment
Presentation.
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IX. Meeting Schedule
1. Date:
Leader: _______________________________________________________
_________________________________________________________________
Secretary:______________________________________________________
2. Date:
Leader:________________________________________________________
_________________________________________________________________
Secretary:______________________________________________________
3. Date:
Leader:________________________________________________________
_________________________________________________________________
Secretary:______________________________________________________
4. Date:
Leader:________________________________________________________
_________________________________________________________________
Secretary:______________________________________________________
5. Date:
Leader: _______________________________________________________
_________________________________________________________________
Secretary:______________________________________________________
6. Date:
Leader:________________________________________________________
_________________________________________________________________
Secretary:______________________________________________________
7. Date:
Leader:________________________________________________________
_________________________________________________________________
Secretary:______________________________________________________
8. Date:
Leader:________________________________________________________
_________________________________________________________________
Secretary:______________________________________________________
X. Team Signatures
I, the undersigned, do agree to abide by the above mission statement and
team guidelines. I understand that the Team Operating Agreement may be
changed at any time by a consensus of team members and notification of Mr.
Walker.
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Works Cited
Academics
2. EETIMESUK. (2005). Global Mail Services Seen as new Frontier for RFID.
Retreived Nov. 13, 2005 from
http://eetuk.com/bus/news/showArticle.jhtml?articleID=173601829
3. ID Tech Ex Article. (2005). RFID Update from Wal-Mart. Retrieved Nov. 13,
2005 from http://www.idtech.com/products/en/articles/00000313.aspx
4. Information Week. (2004). UPS Puts RFID To The Test. Retreived Nov. 13,
2005 from http://www.informationweek.com/story/ShowArticle.jhtml?
articleID=5400114&tid=136
5. Supply & Chain: Manufacturing & Logistics Solutions. (2005). RFID Shipping-
Seal Test a Success. Retrieved Nov. 13, 2005 from http://www.scs-
mag.com/index.php?option=com_content&task=view&id=892&Itemid=73
Commercial
2. RFID UHF Tag Inlays. (2005). RFID Tag Inlays. Retreived on Nov. 13, 2005
from http://www.symbol.com/rfid
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5. United Parcel Service (UPS). (2005). Business Benefits from Radio
Frequency Identification. Retreived Nov. 9, 2005 from
http://www.barcodebook.com/html/rfid_tags.html