Deployment of RFID sensors in supply chain management – a review

1. Introduction

Globalization has made supply chain management and development of robust supply chains crucial in almost every industry and business. SCM deals with the entire chain of process involved in any activity, production or business. In the current wake of industry 4.0 and ever-increasing globalization, competition has witnessed a surge in the business market. Due to this companies are expanding their operations with the help of more robust supply networks. E-commerce websites are a great example of how supply chain networking and management is changing the scenario people lead their lives. A good supply chain significantly improves the efficiency and competitiveness of an organization. SCM will incorporate largely all the aspects of operations, supply and demand planning, administering, control of processes etc. Supply chains are also prevalent in various industries that deal with management of flow of perishable products or commodities having a limited shelf life such as agriculture and food industry.

Traditionally, barcodes have been popularly used in supply chains. These barcodes required a physical contact, clear line of sight to be read or detected. Due to increasing competitiveness around the world, everyone is trying to cut down on cost and time involved in the entire supply chain. RFID has emerged as an alternative to barcodes and a great solution to reduce overall time and cost involved in supply chains. RFID is basically a wireless technology that, as the name suggests, transmits information through radio waves. RFID stands for ‘Radio Frequency Identification.’ These RFID systems have great advantages over traditional barcode systems such as it does not require a physical connection or line of sight.

RFID is a relatively new concept introduced into SCM in the past decades. However, RFID as a technology has been prevalent since World War II, back then it was primarily used for basic identification applications [1]. In supply chains RFID can play a major role in identification, inventory management, manufacturing, shipping and distribution, managing operations etc. A great rise in deployment of RFID systems can be witnessed in SCM which can be attributed to its many advantages when compared to conventional systems.

This paper is focused on detailed literature review concerning the deployment of RFID systems into supply chains and SCM. The paper studies the RFID technology in required detail and provides a summary regarding the technology, its components and classifications. Further on, the paper focuses on reviewing the various application RFID systems have been deployed in SCM. It also provides a merit-demerit analysis of the technology. The main aim of the paper is to provide a holistic review of the RFID systems and its deployment in SCM.

2. RFID systems

RFID technology has been around for a long time now. However, it has gained recent attention in the past few decades for various applications in a variety of sectors, especially sectors such as supply chain management that are subjected to harsh environments and often deal with products which are perishable in nature. RFID systems are often compared and denoted superior to the conventional barcode systems. RFID has various advantages over barcodes such as it does require a line of sight of physical connection, it has better range etc. Most importantly barcode systems are ineffective in functioning in harsh environments which are subjected to dirt, hazardous contamination, low or high temperatures etc. [1]. RFID systems do share similarities to its competitor technology, which is barcodes. Bothe these technologies rely on scanning, reading information and then relating the information to the stored data. However, there are major differences which come across as RFID being advantageous over barcodes. Firstly, no line of sight is needed in case of RFID which makes the entire process very fast and less prone to human errors. In the barcode system, workers will have to manually scan each of the barcodes but with RFID scanning can be done in bulk instantaneously enabling multiple parallel reading. RFID is also capable of manipulating data without a need to alter the database corresponding to the tag [3].

RFID sensors have 3 main components that govern the entire functioning. These are tags, reader and software. A tag is essentially a memory storage device. Tag consists of small chips which store data and are embedded with an antenna, which is used for transmitting signals between tag and reader. A reader is nothing but a decoder which reads the data stored in the tags. The communication between tag and reader is established via radio waves. Readers have an appreciable range of centimeters to meters. The range also depends upon the type of tag and operating frequency. All this data collected is then processed using a software/computer similar to barcode systems [1].

RFID tags can be classified based on operating frequency range and based on the activity. Tags can be classified as active, passive and semi-passive. Passive tags are more popular in terms of applications and deployment and less costly as compared to active tags. The difference between the two is that active tags have a battery embedded and they remain active throughout their own power-supply. On the contrary, passive tags do not have any battery and they are activated by the trigger received from readers [1]. RFID tags operate in different frequency ranges namely, low frequency, high frequency, ultra-high frequency and microwave range. The classification based on operating frequencies is shown in Fig. 1. These ranges are to be selected based on a particular application. In applications involving SCM, usually tags operating in high and ultra-high frequency are used [3].

Fig. 1Classification of RFID tags based on operating frequency

3. Applications in SCM

RFID systems can be effectively deployed for various applications such as retail, warehousing, asset tracking, assembly, configuration manufacturing, logistics, transportation etc. In nutshell, RFID systems can be used at various phases in different supply chains. Table 1 presents a detailed literature review of applications of RFID sensors in supply chains.

4. Critical analysis of deployment of RFID in Supply Chains

When compared to conventional barcode systems, RFID technology proves to be far more promising in terms of what it has to offer. RFID tags are capable of continuously collecting data when products transit from shelves to checkout. Thus, this technology helps in minimizing labor, its associated costs and practices such as shoplifting. The tags have significantly helped in reordering, stocking, and keeping track of purchases. Smart-shelves are introduced in the retail sector which are based on RFID systems which prevent situations such as out-of-stock.

RFID systems are also prevalent in shipping and distribution applications. Traceability is improved using RFID as it enables tracking of the pallets and allows real time decision implementation. A fleet of 2600 trucks equipped with RFID tags at a particular logistics provider company enables automatic monitoring of docking and undocking activities.

Supply chain activities such as manufacturing and assembly lines are also potential areas of RFID deployment. Identification of products can be done using these systems. RFID ensures the entire quality of process by providing real time checks during assembly. It also promotes lesser labor and thus optimizes the process cost-wise. A great example of this is the case of Ford Motors that have been using RFID tags. An RFID tag is attached to each car’s chassis skid. This tag is instrumental in indicating which parts and components are to be installed on the chassis, communicating via the serial number to the reader. As the chassis transits from one assembly station to the following one, readers read the chassis’ assembly needs automatically so that the appropriate components can be installed thus eliminating error prone manual barcode scanning [3]. Intelligent components in ETO management have also been studied. RFID technology is capable of identifying, tracing location and establishing communication. RFID sensors operating in the UHF range are proven to be capable of creating intelligent components [59].

RFID systems have proved to optimize logistics, warehousing and transportation activities. Conventionally, all these activities involved a certain amount of time in inspection, identification and documentation which was carried out by human force. All this causes a hindrance into the flow of goods and services in terms of time. RFID can greatly eliminate these hindrances by automating the entire manual process involved. It provides benefits such as reduced time and labor involvement and increased visibility. Thus, goods and services move faster through the SC’s and at a comparatively lower cost. RFID also works efficiently in inventory management by improving the inventory accuracy, which is the difference between physical inventory and logical inventory. In the most ideal case, both these inventories are equal. However, due to a series of reasons such as loss of goods, errors in input etc. both the inventories could differ. Logical inventory is basically recorded in computers using ERP, WMS etc. RFID can automate the entire scanning process and thus improve the records [3]. Throughout the supply chain, RFID can be incorporated at various checkpoints for a plethora of service exchange. RFID will not only ensure identification, monitoring and tracking but also aid manufacturing, warehousing and inventory, retail, logistics and distribution, as shown in Fig. 2. Basically, RFID can be said to be a very versatile technology that will continue to function effectively throughout the supply chain right from inbound material to delivery.

Fig. 2Various RFID transactions during a Supply Chain [60]

RFID sensors are enabled with GPS sensors in order to perform the tasks of tracing, tracking and identification. Another important inclusion is the temperature and environment sensors which enable them to be deployed effectively in cold chain monitoring. Cold chain refers to the flow of temperature sensitive and environment sensitive products. A certain temperature and environmental conditions such as humidity, moisture etc. is to be maintained in order to ensure their quality and shelf life is maintained. RFID enabled with temperature sensors can give real time data of the environment and enable human operators to adjust it according to the changes. These RFID sensors are installed in the boxes or pallets and are believed to improve the efficiency of cold chains.

The applications of RFID in retail have been used to encourage intelligent business-to-business e-commerce supply chain management with the aid of the EPC network [45]. The EPC network is a unique feature and a standard for all RFID infrastructure composing essentially of several components such as the EPC code, which when incorporated into the chip and attached to an item, provides the details of it for e.g., Temperature, product size, expiry date, etc. The next component is the RFID reader which identifies any EPC tag/ RFID chip and forwards the information to the next component i.e., SAVANT. Analogous to the middleman in the entire operation, this component communicates between the readers and the application systems. It can be further modified to filter the data according to the specific needs of the organization with the help of the EPC-IS i.e., the fourth component. It is an information service that provides a gateway between any requester of information and the organization’s application systems and data. The last component of the EPC network is the local Object Name Service which is an authoritative directory of information sources available in order to clarify the details including the EPC tags used in the supply chain. Therefore creating ‘smarter products that are able to interact with correct stimuli is helping to enable and facilitate the smoother logging of data in registries within an organization saving time and effort. With this, many large-scale retailers are investing more in information management which has helped them to expand business within a shorter amount of time. It has also enabled retail giants to cross-check their product qualities and customer service.

Considering the role of the deployment of RFIDs in Supply Chain management when it comes to a buyer-seller relationship [57], it has generated an open network of the flow of information and monitoring has been easier than ever. It has generated a healthy, competitive yet knowledgeable environment where suppliers and buyers maintain their connections. Its integration is more visible when we look at EPC global [46]. It is one of the two primary RFID standards. In essence it is an internet-based supply chain model aimed at improving supply chain end to end visibility. One of its key components is the EPC, which is discussed earlier as well. RFID deployment in the supply chain management has been broadened in perspective with authentication applications as well. Automatic data acquisition, location, identification etc. all are products of RFID’s integration with the supply chain Deployment of RFID in supply chain management provides greater power when it is combined with GPS and Bluetooth which help in creating a closed loop in monitoring the products. RFIDs have the largest application in supply chain management. One of the biggest problems a system faces is shrinkage [42]. Various factors contribute to shrinkage and it is one of the main problems that have been reduced significantly. Material handling requirements have reduced phenomenally due to the deployment of RFIDs and respective supply chain networks generated with the help of RFID tags. The usage of these systems has made is much easier to create accurate databases without much human intervention thereby saving time and capital. Quicker exception management has enabled impressive applications, especially in the health-care supply chain management system. Quality control and production tracking, as explained earlier, are incredible feats achieved due to this system.

5. Advantages and limitations

RFID has its advantages and disadvantages as any modern technology does. As a technique heavily dependent on the deployment of radiofrequency waves its accuracy is largely dependent on the accuracy of the transmission and receiver devices involved in the entire process. The entire process depends on the whether the tags used are active or passive. Advantages of using active tags in cases of applications where regular data monitoring takes place can generate large amounts of data and help improve the supply chain therefore fulfilling its purpose in its deployment in the sector. They can be used and implemented over much larger distances/ ranges making them a lot more efficient in terms of enabling distant communication between management systems in the SCM chain. As compared to barcodes, RFID readers and tags do not need line of sight communication and can be worked from fairly distant areas. Even though the distance will vary according to the type and configuration of the readers and tags, it encourages the warehouses to effectively save time. In comparison to other monitoring devices or tagging devices RFID can be read and overwritten. They can be reused and are much durable thus removing the hassle of replacement or loss related to monitoring in the SCM system much less. In a SCM the deployment of safe and secure tagging methods is super important. Thus, RFIDs provide the service of an encrypted service which remains secure throughout the life cycle of the chain. This makes it difficult to easily replace a tag already registered into the system. Another advantage of the RFID’s tags deployed is the fact that they are easily readable once in the system.

In essence, RFIDs have made it so much easier for an organization to manage the entire supply chain management. It has reduced several instances of reduction of human errors due to its automatic logging into the system and in turn increased the lifecycle of certain aspects of the products. The introduction of RFIDs significantly improved the operations over various range of bandwidths and not just over wavelengths.

In addition to simple active and passive RFIDs, the other types of RFIDs used are Near-field and Far-field RFIDs. All of which make use of EM spectrum in addition to radiofrequencies. Although we have seen considerable number of advantages, we do observe several limitations that come along with its deployment in the SCM systems. Ideally any corporation aiming to set up its RFID infrastructure will have to incur initial costs that tend to be large. The amount of money required to set it up might not make the operations for the organization profitable. Even though these systems once deployed are highly accurate they are prone to collision dude to usage of waves for emission of signals. This could result in superposition and hence generate inaccurate readings. The infrastructure of the system is also dependent on the frequency The systems across organizations and countries vary as s result of lack of standardization. As mentioned in the challenges of deployment of RFIDs in SCM systems, lack of standardization makes it much harder for universal systems to be deployed and ever specification followed region-wise makes it much more difficult to encourage uniformity across various outlets of the same organization. Although these systems once deployed tend to be secure it does not mean they are completely fool proof and free of risk. They can be hacked from the connected data base management systems from the SQL serves to which they SCM system is connected to. Unauthorized devices which read radiofrequencies may be able to hack or read into the system.

6. Challenges

One of the major difficulties faced by RFIDs and their deployment is that the effectiveness will largely be dependent on the type of tag itself. Some tag can offer longer reading ranges but fail to hold data for enough time whereas others can hold larger amounts of data and cost less. RFID is still not feasible for businesses that are not financially, technically and operationally sound [46]. The initial cost and maintenance of setting up a system for a business can create generate complications. There is an upfront expense of RFID readers and tracking software as well as the continuing cost of the different types of RFIDs.

RFID isn’t ideal for all situations. Especially when it comes to monitoring different types of materials and substances. Liquids can absorb some of the radio signals and while others can bounce off the material if it is a metal. There is a huge amount of scope for the improvement of accuracy and precision in this technology when it comes to its deployment in the supply chain as well. In the case of too many readers, there is a possibility of collisions and over-reading in the line of monitoring. Moreover, there are a lot of costs involved when it comes to training and implementation of the processes. It is also defined by the level of tagging involved. If the tagging level is at an item level, the number of tags increases significantly, and hence cost of investment increases. Pallet level tagging, although cheap, does not provide the benefits of large data storage. Another concern is the lack of standardization. Many parameters when thoroughly considered do not necessarily yield results due to a lack of standards and normalization. Data warehousing and enterprise integration also play a crucial role in the cost of investment and integration of the RFIDs in the supply chain of any business. In order to manage the vast amounts of data generated in a single day, the organization must be prepared to handle it and be able to use it to its advantage which is, obviously, a very time-consuming and costly process.

Considering the advantages of RFID systems in supply chains, new developments in the technology to overcome these challenges is needed. With new developments, RFID technology can monopolize all the supply chains and significantly improve the entire the market of supply chain management. It will be advantageous for all the stakeholders and give the supply chains a totally new dimension in terms of its operations and efficiency.

7. Conclusions

RFID sensors-based technology is transforming the supply chain industry for the better. RFID comes along with various advantages such as providing real time data, tracking, identification, tracing, automating manual processes etc. All these have proved to be of significant importance in the supply chain industry. This paper has provided a thorough literature review of the deployment of RFID in SCM and their performance. It categorizes various application areas of RFID in SCM through Table 1. The paper also gives brief insights into the technology and it’s functioning thus enabling a complete understanding of the technology and how it is being deployed for various applications. Even though RFID has been there for decades, its popularity is quite new in the field of SCM. It is transforming the entire SC with its capabilities due to embedded GPS and Temperature monitoring systems. RFID systems are providing optimized results in time, money and resources utilized as compared to conventional methods. The paper also draws frequent comparison between RFID systems and the much prevalent conventionally used barcodes systems and how RFID surpasses it. Thorough in-depth analysis of the deployment of RFID sensors in supply chains have shown better productivity and improved efficiency of the supply chain. RFID has great potential in this industry, it can revolutionize and transform every possible supply chain. However, sufficient further development is needed in order to make it viable for all kinds of supply chains. In challenges, we have seen how certain barriers with the technology is limiting its application in certain cases. But with increased attention towards this advantageous technology, better results can surely be expected. Changing the external design of the sensors and tags to make it robust to handle different conditions is needed. At the same time, the loss in transmission in some cases due to liquids can eliminated by providing alternative means of installations and amplifiers. Even though a lot of applications have been actively found installed with RFID, there is a certain scope of research and development. RFID has the potential to bring in more sound changes in the SCM industry thus making the system even more advanced and technologically equipped.