EMERGING INVENTORY TRACKING TECHNOLOGYRADIO FREQUENCY IDENTIFICATION

by

Aaron Darsaw

A Graduate Research Report Submitted for INSS 690in Partial Fulfillment of the Requirements of the Degree of

Master of Science in Management Information Systems

Bowie State UniversityMaryland in Europe

12 May 2005

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TABLE OF CONTENTS

ASTRACT.....................................................................................................................................V

LIST OF FIGURES....................................................................................................................VI

CHAPTER 1...................................................................................................................................1

INTRODUCTION....................................................................................................................1

STATEMENT OF PROBLEM…………...………….……………………………………………….1

NEED FOR THE STUDY………………….………………………………………………………2

DEFINITION OF THE TERMS...........................................................................................................2

CHAPTER 2………………………………………………………………………………………3

REVIEW OF THE LITERATURE.......................................................................................3

LITERATURE REVIEW..................................................................................................3

WHAT IS RFID?................................................................................................................3

INDUSTRY BACKGROUND...........................................................................................4

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DIFFERENCE BETWEEN RFID AND BAR CODE.....................................................4

KEY COMPONENTS OF AN RFID SYSTEM..............................................................5

TABLE OF CONTENTS (CONT.)

COST AND FREQUENCY RANGE.................................................................................9

CURRENT USES OF RFID.............................................................................................10

COMMERCIAL USES OF RFID....................................................................................11

MILITARY USES OF RFID............................................................................................12

DEPARTMENT OF DEFENSE (DOD) MANDATE.....................................................12

BENEFITS OF RFID........................................................................................................13

COMMERCIAL BENEFITS OF RFID..........................................................................13

DRAWBACKS OF RFID..................................................................................................14

POTENTIAL TROUBLE WITH RFID..........................................................................14

CIVIL LIBERTY CONCERNS.......................................................................................15

FUTURE COMMERCIAL USES OF RFID..................................................................17

FUTURE MILITARY USES OF RFID...........................................................................17

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MILITARY LESSONS LEARNED.................................................................................18

SUMMARY OF THE LITERATURE.............................................................................19

TABLE OF CONTENTS (CONT.)

CHAPTER 3.................................................................................................................................19

METHODLOGY....................................................................................................................19

DESIGN, PARTICIPANTS, AND PROCEDURES.......................................................19

ASSUMPTIONS................................................................................................................20

LIMITATIONS..................................................................................................................20

CHAPTER 4.................................................................................................................................20

RESULTS, ANALYSIS, AND DISCUSSION.................................................................20

CHAPTER 5.................................................................................................................................22

CONCLUSIONS AND RECOMMENDATIONS..........................................................22

REFERENCES............................................................................................................................23

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ABSTRACT

Radio frequency identification (RFID) is one of the most rapidly growing segments of today’s

automatic identification data collection industry. Applications that make use of RFID’s features

and capabilities are demonstrating significant improvements in processes implementing this

technology. Industry experts view RFID as a complement to bar code technology, in many

cases, both are used simultaneously. RFID technology, in fact, overcomes certain limitations

found in some bar code applications. Because it is not an optical technology like bar coding, no

line of sight is required between the reader and the identified object. In addition, RFID transmits

data wirelessly and is a read-write technology, so it can update or change the data encoded in the

label during the tracking cycle. RFID usage is steadily increasing. Annual shipment volume of

RFID tags, or transponders, is expected to grow to 1.62 billion in 2007. Despite this growth,

researchers believe that RFID will not significantly displace bar codes. In fact, most of the RFID

growth will come from emerging “smart label” technology, which combines the cost benefits of

bar coding with the functionality of RFID.

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LIST OF FIGURES

Figure 1. RFID Systems.............................................................................................6

Figure 2. RFID Solution Overview............................................................................7

Figure 3. A Simplified Supply Chain .......................................................................8

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CHAPTER 1

INTRODUCTION

Radio Frequency Identification (RFID) is an emerging technology that is used in a wide variety of industry applications, such as automatic fare collection on bridges, turnpikes, and public transportation. It is the media that gives customers the ability to participate in the wireless pay-at-the-pump program offered by ExxonMobil, and hands-free access control security systems in offices and factories. Also, all competitors in the Boston Marathon wear an RFID tag in their shoelaces that identifies them the instant they cross the finish line.

RFID tags consist of an integrated circuit attached to an antenna, typically a coil of wires. Data is stored on the integrated circuit and transmitted through the antenna. These tags can be small as a grain of rice or as large as a brick. RFID tags are either passive, which requires no battery, or active, which is self-powered by a battery. The data transmission speed and range depend on the frequency used, antenna size, power output, and interference. Tags can be read-only, read-write, or a combination, in which some data is permanently stored, such as a serial number, while other memory is left available for later encodings and updates.

Information is sent to and read from RFID tags over radio waves. In passive systems, which are the most common, and RFID reader or interrogator, transmits a signal that wakes up the tag and provides the power to transmit or program data. In active systems, batteries typically are used to boost the effective operation range of the tag. Active tags may also periodically transmit a signal, much like a lighthouse beacon, with the data recorded whenever a reader is in range. Encryption algorithms are used to ensure the security and integrity of the data passing between the tag and reader.

Readers may be integrated into handheld computers, connected to them via a cable, or they may be stationary and positioned at strategic points, such as a facility entrance or on an assembly line. Readers include an antenna for sending and receiving signals and a processor for decoding them. The collected data is then passed through normal interfaces, cabled or by wireless LAN, to host computer systems.

Statement of Problem

RFID is a tracking and identification systems offer a variety of benefits for businesses, consumers, and military organizations. Some of these benefits are in the area of security, customer service, supply chain management, and inventory control. RFID enables organizations to increase its efficiency, and accuracy by reducing the human element in its processes. This leads to lower cost of products and services and then these lower costs can be passed on to consumers. Although RFID technology offers many benefits and will have a profound impact on society if used properly, but if not, RFID has the potential to jeopardize consumer privacy, reduce or eliminate purchasing anonymity, and threaten civil liberties. The problem is how to implement this technology to take advantage its many benefits, while at the

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same time protecting consumers’ privacy, and civil liberties. This paper identifies some of the advantages, drawbacks, security, and civil liberties issues of using RFID in both the civilian and military community. The goal of this paper is to broaden ones individual knowledge of RFID and the security implications of it use.

Need for the Study

The need for the study is to adequately examine the benefits of RFID and weigh those benefits against the privacy and civil liberties concerns. Privacy advocates and some lawmakers are pushing the debate of some potential privacy abuses from the growing use of RFID. There are some privacy advocates that asked retailers not to force consumers to buy products with RFID tags and also advocate that consumers should be able to remove or disable the tags. So, businesses and the military need to know what is on the horizon to make an informed decision about RFID, and consumers must understand how RFID implementation will affect their privacy.

Definition of the Terms

Active tag: An RFID tag that has a transmitter to send back information, rather than reflecting back a signal from the reader.

Antenna: The tag antenna is the conductive element that enables the tag to send and receive data.

Backscatter: A method of communication between passive tags (ones that do not use batteries to broadcast a signal) and readers.

Bar code: A standard method of identifying the manufacturer and product category of a particular item.

Battery-assisted tag: These are RFID tags with batteries, but they communicate using the same backscatter technique as passive tags (tags with no battery).

Electronic Product Code: (EPC): A serial, created by the Auto-ID Center, that will complement barcodes.

Frequency: The number of repetitions of a complete wave within one second. 1 Hz equals one complete waveform in one second.

High-frequency: From 3 MHz to 30 MHz. HF RFID tags typically operate at 13.56 MHz. They typically can be read from less than 3 feet away and transmit data faster than low-frequency tags. But they consume more power than low-frequency tags.

Low-frequency: From 30 kHz to 300 kHz. Low-frequency tags typical operate at 125 kHz or 134 kHz. The main disadvantages of low-frequency tags are they have to be read from within

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three feet and the rate of data transfer is slow. But they are less subject to interference than UHF tags.

Modulation: Changing the radio waves traveling between the reader and the transponder in ways that enable the transmission of information.

Passive tag: An RFID tag without a battery. When radio waves from the reader reach the chip’s antenna, the energy is converted by the antenna into electricity that can power up the microchip in the tag.

Radio Frequency Identification (RFID): A method of identifying unique items using radio waves.

Reader (also called an interrogator): The reader communicates with the RFID tag via radio waves and passes the information in digital form to a computer system.

RFID tag: A microchip attached to an antenna that is packaged in a way that it can be applied to an object. The tag picks up signals from and sends signals to a reader.

Smart label: A generic term that usually refers to a barcode label that contains an RFID transponder. It's considered "smart" because it can store information, such as a unique serial number, and communicate with a reader.Transponder: A radio transmitter-receiver that is activated when it receives a predetermined signal.

Ultra-high frequency (UHF): From 300 MHz to 3 GHz. Typically, RFID tags that operate between 866 MHz to 960 MHz. They can send information faster and farther than high and low frequency tags. CHAPTER 2

REVIEW OF THE LITERATURE

Literature Review

RFID is an emerging tracking and identification technology that is quickly becoming common place in today’s commercial and military markets. It offers various benefits that help to increase organization efficiency and decrease overall operating cost. RFID does this by utilizing tagging systems for tracking purposes, which can be interrogated by radio waves sent from a reader to determine supplies location. RFID tags can be affixed to numerous items, such as cases, pallets, tools, equipment, clothing, etc. As RFID popularity continues to increase, there is mounting concerns from the Civil Liberty Union and other privacy advocates groups about the security and privacy of consumers who purchase items that are labeled with RFID tags.

What is RFID?

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Radio frequency identification is a generic term for technologies that use radio waves to automatically identify individual items. Though there are various methods of identifying objects using RFID, the most common is to store a serial number that identifies a product, and perhaps other information, on a microchip that is attached to an antenna. RFID tags can be used just like bar codes, to track numerous items in the supply chain. RFID does not require line of sight which is a significant benefit over bar codes, which have to be in sight of a scanner to be read. Many companies and military organizations are already benefiting from this wireless technology in term of money and time when it is integrated into their supply chain.

Industry Background

Although RFID is thought of as new technology, however, it actually has been around for sometime. The first application of RFID was during World War II, when it was used by the British Air Force as a reliable method for distinguishing returning friendly planes from enemy German bombers. Also, during the 1960s and 1970s, the Department of Energy and the United States military used RFID as a mean of security to keep track of nuclear material. In the early years of RFID existence, the private sector were lagging behind government agencies and did not start using this technology until the early 1980s. However, throughout the nineties a number of companies and applications were developed that rely heavily on RFID technology. Also during the nineties, the United States military began to explore ways to use RFID technology to keep better track of their assets, not just for security purposes, but also for logistical purposes as well. Today, RFID is being used extensively as a reliable tracking method in both the private sector and the military. This technology is also used in cars and key rings as a convenient ways to purchase gasoline and a host of other items at some gas stations. Many states are starting to take advantage of RFID technology by using it in their iPass system to charge road tolls automatically without ever having to stop the cars.

Difference between RFID and Bar Code

It is important to understand the significant differences between RFID and bar code to appreciate the benefits RFID can provide. Bar code and RFID are both identification technologies that hold data that is accessed by some type of reader. In actuality, they complement each other very well and can be used effectively side by side in many applications. Bar code is an optical technology and RFID is a radio technology. The ways these technologies exchange data account for most of the differences between RFID and bar code and help determine where each identification technology is best put to use.

Since RFID is a radio technology and does not require line-of-sight between the reader and the tag to exchange data, therefore tags can be read through packages, including cardboard containers and plastic wrap used to seal pallets. However, RFID is subject to interference from particularly from metal, so potential sources of interference must be recognized and accounted for during system planning. Because no line-of-sight is required, tagged objects can be read regardless of their orientation through the use of optimized RFID systems. Items do not have to be placed label side up onto conveyors to be read, paving the way for unattended handling. If workers are used to placing items on conveyors, they will be more productive if they do not have to locate and align labels when handling objects.

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RFID readers can automatically recognize and differentiate all the RF tags in their frequency range. This simultaneous processing capability provides additional flexibility for material handling, packaging and sorting operations, because there is no need to maintain spacing between objects to ensure they will be read. Its ability to read dozens or even hundreds of tags per second makes RFID ideal for high-speed sorting, receiving, cross docking, and other applications. RFID tags data capacity enables them to carry all the same information as bar codes and more. Just like bar code, RFID tags are available with different memory sizes and encoding options.

Key Components of an RFID System

A RFID tag consists of a chip attached to an antenna. RFID tags are developed using a frequency according to the needs of the system including read-range and the environment in which the tag will be read. Tags are either active, integrating a battery, or passive, having no battery. Passive tags derive the power to operate from the electro-magnetic field generated by the reader.

A RFID reader, can be fixed or handheld, like a barcode scanner, and is usually linked to a management information system or PC. The RFID reader handles the communication between the information system and the RFID tag.

A RFID antenna connected to the RFID reader can be of various size and structure, depending on the communication distance required for a given system’s performance. The antenna activates the RFID tag and transfers data by emitting wireless pulses.

A RFID station is made up of a RFID reader and an antenna. It can read information stored in the RFID tag and also update this RFID tag with new information. It generally holds application software specifically designed for the required task. RFID stations may be mounted in arrays around transfer points in industrial processes to automatically track assets as they are moving through the process.

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Figure 1. RFID Systems

Note: From Symbol Technology, (2004), Understanding the Key Issues in Radio Frequency Identification.

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Figure 2. RFID Solution Overview

Note: From Symbol Technology, (2004), Understanding the Key Issues in Radio Frequency Identification.

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Figure 3. Simplified Supply Chain

Note: From Symbol Technology, (2004), Understanding the Key Issues in Radio Frequency Identification.

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Cost and Frequency Range

There are two types of RFID systems, passive and active. Active tags are battery powered in order to transmit a signal to a reader, and are generally used for high-value goods that need to be tracked over long ranges such as 300 feet or less. Active tags are more expensive than passive tags, typically priced as much as $100 apiece. Passive tags are not battery powered, but instead, draw power from electromagnetic waves given off by a RFID reader. Most of the current passive tag and reader combinations have a range of about 6 feet but this is likely to increase in the near future as the private sector work to improve this existing technology. Passive tags generally cost as little as $0.40 each with prices likely to drop as they become more common place.

Currently, passive tags are the main focus of the military logistics support; because they are inexpensive and provide a practical method of labeling a large number of military assets. Also, since passive tags do not require a battery, they work well for military items that may have an extremely long shelf life and are expected to be inventoried indefinitely. These tags are so thin they can fit into the width of a paper label. In fact, many applications call for these devices to be embedded in a label to be placed on the package or asset.

The performance and memory characteristics for an application determine the correct RFID technology that should be implemented. The following are the most common types of RFID tags and their performance characteristics:

Low Frequency –operate at 125 kHz with a typical maximum read range of 10 inches (254 mm). This frequency band provides a shorter read range (< 0.5m or 1.5 ft) and slower read speed than the higher frequencies. LF RFID systems have the strongest ability to read tags on objects with high water or metal content compared to any of the higher frequencies. LF tags are typically slightly more expensive than HF or UHF tags. Typical low-frequency RFID applications are access control, animal tracking, vehicle immobilizers, healthcare applications, product authentication and various point-of-sale applications, such as Mobil/Exxon SpeedPass.

High Frequency—operate at 13.56 MHz with a typical maximum read range of 3 feet (1 meter) and feature a greater read- range and higher-read speed than LF systems. Also, the price of the tags is among the lowest of all RFID tags. Typical read range is less than 1 meter (3 feet), and the ability to read tags on objects with high water or metal content is not as good as LF systems but stronger than UHF systems. Applications include smart cards and smart shelves for item level tracking, and are also currently used to track library books, healthcare patients, product authentication and airline baggage. Another common application is

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maintenance data logging for sensitive equipment that needs regular checking such as fire suppression systems.

Ultra-High Frequency—operates at 433 MHz, 868 MHz, 915 MHz, or 2.45 GHz. Read range is typically 3 to 10 feet (1 to 3 meters), and the data transfer rate is faster than HF systems. One drawback to UHF systems is a limited ability to read tags on objects with or surrounded by high water or metal content. This is typically the frequency recommended for distribution and logistics applications and is the basis for the Electronic Product Code (EPC) standard driven through the Auto-ID Center. Of course, the EPC standard is the focus of DoD and Wal-Mart. The primary rationale for utilizing this frequency in the supply chain is the greater read range it offers over the other frequency ranges. However, UHF is also widely used for electronic toll collection systems on highways, manufacturing applications and parking lot access based on the greater range provided by the frequency.

Current Uses of RFID

RFID is a well-established technology for purposes such as access control and security; however, identification and tracking is rapidly emerging as key uses of RFID where the need for accurate, rapid, and reliable data collection is essential.

One of the most important features of RFID is that it allows the electronic capture of data and the transmission of data from readers to computers, from computers to network systems, and can be added to existing information and data systems. This means that RFID can not only replace expensive, and potentially unreliable paper systems but can also be used for activities that would be impossible or uneconomic to carryout with paper based systems. Listed below are some of the current and potential uses of RFID:

Animal identification Asset tracking Container tracking Customer or loyalty cards Electrical equipment such as transformers Fare collection using smart label tags Gas cylinder tracking Harsh/difficult environment usage Hazardous materials handling or ID Inventory control for either raw materials or finished products Laundry/textile identification Luggage tagging Manufacturing processes Meat packing Product identification Restaurant order control and processing Scales and weighing Service and maintenance systems

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Time and attendance Tool or equipment ID Vehicle identification including parking control

Commercial Uses of RFID

There are many commercial uses of RFID being developed and already in the market place. However, one of the most popular uses of RFID is the Mobil’s Speedpass payment system. This system allows users to quickly pay for gas at the pump or register, by simply waving their RFID card in front a RFID reader. The RFID reader interrogates the Mobil’s database, which includes the user’s credit card number and an associated unique ID number embedded into his or her RFID card, to make the appropriate charges. Also, there are several public transit systems that have begun issuing payment cards embedded with RFID technology. Periodically, commuters add money to their payment cards by using a kiosk or direct deposit. These cards, once swiped in the subway turnstiles, let commuters through and automatically deduct the transit fare from their accounts. Like the RFID cards used for the Mobil’s Speedpass payment system, they also have an associated unique ID number that identifies the owner of that card.

The airlines industry is beginning to utilize RFID technology to track passengers’ bags, with Delta Air Lines leading the way in this venture. The airlines’ current tracking systems rely heavily on barcodes affixed to bags with adhesive labels, which must be manually scanned. This method is very slow, unreliable, and requires a vast number of employees to accomplish that task. Delta is currently testing a system that would embed RFID tags in the printed labels to allow baggage tracking using RFID readers placed at strategic points, including luggage carousels. Today, if a passenger bag is misdirected, airlines struggle to identify the specific lost bag, which might have been sent anywhere in the country. By using RFID, Delta hopes to be able to pinpoint a bag’s location and automatically send a wireless message to a staff person in a position to pull the bag and send it to its proper destination.

The one use of RFID that has really captured the attention of corporate America and privacy activists is the replacement of barcodes on consumer goods with RFID tags. These tags will allow companies to streamline their entire supply chain from manufacturing to distribution to retailer. This will help to reduce companies’ warehouse costs by getting automatic updates constantly concerning their inventory levels. Suppliers will benefit from this technology by having a method that allows better tracking of their returnable assets such as pallets and containers. RFID technology also promises to help manufacturers and retailers prevent backshop theft, which is estimated to cost companies billions of dollars each year. The ability to identify whole shipments of goods automatically upon arrival at a loading dock could significantly reduce labor cost.

Retailers also expect RFID to result in greater customer satisfaction by using smart shelves that keep track of their stocked level and send automatic messages to the storeroom when an item level has dropped to a certain threshold; thereby ensuring customers always find shelves full. If this information is shared with suppliers, they will be better able to match supply to demand and reduce inventory sellouts. Also, consumer products that are tagged with unique identifying numbers at the item level could enable returns without a receipt, as well as the much-touted self-

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checkout. Unique identification could also reduce waste during product recalls by pinpointing the few defective items rather than sacrificing a whole batch.

Military Uses of RFID

The military quickly recognized the potential benefits of RFID and has spent nearly $100 million over the last decade implementing this technology to track everything from rations to uniforms to tanks. Its ultimate goal is to prevent frontline troops from suffering supply shortages, as well as reducing the amount of lost, misplaced, and unused supplies. The military main focus used to be on active RFID tags that are used to track vehicles, cargo containers, and other large and valuable assets from long distances. However, lately its focus has shifted away from active tags to passive tags.

Currently, passive tags are the main focus for military logistics support; because they are inexpensive and provide a practical method of labeling a large number of military assets. Also, since passive tags do not require a battery, they work well for military items that may have an extremely long shelf life and are expected to be inventoried indefinitely. These tags are so thin they can fit into the width of a paper label. In fact, many applications call for these devices to be embedded in a label to be placed on the package or asset.

Department of Defense (DoD) Mandate

In October 2003, DoD mandated the use of RFID for its defense logistics and the broader supply chain. Suppliers were given a little more than a year to begin attaching RFID tags to virtually all products delivered to the military. It mandated that these tags must be attached to individual pieces, case, or pallet by January 2005, with the only exception being for bulk goods such as sand, gravel or liquids.

The main reason why DoD mandated the use of RFID technology is because it was used during Operations Enduring Freedom and Iraqi Freedom, and the military achieved major gains in efficiency in moving needed goods to the front lines and avoiding the massive back-ups that plagued the supply chain during the 1991 Gulf War. During the Gulf War, there were thousands of containers of supplies shipped to Kuwait, but were never received by the military component that needed it. After the war ended, there were thousands of these containers left stacked in the desert because nobody knew what was inside them. DoD realized that it can not afford these type of inefficiencies, especially with the increasing mobile nature of today’s military.

DoD believes that implementing RFID will minimize time spent through the normal means of inventory processing, which will improve data quality, items management, asset visibility and maintenance of materiel. Also, it will enable DoD to improve business functions and facilitate all aspects of the DoD supply chain.

DoD policy currently requires the use of passive RFID tags, as opposed to the active tags that have been used by the military for more than a decade. Although active tags have considerably greater transmission capabilities, with a range of about 300 feet, compared with about 10 feet for the passive tags, the difference in cost is significant. Passive tags cost less than $1 each, while

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active units are priced at about $100 apiece. While cost is the greatest limitation to using RFID technology, there are other hurdles that the military must overcome, such as equipment and training costs, information system compatibility, operational locations, and distances, security, and timeliness. Although the policy specifically mentions passive tags, DoD says that military logisticians will continue to evaluate both types of tags to determine their ideal uses.

Benefits of RFID

RFID-based systems provide efficiency and accuracy similar to those of printed bar code systems; however, they offer additional benefits such as:

RFID supports read/write operation. RFID's real-time characteristic enables efficient updating of information contained within the tag as an item moves from one point to another. For example, a tag on a delivery truck can contain the truck's manifest, which can be updated easily as the driver adds and removes items.

RFID is not limited to contact operation. RFID tags can be read through nonmetallic materials, and a reader does not have to touch a tag, making RFID ideal for cluttered, dirty, wet, and harsh environments. Unlike bar code scanners, RFID scanners can read tags through mud, dirt, paint, grease, wood, cement, plastic, water, and steam.

RFID tags can be hidden. Because RFID is not limited to line-of-sight operation, you can embed tags under skin, inside clothes hems, and within the pages of a book, preserving the item's usability and aesthetics.

RFID tags are very secure. RFID tags are virtually impossible to counterfeit, because an unalterable permanent serial code prevents tampering. This guard against an unauthorized user changing data corresponding to a particular item.

RFID tags are read at a faster speed. The time it takes for an RFID reader to activate the tag and receive the associated information stored in the tag is approximately 40 percent faster than scanning traditional printed bar codes.

Multiple RFID labels can be read at one time, speeding up the data collection process. A scanner can read each tag independently when mixed in a pile, distinguishing among multiple items based on each one's unique identification number.

Commercial Benefits of RFID

Lowering Costs – According to the US National Retail Security Survey, approximately $5.8 billion worth of inventory was lost in 2001 due to administrative errors alone. RFID not only ensures accuracy of information, but also limits the amount of error-prone human interaction that is needed. With

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information that is updated in real-time, RFID can further reduce costs by allowing companies to decrease shrinkage.

Increasing Revenue – With U.S. retailers losing approximately 3.8% of sales per year as a result of out-of-stock inventory, greater inventory control and increased product availability can have a major impact on increasing revenues. RFID tags allow companies to capture and track a variety of data on goods. This information aids in the development of accurate inventory forecasts.

Decreasing Working Capital – Because of the speed and accuracy of RFID, orders can be filled in a shorter amount of time, allowing for quicker product availability. Reducing this order cycle time decreases the need for an abundance of safety stock.

Reducing Fixed Capital – With RFID, companies can better manage fixed capital by tracking assets such as totes and pallets. This reduces the need for replacement due to lost items and cuts back on the amount of redundant equipment that are under utilized. Additionally, by increasing the speed at which a forklift can perform a certain task, the same amount of work can be completed with fewer vehicles, further reducing the costs of these fixed assets.

Drawbacks of RFID

The primary problem facing RFID tagging is the fragility of the tiny chips and antennas, because any damage to the chip makes the tag unusable. The process of assembling, printing and applying the label containing the tag alone presents the potential for damage, not only physical damage, but also the generation of static discharge that can corrupt the information on the chip or make it unreadable. This is why virtually every print-and-apply system for RFID labeling involves a verification step to reject tags that are defective coming into the print cycle and verifying the success of the encoding after.

Potential Trouble with RFID

Privacy and consumer organizations have called for manufacturers to voluntarily hold off on their plans to equip consumer goods with RFID devices, because of fear of misuse. They are worried that instead of using RFID tags to track boots, blue jeans and books, these tags will be used to track customers. Although RFID is not a household word today, but within the next few years manufacturers hope to put it into many household products. Gillette plans to put the tags into packages of its razors and blades so that its high-value consumer goods can be tracked as they move from the factory through distribution and eventually to the store shelf. Benetton had announced similar plans to weave RFID tags into its designer clothes; however, the company reversed itself after a grassroots consumer group launched a worldwide boycott of Benetton products.

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Both Wal-Mart and the military told their hundred largest suppliers that cartons and pallets must be equipped with unique RFID tags by January 2005. Meanwhile, MasterCard and American Express have been testing RFID-enabled credit cards. Mobil has been pushing its RFID-based Speedpass since 1997. And most high-end cars now come with RFID immobilizer circuits that will not let the cars start unless the correct RFID-enabled car key is in the ignition. This wireless technology has the potential of saving businesses billions of dollars.

So why did the American Civil Liberties Union, the Electronic Frontier Foundation, The World Privacy Forum and a dozen other organizations ask for a voluntary moratorium on RFID technology in consumer goods? Because the use of RFID could enable an omnipresent police surveillance state, it could erode further what is left of consumer privacy and make identity theft even easier than it has already become.

RFID is considered by many to be a potentially dangerous technology because its chips can be embedded into products and clothing and covertly read without consumers’ knowledge. A small tag embedded into the heel of a shoe or the inseam of a leather jacket for inventory control could be activated every time the customer entered or left the store where the item was bought; that tag could also be read by any other business or government agency that has installed a compatible reader. Unlike today's antitheft tags, every RFID chip has a unique serial number, which can be used by stores to easily track each customer's comings and goings. RFID readers could also register the RFID tags that customers’ carry their car keys and proximity cards that some office buildings use instead of keys.

The problem here is that RFID tags can be read through your wallet, handbag, or clothing. It's not hard to build a system that automatically reads the proximity cards, the keychain RFID immobilizer chips, or other RFID-enabled devices of every person who enters a store. A store could build a list of every window shopper or person who walks through the front door by reading these tags and then looking up their owners' identities in a centralized database. No such database exists today, but one could easily be built.

Despite these fears, the privacy activists aren't saying that RFID technology should be abandoned. As it is, the technology is already in broad use currently for the tracking of pharmaceuticals (and the elimination of dangerous drug counterfeits), for tracking shipments of meat (so that contaminated batches can be rapidly identified and destroyed) and even for tracking manufactured goods to deter theft and assist in inventory control. However, this technology should never be used to secretly unmask the identity of people who wish to remain anonymous.

Civil Liberty Concerns

RFID is an item-tagging technology with profound societal implications. If used improperly, it has the potential to jeopardize consumer privacy, reduce or eliminate purchasing anonymity, and threaten civil liberties. While there are beneficial uses of RFID, some attributes of the technology could be deployed in ways that threaten privacy and civil liberties. This has generated such a privacy concern, which has directly lead to legislative proposals in six states to limit RFID use. The concern for privacy is mainly centered around individuals not knowing they have been associated with a RFID tag or who is gathering information about them and for what

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purpose. Listed below are some ways that information might be gathered on individuals without their knowledge:

Hidden placement of tags. RFID tags can be embedded into/onto objects and documents without the knowledge of the individual who obtains those items. As radio waves travel easily and silently through fabric, plastic, and other materials, it is possible to read RFID tags sewn into clothing or affixed to objects contained in purses, shopping bags, suitcases, and more. 

Unique identifiers for all objects worldwide. The Electronic Product Code potentially enables every object on earth to have its own unique ID. The use of unique ID numbers could lead to the creation of a global item registration system in which every physical object is identified and linked to its purchaser or owner at the point of sale or transfer. 

Massive data aggregation. RFID deployment requires the creation of massive databases containing unique tag data. These records could be linked with personal identifying data, especially as computer memory and processing capacities expand.

Hidden readers. Tags can be read from a distance, not restricted to line of sight, by

readers that can be incorporated invisibly into nearly any environment where human beings or items congregate. RFID readers have already been experimentally embedded into floor tiles, woven into carpeting and floor mats, hidden in doorways, and seamlessly incorporated into retail shelving and counters, making it virtually impossible for a consumer to know when or if he or she was being scanned.

Individual tracking and profiling. If personal identity were linked with unique RFID tag numbers, individuals could be profiled and tracked without their knowledge or consent. For example, a tag embedded in a shoe could serve as a de facto identifier for the person wearing it. Even if item-level information remains generic, identifying items people wear or carry could associate them with, for example, particular events like political rallies.

Opponents of RFID tags have proposed measures to side-step the chips' relentless information-gathering, ranging from disabling the tags by crushing or puncturing them, to simply boycotting the products of companies which use or plan to implement RFID technology. One way to destroy the tags is to microwave them for several seconds. Another method is to obstruct the information gathered by RFID readers by using blocker tags. When carried by a consumer, blocker tags impair readers by simulating many ordinary RFID tags simultaneously. Blocker tags can also block selectively by simulating only designated ID codes, such as those issued by a particular manufacturer.

In an attempt to ease consumers' fears, companies have argued that most items tagged with RFID chips can't be tracked beyond an operating distance of about five feet. However, while this may be true today, industry experts say plans for building far more sensitive RFID signal receivers are in the works.

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As RFID technology becomes more advanced, consumers may ultimately lose all ability to evade products implanted with chips. Corning researchers have developed tiny, bar coded beads that are invisible to the human eye. The microscopic beads can be embedded in inks to tag currency and other documents, and even attached to DNA molecules. They can also be added to substances like automobile paint, explosives, or other products that law enforcement officers or retailers have a strong interest in tracking. Researchers say the technology could be ready for commercial use in three to six years.

Future Commercial Uses of RFID

Currently, RFID technology is still too expensive to be used by most retailers. The cost per electronic tag now stands at about 30 cents apiece, but is expected to fall to as little as three cents in the next three years. RFID tags will probably not become pervasive until the per chip cost dips below one penny. Retailers will still have to purchase sensors to read the tags, which can cost $1,000 each.

In spite of the costs, some retailers are willing to pay the price for the insight RFID tags provide into the lives of consumers. Over the next few years, industry experts expect to see a broad range of RFID pilots, and even several fully integrated systems, launched. A handful of corporations have already signed on, and are moving ahead with plans to embed products with RFID tags. Recently, Microsoft Corporation announced that it would develop software that will enable retailers, manufacturers, and distributors to use RFID tags to track goods within stores and factories, as well as programs specifically designed to use the new retail tagging technology.

Future Military Uses of RFID

The military outlook for future use of RFID is to integrate it with satellite communications to resolve problems with its current fixed systems. There are numerous advantages to this proposed implementation, the first, and most obvious, is the global coverage capability offered by the satellite technology. This will enable them to cover the Polar Regions and close all gaps in areas currently over the oceans. Other advantages of integrating RFID and satellite communications, according to the Logistics Transformation Agency (LTA), include the following:

Independence from foreign/local infrastructure Larger data capability

Worldwide frequency approval

Encryption

Single point connectivity with the Defense Information System Network

Protection of sensitive information such as location and user identity

DOD-controlled access and an electronic intercept system for further data protection.

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     However, the LTA cited the following challenges associated with integrating RFID and satellite communications:

Need to improve RFID devices for satellite communications Need to update RFID technology already in use

Need to shift RFID requirements to a more mobile design to match combatant commander requirements in the area of operation

The LTA noted the continuous need to research, analyze and evaluate commercially proven satellite communications technology and RFID integration, as well as issues of interoperability, cost, global coverage, technical constraints, in-transit visibility connectivity, and satellite providers. Actually, the technologies for integration of RFID and satellite communications currently exist. The DOD’s push for improved asset visibility will continue until global success is achieved. The challenge will be to train logistics personnel on how they impact the DOD’s total asset visibility and in-transit visibility capabilities.  

Another future use of RFID that all branches of the military are exploring is the idea of embedding an RFID tag in dog tags as a way to track individuals on the battle field. This will be a very reliable method to locate captured or lost soldiers. There is also a plan to use these high tech dog tags to track exposure to chemicals, radiation, biological agents, or other harmful environments. Many of the environments a soldier might encounter may not have an acute physical effect but might instead lead to chronic problems later in life after a prolonged exposure. A tag that could be used to provide a warning to a commander in the field may give them time to rotate soldiers out of harms way, thereby decreasing the possibility of future illness.

Also the military is looking at RFID as a way to prevent friendly fire accidents. The Air Force is currently using active transponders to identify friendly aircraft by radar. It is possible other branches of the armed forces might someday use active RFID to identify soldiers on the ground. As of December 3, 2004, there were 241 US Soldiers listed as killed in action in Iraq due to accidents or friendly fire. Although there will always be some friendly fire casualties in any war but it is likely many of these incidents could have been prevented if the victims were wearing some type of active radio identifier tag.

Military Lessons Learned

There were many lessons learned from Operation Enduring Freedom and Operation Iraqi Freedom which indicate that RFID tags are an underused resource within the continental United States (CONUS) and in the combatant commanders’ areas of responsibility. It was concluded that there are several reasons for the lack of utilization of the RFID technology:

Many users are not aware of the capabilities of RFID technology.

Combatant commanders have not required use of RFID technology. In fact, until Operation Iraqi Freedom, none of the nine combatant commanders had mandated use of RFID tags.

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The army does not always practice in peace what it will be called on to do in war. RFID tags normally are not used during training; RFID has not been instituted in CONUS as part of the distribution system for sustainment cargo; and the Army Forces Command has not required RFID use of unit moves except on a case-by-case basis.

The tags may fail. This usually occurs because a tag has fallen off a pallet or has been damaged or because the battery in the tag has died.

The tags are not visible in the in-transit visibility (ITV) server. This occurs when there is no interrogator at a location to scan the tags and put information into the system or when the interrogator has failed because of a loss of power, lack of connectivity, or mechanical failure.

RFID was not created for ITV, nor does it provide a great deal of usable ITV data at present. RFID can tell you only where the cargo was last interrogated, but not where it is currently located. In order to have current location data, RFID must be integrated with other personnel and cargo systems. The military has yet to complete this integration at this point; however the pilot project to accomplish this seamless integration is in full swing.

Summary of the Literature

The literature review shows that RFID is revolutionizing the methods used by commercial businesses and military organizations to track and identify merchandize. It offers remarkable benefits in supply chain management and inventory control, which directly result in reduce product and labor cost. RFID is similar to bar code, whereby they both are identification technologies that hold data that is eventually interrogated by a reader. However, RFID offers distinct advantages over bar code because it does require light-of-sight between a reader to exchange data and its ability to recognize and differentiate between frequency ranges. Although RFID is not a household word among the general public; however, its popularity continues to grow with businesses and military organizations because of its profound potential to increase organizations’ efficiency. RFID is currently used to track all source of products and services from large pallets to individual clothing items. There is an abundance of on-going research to expand the use of RFID into other areas in the near future. Despite all of the benefits gained from the use of RFID, there are some privacy and security concerns. The Civil Liberty Union has called for a moratorium on the use of RFID due to privacy issues. It is concern that RFID could be used improperly to track not only what a consumer purchase, but also track an individual movement without their knowledge. There are debates in Congress on what to due to ensure individuals’ privacy is protected; however, Congress has yet to enact any legislation.

CHAPTER 3

METHODLOGY

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Design, Participants, and Procedures

The research method used to gather information concerning the RFID is from the Air Force Certificate to Operate documents and the Internet. Information from various websites was compared to determine the consistency of the written articles. The validity of the articles on the military aspect of RFID was compared against government documentation on the same subject. My research begin by taking a look at the history of RFID and then stepping through major events that had a profound implications on improvement of RFID.

Assumptions

The following assumptions are made concerning RFID

When the price of RFID drops from around 40 cents to cents there will be host of new businesses implementing this technology.

The global supply chain security and efficiency is will prosper once an international standard frequency developed, to reduce interference among devices.

Security and privacy concerns will decrease once the public is educated on RFID.

There is going to be strict legislation on the proper use of RFID.

Limitations

Although RFID offers many benefits, there are several limitations associated with the technology that should be thoroughly evaluated before making a final decision to implement RFID tags or not:

Cost: RFID tags will always be more expensive than barcodes; however they often deliver more benefits in most applications than barcodes.

Moisture: Depending on the technology used, radio waves may be absorbed by moisture in the product or the environment.

Metal: Radio waves are generally reflected by metal. This means that tags can be hidden by metal in the environment or their signal may be attenuated.

Electrical Interference: Electronic noise, such as fluorescent light or electric motors, can sometimes interfere with radio frequency communications.

Accuracy: It can be difficult to identify and read a specific tag from all the others that are within the range of a reader. For example when reading the tag on a pallet the reader may also read the tags on all the packs on the pallet too. Failure to read a tag is not picked up by the reader.

Over Compensation: Storing a lot of data on a tag may be useful, however this will increase both the cost of the tag and the time required to read it. Often, a simple identity number is sufficient.

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Security: Being able to update the tag is useful, but ensuring that the update has been done correctly and by an authorized party is important.

CHAPTER 4

Results, Analysis and Discussion

The number of applications of RFID is steadily increasing, thereby creating the need for additional electronic data management requirements. This is evident by businesses and the military constantly exploring more advanced uses of RFID. Some tire manufacturers are embedding RFID to try to accurately predict the time to failure of tires. Pharmaceutical companies are using this technology to track medications and decrease the possibility of theft. Airlines are considering using RFID to optimize their aircraft maintenance and the turnaround time of airplanes at the gates. Starbucks is considering using RFID to enable its suppliers to make after-hours deliveries to stores to avoid disrupting their staff’s key function of selling coffee.

These capabilities will require a host of different systems generating an abundance of data sets. There will be different data set because of the various systems that are used and the type of information that is being track by a particular system. For example, some systems might be tracking price and quantity while others are tracking weight and size. These differences can create significant problems whenever an organization attempts to analyze a product or service performance. In fact, the amount of data RFID will generate is going to be difficulty for most organizations to store it, let alone analyze it. This is going to create a need to develop a centralized system that can lump different data together to apply business intelligence tools and analytics to obtain more detailed information and insight into trends such as stock visibility, return management, product assortment performance and promotion campaign effectiveness, among other uses.

CHAPTER 5

CONCLUSIONS AND RECOMMENDATIONS

RFID is the technology that has the potential to revolutionize the private sector and the military logistics support. It represents a significant step up from the traditional bar code technology and offers a highly reliable and accurate method of data capture without manual intervention. Organizations that successfully implement RFID technology will reap the benefits of increased efficiency and decrease costs in their daily operations. The benefits that RFID offers will not be realized unless technological hurdles can be overcome. These hurdles are the standards for capturing and exchanging RFID information, which is constantly being drafted and redefined daily. The lack of standards is hampering the effort of widespread adoption of RFID. Many organizations are merging RFID with their existing bar code system to create a hybrid legacy system to get the best benefits that each technology has to offer.

Organizations must realize that RFID automates data capture, but it is only by integrating that data capture process into core business processes and business systems that real improvements in

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efficiency, cost reduction and enhancements to customer relationships can be achieved. Organizations need to take a strategic look at the development of an information management structure that exploits the availability of real-time, accurate information and amend and develop business applications that drive business improvements. Once widespread adoption and standards are instituted for RFID, the price of the tags is expected to decrease and eventually will be low enough to apply the technology for item level tagging. If the price of RFID tags drops to a few cents, new market opportunities will open up, especially in sectors such as apparel, delivery, manufacturing, and pharmaceuticals.

RFID is moving closer everyday toward widespread adoption, as evident by the US Department of Defense requires their suppliers to ship products with RFID tags from 2005 onwards. It has been predicted that by 2010, RFID should be commonplace throughout industries. This prediction has generated major concerns for privacy from the Civil Liberty Union and other privacy abdicate groups. RFID, like many other data tracking technologies, commonly elicit privacy concerns. These concerns should be investigated thoroughly; however, until those fears are proven sound, legislators and regulators should resist constraining the use of RFID technology. Otherwise, they risk distorting or aborting what could be one of the most beneficial developments in quite sometime.

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REFERENCES

Brewin, Bob (2003), Military Orders Suppliers to Use RFID Technology. Retrieved 10 Feb 05 from http://www.computerworld.com/softwaretopics/erp/story/0,10801,85978,00.html

Broersma, Matthew (2003), US Military throws weight behind RFID. Retrieved 15 Feb 05 from http://news.zdnet.co.uk/business/legal/0,39020651,39117374,00.htm

Carpenter, Robert F. (2004), Potential uses for RFID Data. Retrieved 20 Feb 05 from http://www.almc.army.mil/alog/issues/JanFeb04/RFID_Data.htm

Donnelly, Harrison (2003), DoD Mandates RFID use. Retrieved 10 Feb 05 from http://www.milary-information-technology.com

Gilmore, Gerry H. (2004), Radio ID Tagging Aims to Improve Military Logistics. Retrieved 6 Mar 05 from http://www.defenselink.mil/news/Sep2004/n09142004_2004091411.html

Gross, Grant (2004), RFID and Privacy: Debate is heating up in Washington. Retrieved 6 Mar 05 from http://www.nefusion.com/Home/ggross.html

Hall, Curt (2005), RFID Analysis Issues and Opportunities. Retrieved 10 Mar 05 from http://www.computerworld.com/printthis/2005/0,4814,99715,00.html

Information Gatekeepers, Inc. (2004), Radio Frequency ID Market & Technology Assessment Study. Retrieved 12 Mar 05 from http:// www.wavereport.com/archives/2004/04190101.htm

Jackson, William (2004), Groups raise privacy concerns over plans for RFID. Retrieved 6 Mar 05 from http://www.gcn.com/vol1_no1/daily-updates/25520-1.html

NCR Corporation, (2003), Fifty uses of RFID in retail. Retrieved 25 Feb 05 from http://www.usingrfid.com/features/read.asp?id=3

Psion Teklogix Inc., (2004), Understanding RFID and Associated Applications. Retrieved from http://www.psionteklogix.com/assets

Rand Corporation, (2005), Privacy in the Workplace. Retrieved 5 May 05 from http://www.rand.org/publications/RB/RB9107/rand_RB9107.pdf Rutner, Stephen M. (2004), Embedded chips and radio: A look at the future. Retrieved 5 Mar 05 from http://www.almc.army.mil/alog/issues/JanFeb04/Embedded_Chips.htm

Symbol Technologies, (2004), Understanding the Key Issues in Radio Frequency Identification.

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Retrieved 8 Mar 05 from http://www.redlinesolutions.com/dl_files/symbol_wp_rfidissues.pdf

Zebra Technologies, (2002), RFID: The next generation of AIDC. Retrieved 8 Mar 05 from http://www.zebra.com

Zebra Technologies, (2004), Zebra’s RFID Readiness Guide: Complying with RFID tagging mandates. Retrieved 8 Mar 05 from http://www.zebra.com

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