RFID. John N. Sims B.S. Management Information Systems ... BA 395 MS1: IT Governance, Information Trust, and Risk Management
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1 . John N. Sims B.S. Management Information Systems RFID BA 395 MS1: IT Governance, Information Trust, and Risk Management Professor Mike Shaw Term Project April 26, 2007
2 RFID Term Project Table of Contents I. Abstract.3 II. Introduction..4 a. What is RFID?....4 III. Review of technology....5 a. What are the competing technologies?.. 5 IV. Applications/ Case Studies a. Applications... 7 b. Case Studies 11 V. Standards VI. Discussion...16 a. What are the drawbacks? VII. VIII. Conclusion References
3 Abstract Radio Frequency Identification (RFID) systems are being implemented in various applications from supply chains to transportation. Companies want to maximize efficiencies in their processes and systems so that they can take a competitive advantage over their competitors. This new technology is opening new doors for companies as it becomes more cost effective and widely used throughout industries. Although, there are benefits with this RFID technology, companies will face privacy concerns whether real or perceived by its customers. Privacy management is a huge concern; therefore methods to implement these systems will have to be developed to ensure that the information is protected. These protections will have to be implemented with laws in mind, such as HIPAA. The problems expressed with this technology show how emerging new technologies can disrupt the balance of privacy, benefits, safety of public, and security. You will need to understand the RFID technology and its applications, competing technologies, regulations and privacy issues, and implementation methods so that you can determine if this new technology can provide benefits to your business. In this paper I will define this technology, compare it to competing or supporting technologies, and discuss various applications. Also, I will discuss proposed implementation best practices. Finally, RFID standards will be overviewed and some of the potential drawbacks of this technology. Keywords: RFID, Applications, Best Practices, Standards 3
4 Introduction What is RFID? Radio Frequency Identification (RFID) is a method to identify items using radio waves. These systems are usually comprised of two components: tags and readers. The tag, also known as transponder, is made up of a microchip which stores the data, antenna, and a carrier that the microchip and antenna are mounted. The reader depending on type of tag is responsible for sending and receiving data in the form of radio frequency waves to and from the tag by the antennas. The tags are separated into two categories: active and passive. Active tags are powered by a battery that broadcasts a signal to the reader over distances greater than 100 feet. They are usually used to track valuable goods such as large containers of goods. Next, you have the passive tags, which do not have a battery. They get power from the readers, which transmit a low power radio signal through the antenna to them. Passive tags are used normally over shorter distances, normally less than 10 feet. They are ideally used to track less valuable items or individualized items. The application determines what type of tag you will use. There are many different types of radio frequencies that RFID operates on. The three primary frequency bands that have been allocated are low frequency (125/ 134 KHz), high frequency (13.56 MHz), and ultra high frequency (850 MHz to 950 MHz and 2.4 GHz to 2.5 GHz). The following chart outlines the basic properties of these frequencies: 4
5 Figure 1. Tag Frequency Basic Properties (Paxar) The microchips are also broken down into read-only and read-write. The read-only chips have their information stored on them during the manufacturing process and can not be changed; only the information can be read. On the other hand, the read-write chips can have their information stored or changed when the reader is within range of the tag. Review of technology What are the competing technologies? What are the competitors for this new technology? Currently, there are three main competing technologies including barcodes, Electronic Article Surveillance (EAS) systems, and contactless smartcards. First, RFID s evolved as an attempt to provide a better alternative to bar code labels used extensively in product tracking (Tutorial- Reports.com). Barcodes require a direct line of sight and are read only. On the other 5
6 hand, RFID s can be read/write capable which do not require direct line of sight (Tutorial-Reports.com). Next, the EAS systems are simple electronic tags that can be turned on or off. As a customer checks out an item the tags are turned off. When someone passes a gate where a tag has not been turned off, an alarm will sound (RFID Journal, LLC). RFID s provide even more security in a store because you could track the product if it is stolen. Finally, you have the contactless smart cards. These cards are most commonly found in corporate or government identification cards and payment cards. They require a terminal to access the information on the cards but are more secure than the RFID s. The following graph shows the typical uses for both contactless smart cards and RFID s compared to sensitivity of data on them: Figure 2. Competing technology comparisons (Smart Card Alliance). Although at first these competing technologies were seen as eventually being replaced by RFID that isn t the current perception anymore. Many companies are 6
7 looking for ways of integrating each of them to improve their business processes. RFID is the future for many companies as the RFID technology becomes more widespread and the costs are driven down. Applications/ Case Studies Applications RFID technology is proving to have many different types of applications from transportation, banking, security, and medical. RFID use is becoming widespread, in both consumer and industry functions, all over the world. One of these transportation methods is the open road tolling systems. Open road tolling systems have been implemented in states such as Illinois (I-Pass), Florida, California, and the Northeast states (EZ Pass). Also, these systems are being linked so that transponders are compatible by either system. An RFID tag placed on the windshield of cars are detected going under a series of sensors, which will automatically charge the toll fee to a tied account. Governor Blagojevich says that this RFID system will create, a new Tollway system for the 21 st century, so that commuters can get where they re going faster and easier (Illinois Tollway). Also, Moscow Metro, Hong Kong mass transit, and Taipei, Taiwan all have introduced RFID enhanced smart cards for mass transit systems. A card with an RFID tag is used to record and collect transit fare and charge it to a consumer account. Even in the US, the New York City subway system conducted a trial using RFID to pay for train fares through Mastercards'PayPass (Wikipedia). 7
8 Figure 3. Retrofit Plaza for I-Pass (Illinois Tollway) Figure 4. I-Pass readers and transponders (Federal Highway Administration) Passports in many countries are being embedded with RFID technology. Starting in Malaysia in 1998, information stored on the passport RFID includes all the information and digital picture represented in print on the passport, along with travel records. The United States have followed suit by releasing regulations that all, U.S. passports issued after October 2006 will contain embedded (RFID) chips (Sullivan). They will store such information as name, nationality, sex, date of birth, place of birth, and digitized photograph of the passport holder securely. International standards for passport RFID s are being developed by the International Civil Aviation Organization (ICAO), a United Nations agency. 8
9 RFID s are now also used to track goods, vehicles, and livestock in transit. Parcel, airline baggage, livestock, and pharmaceutical item tracking are increasingly using RFID technology. RFID has been used in both tracking and theft protection of vehicles since the early 90 s. Implanted in many car keys, without the correct RFID, the vehicle will not start. Toyota has implemented the Smart Key, an active RFID that will let you open the doors and start the car from a 3 foot distance, as long as the correct signal is acknowledged. RFID chips are also implanted in many pets and livestock for identification and even tracking purposes. Research into RFID use in nontraditional ways is being conducted by many organizations as well. Experiments on human implantation of RFID chips, with modified animal information RFID tags, have been implanted in human volunteers. The implanted RFIDs can be used for identification, payments, access to restricted areas, as well as long distance tracking. The Food and Drug Administration has approved the sale of an implantable human identification chip called Verichip in October 2004 (Holtzman). Hospitals are exploring implanting RFID tags on patients. These tags would provide patient information, prognosis, and allergies which in turn can reduce errors and prevent accidents. However, there have been disputes against said practice; laws have been passed in many states to make it illegal for citizens to get an RFID chip implanted, due to the fear of identity theft, fraud, and religious debates. In May 2006, Wisconsin was the first state to pass a bill prohibiting forced chip implants in humans (Holtzman). Many retail and supply chain uses for RFID are becoming prominent. Replacements for UPC barcodes and product check-out in retail may be implemented in many retail locations within the next few years. RFID on groceries and items can almost eliminate 9
10 checkout times and labor costs. Products travel under a sensor and the cost is calculated and charged automatically. Incoming and outgoing inventory to retail stores and factories can be tracked and recorded instantaneously and without error upon entering the facility. This will reduce both costly errors and labor, by reducing discrepancy between recorded and actual inventory level and labor costs associated with recording and stocking. Potential applications for RFID may be identified in virtually every sector of industry, commerce and services where data is to be collected. The attributes of RFID are complimentary to other data capture technologies and thus able to satisfy particular application requirements that cannot be adequately accommodate by alternative technologies. The principal areas of application for RFID that can be currently identified include: Transportation and logistics Manufacturing Security There are also ranges of miscellaneous applications which are currently growing in application numbers. They include: Road toll management Postal tracking Animal tagging Airline baggage tracking Waste management Specific areas include: Electronic article surveillance - clothing retail outlets being typical. Protection of valuable equipment against theft, unauthorized removal or asset management. 10
11 Controlled access to vehicles, parking areas and fuel facilities - depot facilities being typical. Automated toll collection for roads and bridges - since the 1980s, electronic Road-Pricing (ERP) systems have been used in Hong Kong. Controlled access of personnel to secure or hazardous locations. Time and attendance - to replace conventional slot card time keeping systems. Animal husbandry - for identification in support of individualized feeding programs. Automatic identification of tools in numerically controlled machines - to facilitate condition monitoring of tools, for use in managing tool usage and minimizing waste due to excessive machine tool wear. Identification of product variants and process control in flexible manufacture systems. Sport time recording Electronic monitoring of offenders at home Vehicle anti-theft systems and car immobilizer (AIM, Inc.) A number of factors influence the suitability of RFID for given applications. The application needs must be carefully determined and examined with respect to the attributes that RFID and other data collection technologies can offer. Where RFID is identified as a contender further considerations have to be made. These include the application environment, from an electromagnetic standpoint, standards, and legislation concerning use of frequencies and power levels. Case Studies There is a lot of research and development being devoted to learning more about this new technology. Developing best practices for your processes and implementation of these systems is vital to their success. Next, I will discuss some of the proposed best practices that companies should take in an implementation of a RFID system. 11
12 According to Zebra Technologies Corporation, there are 10 best practices offered from successful RFID implementation featuring Wal-Mart suppliers: Pacific Cycle, Victory Land Group, and Beaver Street Fisheries. First, companies are encouraged to start early. This will help to research the technology, determine partners with whom to work, and start the learning in their organization. Secondly, make sure to determine the right supplies needed for your implementation. If you do not purchase the right components such as tags, readers, and adhesives then your finished product will not work right over its life cycle. Third, significant research into the right RFID needs to be done. Not all tags will work in every situation such as through metal, liquids, etc. You need to test out various tags, find the right ones, and then select the proper hardware to support them. Fourth, you need to get the right partners. Finding the best fit of partners to work with depends on a number of considerations, including level of expertise, cost, availability of personnel, [and] location (Zebra). Fifth, companies should start small and simple, and expand from there. The best way to start is by RFID pilot programs with limited amount of products. This will minimize the impact it has on your operations, which is very important in the event there is a problem with the system. Sixth, you want to make sure to test thoroughly. Due to the differences in tags and readers, and their applications, you want to ensure that you are getting reliable read rates and nothing is interfering with them. Seventh, if you can, plan RFID from the ground up. This means to take a new distribution center being built and implement the RFID there, if possible, this way it informs the design and construction of your new facility. Eighth, utilize the data. A company should try to translate the RFID data flow to upstream business applications instead of letting the information just sit in a database. Ninth, you should 12
13 look beyond compliance for ROI. Such was the case from the three companies studied that, leveraging their compliance learnings is only the first step to RFID ROI, and extending the technology internally in an organization requires business-process and software re-engineering (Zebra). Finally, the tenth lesson would be to recognize that RFID is still a moving target, and to plan for change. It is important to realize that the vendor relationships you establish today will become more critical as your implementation matures (Zebra). The selection of good partners that are knowledgeable will help if problems arise in the future. Companies should follow successful implementations and develop their plans around these successes. Some other best practices are being identified in the retail business as critical success factors. First, the implementation should be seen as a way to integrate a range of business processes in the long term. You should not think of the implementation as automatic technology to replace bar codes. Secondly, get everyone involved from the start. All of your business partners, from suppliers to vendors and even your customers, need to be involved from start. Another successful recommendation is to have Radio frequency site surveys conducted in the initial stages of any RFID implementation to study the impact of potential interference from wireless networks, short-range radios, and cordless phone (Retailspeak Magazine). These possible collisions could have a negative impact on the performance of your systems. Finally, calculate the benefits, whether the Return on Investments (ROIs) will offset all the costs of such an implementation. You should evaluate the potential long-term ROI for the solution at the start. The initial expenses of the implementation should be considered as part of the research and 13
14 development budget or innovation cost, rather than as IT spending (Retailspeak Magazine). Standards Standards are very important, because without them it would make it very difficult to communicate or operate in the multiple business environments. I will discuss some of the various standards that are becoming available with the RFID technology spread. First, Global Tag (GTAG) was a standardization initiative of the Uniform Code Council (UCC) and the European Article Numbering Association (EAN) for asset tracking and logistics based on RFID. Although, this initiative was superseded by the Electronic Product Code (EPC). Next, the International Standards Organization (ISO) has developed standards for tracking goods in the supply chain using different frequency ranges. First ISO identifies generic parameters for air interfaces for globally accepted frequencies. The low frequency standard is ISO at 135 KHz. Next, you have the high-frequency tags that are under the ISO standard. The ultra-high-frequencies cover 2.45 GHz (ISO ), 5.8 GHz (ISO ), and 860 MHz to 930 MHz (ISO ). Some of the other ISO standards are ISO (defines how data is structured on tag), ISO (defines the air interface protocol), ISO (protocol for tags in payment systems and contactless smart cards), ISO (vicinity cards), ISO (testing conformance of RFID tags and readers to standard), and ISO (testing performance of RFID tags and readers) (RFID Journal, LLC.). 14
15 EPCglobal, in an attempt to reduce current varieties of standards, released a standard for the next generation of RFID and the electronic product code known as Gen 2. It was amended to the International Standards Organization (ISO) standard as ISO C. It was developed to make several improvements over the various standards in use; the global standard developed uses frequency and power which complies with the major regional regulatory environments. Some of the other improvements include tag security and a kill mechanism to automatically erase all data from the tag as it passes through a reader. President of EPCglobal commented: The European Commission clearly recognizes the value that global standards will bring to the economy and society in general. EPCglobal standards enable accurate information and visibility about products in the supply chain, and as such their deployment can play a critical role (EPCglobal). Finally, the European Telecommunications Standards Institute (ETSI) released standard EN (parts 1 and 2) applies to RFID interrogators, with either integral or external antennas, used in conjunction with their RFID transponders. This standard is considered for short-range devices within the UHF range 865 MHz to 868 MHz. As this technology is applied to many different applications there needs to be standardization throughout the various industries. Many different RFID vendors offer proprietary systems which results in various applications and industries having standardized on different vendors competing frequencies and protocols. The lack of open systems interchangeability has severely crippled RFID industry growth as a whole, and the resultant technology price reductions that come with broad-based inter-industry use (AIM, Inc.). 15
16 Discussion What are the drawbacks? Although, there are many advantages of RFID technology, there are also potential issues that need consideration when choosing the type of RFID and method for application to your products and packaging. This technology promises great improvements in the supply chain visibility but the following are some of the issues that require close scrutiny when investigating this technology. Currently, the tag cost (chip and antenna) is high. The goal is to get the cost per tag down to 5 cents or less by improvements in manufacturing, and consumption in the billions of tags per year. This will be dependent on the type of chip required, size of the antenna, and how it is packaged to meet a specific application (Paxar). Next, tag size is dependent on the read range desired. In general, the size of the antenna will determine the read distance performance of the tag. Understanding the size of the antenna needed for the application is more important than the size of the chip alone. RFID antenna design is becoming very specialized to deal with specific applications such as the presence of liquid or metal. The infrastructure cost is very important to determine for this new technology. Changes to the software systems requirements and physical environment that RFID run in are critical. For example, RFID chips can not be read through metal objects, and other forms of electromagnetic interference may also impede performance of the technology. This would be an expensive capital expense to implement this new technology (Paxar). Also, the read distances for the RFID are very much dependent on the frequency chosen for the application. Tag orientation affects the read range because if the tag is 16
17 rotated from being perpendicular to the path of the reader the read range diminishes. Hand held readers are not capable of using as much power as stationary readers and as a result provide shorter read distances. Next, government regulation plays a big part in this new technology. Different countries have already assigned certain parts of the frequency spectrum for other uses and as a result, there is virtually no part of the spectrum that is available everywhere in the world for use by RFID. For example, Europe operates at 915MHz and the U.S. operates at 869MHz. This is an important consideration when operating in a global environment (Paxar). Finally, there is privacy and environmental issues that need to be taken into account. Consumer groups have expressed concern over the potential privacy invasion that might result with widespread RFID item marking. The use of tags and databases raises important security considerations related to the confidentiality, integrity, and availability of the data on the tags, in the databases, and in how this information is being protected. The major concerns about the environmental issues are the reuse and recycling of the tags. Tags contain silicon, adhesives, and nickel, and the antennae are typically made from copper, aluminum, or, if printed, silver. This leads to potential contaminants for recyclers and manufacturers using recycled materials. Conclusion Radio Frequency Identification technology is proving to be a very valuable and growing asset to companies. Along with many new technologies come potential issues that need to be addressed as well as the benefits. Businesses, to stay competitive, need to 17
18 leverage these new technologies so that they create a competitive advantage whether in their processes or operations. RFID offers many new advantages in transportation, supply chain management, identification, patient management in hospitals, and other areas. The growing debate is whether or not you can justify the costs to implement such new technologies so that they deliver added value to your company. There is a level of unknown that many companies will have to face. It becomes difficult with the lack of standards increasing the risks of such a technology implementation. The future is surely to change the way businesses operate with the possibilities that this technology offers. Once best practices are developed and proven then the transition should flow smoother with potential issues during implementation. We can see by Wal- Mart failure to meet their goal of installing RFID in at least 12 of its 137 distribution centers by last year that RFID implementation isn t going to be easy. Although, the future does look bright with such companies as Tesco having a 99% implementation success (ComputerWeekly.com). 18
19 References AIM, Inc. Radio Frequency Identification RFID: A basic primer. 14 Sept ComputerWeekly.com. Tesco RFID Implementation a 99% Success. 25 Apr EPCglobal. Commission Communication on RFID sets the stage for the EU to realize benefits of applications based on EPCglobal standards. 26 Apr ission_communication_on_rfid_ pdf. Federal Highway Administration. Travel Time Messaging on Dynamic Message Signs Chicago, IL. 24 Apr Heinrich, Claus. RFID and Beyond. Indianapolis: Wiley Pub., Holtzman, David H. Privacy Lost: How Technology Is Endangering Your Privacy. San Francisco: Jossey-Bass, Illinois Tollway. Benefits of Open Roads for a Faster Future. 24 Sep dad=portal&_schema=portal. Paxar Americas, Inc. RFID Basics Updated: Including Gen Mar Retailspeak Magazine. RFID technology: A roadmap to success. 23 Apr RFID Journal, LLC. Electronic article surveillance. 15 Mar RFID Journal, LLC. A Summary of RFID Standards. 26 Apr 07 RFID Technology: What the Future Holds for Commerce, Security, and the Consumer: Hearings on H. 108 Before the Subcomm. on Commerce, Trade, and Consumer Protection of the House Comm. on Energy and Commerce, 108 Cong., 2 nd Sess. (2004) [hereinafter RFID Hearings] at 19
20 Heim, Kristi. Man grips future with microchip implants in hands. Seattle Times. 1 Mar html. Smart Card Alliance. RFID Tags and Contactless Smart Card Technology: Comparing and Contrasting Applications and Capabilities. 15 Mar Sullivan, Laurie. RFID Chips to Travel in U.S. Passports. TechWeb News. 15 Apr Trek, Denis. Managing Information Systems Security and Privacy. New York: Springer, Tutorial-Reports.com. RFID Competing Technologies. 15 Mar d02128c7c558f89b42964de10. Wikipedia. Radio Frequency Identification. 23 Apr Zebra Technologies International, LLC. Zebra Offers Top 10 Best Practices to Next Wave of RFID Mandated Wal-Mart Suppliers. 20 Apr File.tmp/WalMart_RFIDnext300_4%2019FINAL.pdf&dvar1=Misc&dvar2=Zebr a%20offers%20top%2010%20best%20practices%20to%20next%20wave%20 of%20rfid%20mandated%20wal-mart%20suppliers&dvar3=null. 20
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