How RFID technology is developed, adopted, and implemented?
Development
The development of RFID technologies has its origins in the 19th-century discoveries of electronic inductance and electromagnetism. Detection systems such as RADAR (Radio Detection and Ranging) were precursors to the RFID technology. The paper about the technology behind RFID was presented in 1948. Radio Frequency was used in the IFF (Identify Friend or Foe) systems deployed by the British in World War II.
Electronic Article Surveillance (EAS) to detect removal of articles without purchasing is in use since the 1960s. The UPC (Universal Product Code, which is a barcode) is the first passive auto-identification system. RFID is an improvement on that.
Adoption
RFID applications can be found in both B2B and B2C e-commerce industries.
In the B2B industry, the EPC code can be imprinted with information about the product. As it passes through the supply chain, the information is read and any relevant information is added to it such as the date it was received at a particular warehouse and when it left the warehouse. As soon as the product pallet leaves the vendor facility, the buyer could get this information through EDI and as soon as the buyer receives the pallet, the vendor could receive an automatic confirmation of receipt. This will enable accuracy in the inventory. The EPC code can be linked to up-to-date information about the product from the company’s website so that, for example, a pharmacy can find out the latest warnings about a particular batch of drugs as soon as it is scanned.
In the B2C industry, as soon as a customer purchases a product and leaves the premises, the inventory is updated. The customer can use a mobile application to read the UPC and get all the relevant information about the product. A pharmacy can track if the customer is being delivered a medicine with the appropriate documentation about the usage of the medicine by yoking the documentation and the medicines with connected RFID technologies. By tagging customer loyalty cards, the companies can understand when the customer entered the premises, how much time the customer spent on the premises, and pinpoint the location as to where the customer spent the time, creating new marketing opportunities.
Implementation
RFID (Radio Frequency Identification) technology is a type of wireless automatic identification and data capture (AIDC) technology that uses radio signals to identify and track a variety of objects without the need for contact or line of sight contact. Typical RFID consists of transponders or tags. These are attached to the object that has to be tracked. These are interrogated by transceivers or readers. The tags respond with identifying information. Transponders carry data on microchips. Most RFID tags also carry the UPC information to hedge against failures of RFID, while the tags store information electronically. RFID tags can be active or passive. Active tags are battery powered, have a range up to 300 feet, can store 512 KB of information, and are costly, so their use is limited to high-value goods. They operate by transmitting signals to the reader. The passive tags, on the other hand, do not have a battery, have low storage (up to one KB), shorter range (4 inches to 15 feet), and are usually Read Only or WORM (Write Once and Read Many) tags.
While there are three components to the RFID technology, for businesses (e-commerce or logistics companies) to take advantage of this technology, there are other components that are required. They are:
Middleware is used to consolidate the RFID data received from multiple readers and transmit the processed data to backend enterprise applications.
Backend Enterprise Service receives the RFID data from the middleware and integrates the data with existing applications such as ERP, SCM or CRM systems.
How is RFID technology used, supported, and evolved within organizations and alliances?
Usage
As competition intensifies due to globalization, supply chain management (SCM) and logistics have become the differentiators. There are eight primary processes that can benefit from RFID adoption. They are managing the customer relations (CRM), Customer Service (CSM), Demand (DM), Order fulfillment (OFM), Manufacturing Flow (MFM), Supplier Relationship (SRM), Returns and Product Development and Commercialization.
RFID can be used to collect and disseminate information at various points in the supply chain, but two factors have to be considered while deploying the RFID solutions; effectiveness (responsiveness and flexibility) and efficiency (minimization of cost). RFID will extend the company’s ability to capture accurate information about the location as well as the status of the physical objects across the supply chain borders. RFID provides automatic authentication, identification and automatic data acquisition (ADA).
Support
RFID gates can be used to track pallets and incoming pallets can be matched to the purchase orders and any discrepancies can be automatically informed to the vendor through EDI so that labor usage can be reduced as these are labor intensive processes.
RFID can be used to support Just in Time (JIT) assembly lines. Due to the tracking capabilities of the RFID, there is a high supply chain visibility and this will result in an increase in visibility and decrease in variability. Each purchase can be tracked immediately, and based on that the demand can be accurately forecasted. This results in decreased inventory carrying costs. As an example, P&G saves one billion USD in working capital and 20 million USD in inventory carrying costs annually due to RFID implementation.
Evolution
Applications that deal with authentication assume the tag holder to be a person with a smart card for making payments. The other applications are for ADA where pallets and products are affixed with tags so that they can be tracked and the data so captured can be used for deriving enterprise resource planning systems. The idea is that RFID tags can be used in a multitude of products so as to enable automatic coordination and communication with other intelligent devices so that human intervention can be minimized or eliminated.
It is a mistake to use RFID as a replacement for barcodes only as it would not allow the organizations to utilize the RFID technology to the fullest extent, though there would be few changes to the business processes that need to be done. The RFID tags can enable borderless supply chain, and examples could include cases where the tags contain information about the contents so that customs clearing can be seamless. It can be used to enhance security as the products location and as well as their movement can be tracked.
Discuss the barriers faced in the adoption of ebanking in the viewpoint of customers and the banks.
Barriers faced by customers in adopting e-banking
The customers feel that security is a major problem with e-banking. Due to the proliferation of crackers and hackers, e-banking is not secure.
The customers faced problems due to link failure, system failure or unavailability resulting in the transaction not getting completed.
They feel that the e-banking is the riskiest service that a bank is offering
Customers feel that there is an increased rate of fraud which has nullified the advantage of e-banking
Barriers faced by banks in adopting e-banking
The banks believe that e-banking enables an increase in the productivity of the employees. However, there is a problem with profitability as the cost of enabling e-banking is high unless there are economies of scale. So, unless the scale of use justifies it, the use of e-banking is not justified.
Customer satisfaction is an important factor for justifying enabling e-banking. However, if security is not provided, it can lead to erosion of customer trust. This can impact the customer commitment or loyalty.
Ease of use is another factor that affects enabling of e-banking services. The level of awareness of navigation, the technologies involved, the level of internet penetration and usage are all factors that impact the ease of use of the e-banking solution for the customers. If they are not there, it is difficult for the bank to achieve the scales required for the economy.
Propose recommendations to eliminating the barriers in adapting to e-banking.
Recommendations
The following recommendations are made for eliminating the barriers for e-banking adoption:
The IT and Telecommunication infrastructure have to be improved. This can be done by the government or large private players such as IT companies and Telecom companies. This includes advanced communication facilities, access to satellite systems, reliable electricity network, hardware and software features, and quick access. This addresses the following issues;
The apprehension of customers that they may not be able to complete their transactions due to a network fault. If the infrastructure is properly developed, this problem can be mitigated or completely eliminated.
The problem of internet penetration. With the right infrastructure, the internet penetration problem is automatically addressed.
The profitability due to the high scale of economies to be achieved. If the infrastructure is already in place, then the initial expenditure by the companies to enable e-banking will be reduced and the profitability will be achieved even at lower scales. This will enable the banks to slowly scale rather than go for a big bang approach.
The Legal infrastructure has to be improved. This has to be done by the government. They have to pass strict laws that address the cases of bank fraud through the internet. This includes criminal law, laws addressing legal issues in the e-commerce business, identifying the legal relationship between contracts, international law in international disputes, privacy and protection of data and more. The international community already has some laws in this regard and the government can examine them and adopt them based on the need for these laws are very complicated due to jurisdictional issues. This will mitigate or eliminate the apprehension that the customers have about getting their money back in case of a fraud while e-banking.
The security infrastructure has to be improved by the bank. This will create confidence in the customers that the transactions are safe and this will improve e-banking usage.
Cultural and educational development of e-banking. The public has to be educated about the benefits of e-banking, how to actually go through the e-banking process which includes navigation and other basics, and improve the cultural thinking related to e-banking. This will help the proliferation of e-banking.
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