Abhishek Sujay 0505 RFID Advantage in Logistics MGMT

RFID ADVANTAGE IN LOGISTICS MANAGEMENT
A STUDY ON RFID ADVANTAGE IN LOGISTICS MANAGEMENT FOR RETAIL INDUSTRY

A DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF MBA DEGREE OF BANGALORE UNIVERSITY.
Submitted By
Mr. Abhishek Sujay .N. Registration Number 05XQCM6005
Under the guidance of
Prof. Sumithra Sreenath

M P Birla Institute of Management Bangalore
M.P.BIRLA INSTITUTE OF MANAGEMENT ASSOCIATE BHARTIYA VIDYA BHAVAN. BANGALORE-560001

2005-2007
M P BIRLA INSTITUTE OF MANAGEMENT
DECLARATION
I hereby declare that this dissertation entitled A STUDY ON RFID ADVANTAGE IN LOGISTICS MANAGEMENT FOR RETAIL INDUSTRY is the result of my own research work carried out under the guidance and supervision of Prof.Sumithra Sreenath, M P Birla Institute of Management Bangalore. I also declare that this dissertation has not been submitted earlier to any Institute/organization for the award of any degree or diploma.
Place: Bangalore
Date: Sujay.N.
Abhishek
PRINCIPALS CERTIFICATE
I hereby certify that this dissertation entitled A STUDY ON RFID ADVANTAGE IN LOGISTICS MANAGEMENT FOR RETAIL INDUSTRY is the result of research work carried out by Mr. Abhishek sujay .N. under the guidance of Prof. Sumithra Sreenath, M P Birla Institute of Management, Bangalore.
Place: Bangalore Date: Dr N S Malavalli Principal
GUIDES CERTIFICATE
I hereby certify that this dissertation entitled A STUDY ON RFID ADVANTAGE IN LOGISTICS MANAGEMENT FOR RETAIL INDUSTRY is an offshoot of the research work carried out by Mr.Abhishek Sujay.N. under my guidance and supervision.
Place: Bangalore Date: Prof. Sumithra Sreenath
ACKNOWLEDGEMENT
I would like to express my sincere gratitude to my research guide Prof. Sumithra Sreenath, M. P. Birla Institute of Management, Bangalore for her constant encouragement and guidance in the course of the research investigation.
Further, I would also like to thank all the faculty members of MPBIM who have helped me in completing my project. I have gained a lot of knowledge throughout the course of carrying out this project.
I would like to sincerely thank all my friends and colleagues who have helped me in completing this project by providing me with the academic support.
Special thanks to the founders of GOOGLE, I really wonder how people in early days used to do research projects. Finally, thankful to GOD for obvious reasons.
ABHISHEK SUJAY N
INDEX
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SL.NO
1 2 3
CONTENTS
Research Extract Chapter 1: Introduction Chapter 2: An overview of implementation of RFID in retail stores for logistics management
PAGE NO
1 3 6
Chapter 3: Profile of the Industry
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5 6 7
Chapter 4: Profile of the respondents Chapter 5: Literature survey Chapter 6: Problem statement & Research objectives
35 36 44
8 9
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Chapter 7: Research design Chapter 8: Research limitations Chapter 9: Data analysis and inferences Chapter 10: Summary of major findings of research
45 47 48 55
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Chapter 11: Recommendations
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Chapter 12: Conclusion
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Scope for further study
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Bibliography
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RESEARCH EXTRACT
The future is far too important for the human species to be left to fortune tellers using new versions of old crystal balls. It is time for the oracle to move out and science to move in."
Radio Frequency Identification (RFID) is set to become the bedrock of most supply chains over the next twenty years: however, at present it is perceived to be an immature solution with significant barriers to overcome before becoming a mainstream technology. Indias organized retail is only 3 percent while 97 percent is unorganized. India is the second largest growing economy in retail, after China. Around 350 plus shopping malls are coming up in 2007 alone. As the retail segment in India keeps growing exponentially, RFID and other retail security products will play a more prominent role to control and combat retail shrinkage. Not being able to find tools and equipment when they are needed costs more than inconvenience. Time spent searching for assets eats into productivity, and hence profitability. Workers lose the equivalent of one full 40hour workweek per year if they spend only 10 minutes a day searching for and gathering needed items. The inability to track equipment location, usage, service, and maintenance causes companies to lose money on lease and service agreements. Holding too many assets ties up capital, which every business seeks to avoid. To improve competitiveness and profitability, enterprises should manage assets with the same care and innovation they have employed to drive excess inventory and costs out of their operations. A good asset management program will improve return-on-assets (ROA) and other metrics by helping to lower and control the enterprise cost structure. Automatic identification and data collection (AIDC) technologies and techniques that have proven their value in the supply chain are readily adaptable to help optimize asset levels. Bar code and smart label technology can make it simple and convenient to gather and manage asset information in a timely and efficient manner. These technologies can record asset
RFID ADVANTAGE IN LOGISTICS MANAGEMENT movements automatically, and provide the data in real time to asset management software applications. Computerized systems provide up-todate, accurate data that enables an organization to manage its assets with information instead of physical inventory. The result is a lower overall asset base, improved asset utilization, increased productivity and more efficient purchasing and maintenance, which all contribute to bottom line improvement. These outcomes provide a sustainable improvement in profitability without burdening employees with excessive controls or reporting responsibilities. Using RFID and logistics management strategies will serve to improve capital utilization lower the total operational costs as well as improve the availability of assets. The use of these asset management techniques has improved customer retention significantly. This technique will help improve visibility of assets in transit, availability management of much needed assets, transportation management etc. these techniques have to be reviewed periodically to ascertain if they have effected a significant change as also to take necessary action where required. This Research is an attempt to study the advantages and intricacies of implementing RFID in logistics management for retail industry. The study aims to find the strategic advantages that the companies will gain due the implementation of RFID. The study also shows the various hurdles for implementation of RFID. The study also helps organizations identify the potential users for their RFID implementation and how they could further leverage the implementation to achieve higher returns on investments and ease of operation which ultimately lead to higher efficiency and better profits.
Chapter 1: Introduction
Mandated use of Radio Frequency for automatic Identification (RFID) of goods at the pallet, case and item level continues to churn the Consumer Product Goods (CPG), Logistics and Retail industry. The statement Internet of things is slowly becoming true; with concerted efforts from standard setting bodies such as EPC Global, ISO, FMCG consumer goods companies like Gillette, P&G and major retailers like Wal-Mart, TESCO, and the US DoD, to replace barcodes with RFID tags.
Barcodes are factual with the existing automatic identification systems. At the same time, RFID promises a smooth and accurate capture of data and organizations are looking forward to relieve the existing bottlenecks with systems which enable end-to-end tracking and monitoring of goods.
The early acceptance of RFID realizes the need for a good integration fabric that can seamlessly allow data to flow from the devices (tags) through the readers to the RFID middleware systems, and be utilized by the existing or new applications to trigger meaningful transactions. The vision is to combine the best of each into a smooth, tightly knit system, offering the enduser more information in less time.
The Integration landscape that will evolve needs to address issues such as device integration, data integration, presentation and management, ERP, Warehouse Management Systems integration, work flow integration (with partner systems) and concerns for security and privacy. The IT industry comes into the picture while making data available through the artifacts on integration in turn providing data for better decisions and driving towards quantifiable benefits of the investments.
RFID ADVANTAGE IN LOGISTICS MANAGEMENT A basic RFID system has three components:
FIG 1: RFID TAG The tag, an RF transponder programmed with information unique to the object being tracked The reader, a transceiver that decodes the information stored on the tag An antenna on either the tag or the reader
Tags that contain internal batteries are active tags. Tags activated by a power source in the reader are passive. Because RFID technology uses radio waves rather than light, readers need not be close enough to see tags. Nor is human intervention necessary, because tags are read automatically. The more powerful the tag, the farther away the reader can be placed. However, a more powerful tag is also a more expensive one. Thus, RFID tags are usually attached to cases of pallets of lower-value goods, such as razor blades or Army boots, and individually to high-value objects, such as cars and military equipment. Tags can be tiny enough to identify the family cat or large enough to label railroad cars. The larger the tag, the more information it can storesuch as when an object was moved, the temperatures to which it was subjected, and how hard it was bumped.
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How RFID works
FIG 2 : RFID WORK CYCLE
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Chapter 2: An overview of implementation of RFID in retail stores for logistics management
FIG 3: RFID IMPLEMENTATION HURDLES MATRIX
The above matrix plots the different implantation hurdles depending on the various factors such as the degree of importance on x-axis starting from low to high , Then plotting the degree of difficulty for implementation on the y-axis starting from less of a concern to significant concern. This matrix clearly places the various hurdles accordingly and helps the implementation company to analyze and take further steps accordingly.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT INTEGRATION LAYERS The success of RFID will depend a lot on the rollout plan of the organization. The ideal way to do the same would be to divide the processes and technologies into various layers to make the impact of adoption minimal. We further take a look at these layers that make the integration complete.
DEVICE INTEGRATION As organizations proceed to adapt themselves to the RFID technology, the RF-enabled readers have to integrate with the existing auto-id technologies for capturing the data. This drives the need for integration at the device level that comprises devices-device integration, device computer integration and data capturing technologies.
APPLICATION INTEGRATION Application Integration is a part of the evolution of application delivery that includes improved software componentization and the increasing acquisitions of packaged software. In its simplest form, application integration is the encapsulation of an existing application by software component that acts as a functional interface to that application. The creation of an interface allows the other applications in the portfolio to interoperate with the wrapped application, increasing its value and long term usability. The existing applications, now, in RF-enabled environment need to communicate in the EPC compatible language. The data that is gathered at the middleware is converted to the application compatible format and sent across to the legacy / enterprise applications for further processing.
PROCESS INTEGRATION Process integration tools provide a level of abstraction by letting users define integration requirements through workflow and business process models. This capability shields business analysts from the complexity of underlying middleware. Using process modeling, business analysts focus on optimizing processes and easily change or implement new processes with minimal amount of coding. The models map the flow of business processes and business rules across applications and people. When business processes M P BIRLA INSTITUTE OF MANAGEMENT 13
RFID ADVANTAGE IN LOGISTICS MANAGEMENT change, the changes are made at the model level and even the on-going processes are updated. After the application level integration, the
organizations move onto process integration to combine and automate the processes, thus optimizing the data flow. The drivers for process integration in RF-enabled systems are: Existence of third-party process modeling tools Workflow modeling Process simulation Process-based task monitoring and management The need for runtime changes in processes.
BUSINESS INTEGRATION
The completely automated systems fall in place when the organizations interoperate on business transactions. This is possible by reducing the cost of data ownership and reusing the information between vendors. Physical Mark up Language (PML) plays a key role by enabling the business partners to access the information about the object that is being read in RFID. Business Integration depicts end-to-end business process flow across business units. It ensures the management and reliability of processes on the path. Organizations, with the help of business integration, are able to bridge the application environments across composite applications, creating a networked world.
PRESENTATION AND MANAGEMENT
While RFID automates the data capture and many of the business processes, the simultaneous requirement is to monitor and manage the data that flows from one process to another. This layer will help monitoring and managing the data and view the state of the system at each level. It also can help in generating various reports and analyze the information at various stages in the entire value chain. The Graphical User Interface, if provided, can also help
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT in managing the information and providing a manual means of manipulating the information, when required.
INTEGRATION CHALLENGES
The adoption of RFID, along with an ease of management invites a series of challenges for early adopters. The challenges start right from integrating the readers for identifying the data, to monitoring the data in the ERP and SCM systems, to later manage this data. The most likely areas where challenges can be foreseen are:
INCOMPLETE PACKAGES AND INFLEXIBLE SOLUTIONS
Organizations having partial packages - supporting functionality in chunks are likely to face a challenging stint with RFID. This is because of the fact that lot of amendments may be required in order to leverage the provisioning of RFID to the utmost.
NEED TO INTEGRATE LEGACY
While RFID is being integrated, organizations would want to re-use their existing systems. This will not only save cost and time, but also require less amount of familiarization time for in-house users.
NEED TO INCORPORATE NEW FUNCTIONS
Even while organizations are looking only at the identification aspect of RFID, there are many areas where new functionalities would be required to automate the existing systems. Vendors providing integration packages would be expected to develop their products/solutions in a way that integration in such scenarios can be achieved with minimal
customizations.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT DIVERSITY IN TECHNOLOGICAL STANDARDS
The ERPs and SCMs within organizations can be proprietary as well as vendor provided. However, in any case, with each ERP having different standards in the technology aspects, Integration challenges are likely to soar up in this arena.
INCOMPATIBILITY IN BUSINESS PROCESSES
The better you want, the tougher it is. Automation is to bring in series of changes in the existing processes that may or may not be compatible with each other. This puts up a challenge at the process integration level to provide an oblivious means for optimized automation.
COMPLEX TECHNOLOGY WITH HETEROGENEOUS PLATFORMS, N-TIER DISTRIBUTED COMPUTING AND THE WEB
Distributed computing environments and the advent of Internet brought in a concept of Interorganization business communication through loosely coupled systems. Extensible Markup language (XML) is accepted as a standard for such communications. The combination of Internet and XML gave birth to Web Services, which support multi-language and multiplatform systems. Integration aspects of RFID will cover a lot in this area with processes being automated and organizations reducing their cost of ownerships.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT ROADMAP TO INTEGRATION
FIG 4: RFID INTEGRATION ROADMAP
While RFID is being promoted as an applied science to provide real-time visibility of data pertaining to items, cases and pallets at all stages of the automatic identification, organizations are researching continuously to improvise their strategies for optimizing their efficiencies in terms of costs, timely deliveries, consumer satisfactions and above all managing the complicated business rules using this tool. Figure illustrates the roadmap for integrating RFID with existing processes. The permeation through these stages can give: integrity, accuracy, unified view of business information, infrastructure optimization, technological flexibility, and above all, integrated real time data visibility. With individual technologies rapidly becoming generic or obsolete, integration plays a vital role for a smooth running system. The requisite of an integrated platform envisages an approach to product development and opens the door to intelligent systems. Radio Frequency Identification promises an era of ubiquitous computing. The Internet of Things is being realized as the means of low cost of ownership and a substance for real time monitoring.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT RFID is moving forward with a thrust and, the need for Integration at various stages with RFID becomes a crucial aspect for a smooth operation of the system. What makes the integration aspect vital is the existence of diverse applications in functional and technical aspects. Vendors across the Information Technology spectrum are taking a plunge for providing solutions that are extensible and robust to meet the challenging demands of every vertical concentrating on RFID. And what is promised is a better management of data and information for organizations, in turn, boosting efficiency and optimization of the resources.
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Chapter 3: Profile of the Industry
FIG 5: RFID IMPLEMENTATION USERS India is being touted as the land of opportunity for logistics service providers all over the world. The demand for logistics services in India has been largely driven by the remarkable growth of the economy, projected to grow at 9-10 per cent in next few years. The Indian logistics market, valued at $14 billion a couple of years ago, is expected to grow at a CAGR (compounded annual growth rate) of 7-8 per cent. It is felt that the growth will continue, and might even scale newer heights, as the economy is experiencing a retail boom with Western companies such as Metro, Wal-Mart planning to start operation in this country, and large local retailers such as Shoppers Stop, Pantaloon, RPG and Big Bazaar planning to expand their operations in smaller cities. But, then, logistics management in India too is complex, with millions and millions retailers catering to the requirements of more than one billion people and the infrastructure yet to develop to cater properly to a growing economy. The poor condition of roads translates directly to higher vehicle turnover, which in turn pushes up the operating costs and reduces efficiency. The reduced efficiency is passed on the logistics service providers, with transportation costs accounting for nearly 40 per cent of the total logistics
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT cost. The National Highways are being upgraded but these highways account for a meager two per cent of the total road network in the country. The Government of course is trying to execute a large number of road and other infrastructure projects through PPP (public private partnerships) initiatives to ease the pressure on the government coffers. However, the experiences reveal that the PPP scheme, as it exists today, is not a foolproof arrangement, with the several States complaining about its inadequacies. There are other problems such as complex tax laws and insufficient technological aids. The fragmented market increases costs due to huge paperwork and the individual truck owners, dominating the market, are unable to contract directly with customers, with the result freight consolidators and brokers take a commission to generate business for the truck owners. Only about a few thousand vehicles out of a total of several millions have tracking system. The use of IT, thus, is limited. Neglected modes In India, the logistics costs are still higher than those in developed countries an estimated 13-14 per cent of GDP compared to 8 per cent in the US. The inventory costs are approximately 24 per cent of the logistics costs and the order processing and administrative expenses account for another 10 per cent or so. Warehouse management is often done manually, increasing inefficiencies and adding to the cost. A characteristic feature of the local express and logistics service providing companies is that many players offer homogeneous services, with the result there is near- commoditization of services where the demand is price sensitive. The top-end of the market is controlled by a handful of multinationals and large domestic players. Despite these challenges, the country's logistics industry is set to grow. Industries such as chemicals and pharmaceuticals, metals, FMCG, cement, textiles and capping it all the retail segment have been identified as the top
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT contributors to the projected growth of the economy and therefore to logistics revenues. The new generation corporates are looking to outsource nontraditional logistics requirements such as reverse logistics, inventory management, order processing, distribution, and labeling and packaging. Radio Frequency Identification 61 companies intend to implement RFID. Ironically, the popularity of the technology is not in the manufacturing or the FMCG segment as one would expect. It is the services sector that's bitten. 7 percent of those who intend to invest in RFID this fiscal already have fully operational implementations. RFID as a technology has existed for over 30 years. The technology can address tracking requirements of companies, and the mandate to put RFID tags on products that get exported to giants such as Wal-Mart is spurring interest in this technology. An RFID standard is conspicuous by its absence and completed projects are proprietary deployments in closed surroundings to track objects in storage. An important factor that will contribute to exporters taking to RFID is that RFID tags can be used to communicate information about a product to anyone in the world over the Net. According to Venture Development Corp. (VDC), the overall worldwide market potential of RFID technology (including sales of tags, readers, software and services) is expected to grow $4.7 billions in 2007 from $1.5 billions in 2004, a compound annual growth rate of 45%. Market growth is broad based across all industries with particular industries such as consumer, retail and life sciences growing significantly faster than others
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FIG 6: SECTOR-WISE ESTIMATES FOR RFID RFID system implementations are expected to increase significantly in the future due to several key factors that are driving growth and adoption: Development of standards: The new standards offer several performance benefits while ensuring global readability throughout the supply chain. EPC global recently suggested that HF become the global standard in item-level RFID applications, which should help fuel adoption in the numerous markets such as tracking, consumer goods and electronics. Companies such as Pfizer and the leading packager, West Pharmaceutical Services, in the life sciences industry have already begun implementing programs consistent with the proposed standards. Reduction in product prices: Given the improvements in chip design and manufacturing processes, certain companies can now offer RFID solutions with compelling Return on Investment (ROI) profiles. Companies have an active program to continue lowering production costs as it ramps production, leverages purchasing of components and optimizes manufacturing processes.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT Maturity of RFID infrastructure products: RFID companies can readily provide companies with a customized, turnkey and fully integrated solution. A company designed and implemented and is now integrating a complete solution for a global fashion retail company that took 4 months and resulted in 99.95% read rates in a highly demanding endto-end supply chain and retail environment. Strong endorsements from industry leaders and government
Many leading IT consulting firms such as Oracle, IBM, Accenture, Cap Gemini and Siemens, along with companies such as Wal-Mart, Boeing-Airbus and DHL have significant RFID initiatives underway. For example, Wal-Mart and Metro have mandated that suppliers be RFID compliant by the end of 2005. In government, the US Department of Defense (DOD) is requiring RFID compliance by suppliers by the end of 2005 and the US Food and Drug Administration (FDA) is recommending RFID usage by all pharmaceutical companies on a unit level basis by 2007. RFID markets cover two broadly different areas of application:
Pallet & Case Tracking:
Pallet and case tracking involves tagging bulk packaged items (i.e. a box of goods, not the individual units of sale), usually at the manufacturing source. The implementation of pallet and case RFID tracking is anticipated to bring further efficiencies in the supply chain, from packaging, through shipping and distribution, and into the back-end of the retail store or final distribution point. Benefits are expected to arise from improved control, reduced touch and reduced diversion. Pallet and case tracking is largely being driven by the mandate of several large retailers such as Wal-Mart in the US and Tesco in Europe, as well as by the US DoD. As noted above, UHF is the preferred solution as it allows for longer read ranges.
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Item-level tracking:
Individual items are tagged at the manufacturing place, in a warehouse, or by the operator of a closed loop system such as a library. Tags are read in bulk, often through a container (box, bag, etc.), along a process line or in the supply chain, and without a line of sight. Performance demand is very high (above 99.95% read rate in bulk), which presents significant technological barriers for many competitors. Implementation is being driven by both value
considerations as well as by mandates from government agencies and customers. Benefits are shared between the retailer, the wholesaler, the manufacturer, and other participants in the supply chain
How Will RFID Affect the Apparel and Retail Supply Chain Industry?
RFID is expected to provide huge advantages to manufacturers by offering the tools to better plan production and respond more quickly to market demand. It will facilitate automation of inventory counts and speed shipping and receiving at the distribution level. For retailers, it will help to reduce stockouts, enable product tracking and potentially reduce theft and streamline the POS function. RFID will also open other merchandising opportunities and help with the overall consumer buying experience. Due to the current cost of the technology (both tags and infrastructure), the initial phase of adoption for most retailers is at carton and pallet marking applications. The current technology being adopted for carton and pallet labeling is passive UHF tags (850 MHz 950 MHz). As the cost of tags and readers comes down, a wider adoption at the item marking level is developing.
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Open Loop versus Closed Loop Applications
Among the many applications for RFID technology, the solutions can be either closed loop or open loop. In a closed loop application, the user has complete control of the items to be tracked throughout the application. There is no need to share data outside the user organization and users outside the organization do not need to be able to read the RFID tags. In this case the chosen protocol does not need to necessarily comply with an open standard. For many RFID applications, the tagged items must be readable by many companies such as manufacturers, logistics hubs, and retailers. In this case, it is essential to have open loop standards for the tag protocol as well as the data being stored to the tag.
The Electronic Product Code (EPC)
FIG 7: DESCRIPTION OF EPC The EPC is a 96-bit number made up of a header and 3 sets of data. There are several iterations of the EPC, depending upon the specific application. An example of a typical EPC code is shown below. The header identifies the EPC version number which identifies the type of EPC data to follow (for example SSCC versus GTIN). The second part of the number identifies the EPC manager typically this would be the manufacturer of the item the EPC is attached to. The third part is called object class and refers to the exact type of product most often the stock-keeping unit (SKU). The fourth series of numbers is the serial number that is unique to the item. (The second and third sets of data are similar in function to the numbers in UPC barcodes.)
A 96-bit EPC will allow sufficient capacity for 268 million companies. Each manufacturer will have the ability to create up to 16 million object classes with M P BIRLA INSTITUTE OF MANAGEMENT 25
RFID ADVANTAGE IN LOGISTICS MANAGEMENT 68 billion serial numbers in each class. This should provide sufficient capacity to cover all products manufactured in the world for many years to come.
ELECTRONIC PRODUCT CODE TYPE 1

Potential issues that need consideration when choosing the type of RFID and method for application:
Although RFID technology promises great improvements in supply chain visibility, it is important to embrace the technology with a bit of caution. The following are some of the issues that require close scrutiny when investigating RFID:
Tag Cost This should not to be confused with chip cost. Although the goal is to bring the cost of the tag (chip and antenna) down to 5 cents, this goal is in the future since it both assumes manufacturing breakthroughs and is predicated on consumption in the billions of tags per year. Today, the cost is closer to "less than 20 cents" for a read/write solution in high (millions) volume. Ultimate tag cost will also be very much dependent on the type of chip required (read only versus read/write), size of the antenna needed and how it is packaged to meet a specific application.
Tag Size Tag size is dependent on the read range desired. Although the chips are very tiny, they will not operate without being mounted to an antenna. In general, the size of the antenna will determine the read distance performance of the tag so 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 so that there are antennas being designed to deal with specific applications such as the presence of liquid or metal. An end user should be sure to work with a reputable supplier who will help them determine the best antenna design for the application.
Infrastructure Cost Much focus appears to be placed on the tag cost since it is a recurring expenditure. Reader cost and infrastructure costs for implementing RFID must also be looked at very closely as well. Both the
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT software systems requirements and physical environment, in which RFID is intended to be used, are critical to the ultimate performance of a system and may require changes to accommodate using it effectively. As an example, RFID chips cannot be read through metal objects. Other forms of electromagnetic interference may also impede performance of the technology and require changes to the physical environment where RFID will be used. The number and types of readers will also be a major expenditure depending on the application.
Read Distances Read distances for RFID are very much dependent on the frequency chosen for the application. Tag orientation also affects the read range as the range diminishes as the tag is rotated from being perpendicular to the path to the reader. Reading reliability is quite good when labels are alone in a reader field like cases on a conveyor line, but less certain when the labels are randomly oriented as with labeled cases on a skid. The antenna size (both on the tag and the readers) will also be a determining factor. Hand held readers are not capable of using as much power as stationary readers and as a result provide shorter read distances.
Government Regulation Governments around the world regulate the use of the frequency spectrum. Different countries have already assigned certain parts of the 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. This means that a RFID tag may not work in all countries. As an example if you choose the Ultra High Frequency (UHF) frequency that operates at 915MHz in the U.S. and you ship your product to Europe, they may not be able to read it as well since Europe operates in the UHF spectrum at 869 MHz and with lower power. This is an important consideration when operating in a global environment.
Anti-Collision This is an important feature of RFID chips/readers since it will allow multiple tags to be read while grouped in one reader field. It is not available on all RFID tags but is an important feature if you are planning to
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT use RFID for inventory counts, shipping and receiving where multiple tags need to be read at the same time.
Privacy Issues Consumer groups have expressed concern over the potential (real or imagined) privacy invasion that might result with widespread RFID item marking. These groups are pushing for legislation that will require manufacturers to advise consumers that the products contain RFID devices and must provide a means so that the devices can be disabled at point of purchase. These issues are most prevalent at the item marking level and will have little impact on the implementation of carton and pallet labeling.
RETAIL SECTOR IN INDIA

On a weekday, the DLF Mega Mall -- located in the IT and ITES hub of Gurgaon on the outskirts of Delhi -- bears a deserted look. Of the few operating shops in this large mall, most have nary a customer. The same goes for several other retail outlets and many of the other malls in the vicinity. True, a retail chain like Future Group's Big Bazaar may be clocking heady sales (growing at 100% year-on-year), but the dozen-odd shops operating in its proximity wear a deserted look, giving a somewhat hollow ring to the muchtalked-about retail boom in the country. In what seems like a quirk of circumstance, malls have sprung up all over urban India in anticipation of a consumption boom that may itself prove to be eventually truant. Move to Mulund (West), a suburban locality of India's financial nerve, Mumbai. Rajesh Parashar, a resident of the area has the option of shopping at Big Bazaar, Apna Bazaar, Subhiksha, Spinach, Shoprite, Foodland or at the local Sai Supermarket, all of which are within a two-kilometre radius of his residence This is paralleled by the developments happening in the Delhi suburb of Ghaziabad, where the upcoming Shipra Mall at Indirapuram already has Big
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT Bazaar operating out of its lower-ground floor, while Reliance is slated to open shop on the third floor. Customer footfalls, however, are more in the projections of the occupiers of the mall than real. All this retail activity, and more, and the sheer gargantuan size of the investments planned, beg the question -- does the consumer's wallet have enough money in it for everyone? "Only time will tell," is KPMG's executive director, Deepankar Sanwalka's laconic answer. To a great extent the success or the failure of malls will hinge on the consumer population of the area. "If the spending power of consumers is high in a locality, it could sustain two-to-three large players." Not so, elsewhere, he adds poignantly. The significance of these remarks sinks in gradually. With planned investments of $22 billion over the next five years -- excluding what might be brought in by new global and large local players henceforth -- the retail sector is expected to grow 40% to $427 billion by 2011. Organised retail, which is 3% of the whole currently, is in turn pegged to grow to $64 billion by 2015. And one consequence of all those investments will be the fact that India's present two square-feet per capita retailing space will rise 15-20% by 2010. To be viable, the huge investments made in the sector by India Inc would have to be responded to by a corresponding massive surge in footfalls. And for that to happen, a lot of links would have to fall in place. Between the drawing board and the emerging market realities, the realisation dawns that a lot of things can go wrong with India's much-heralded retail revolution. The more visible among these loose ends: vexingly high real estate prices, the loosely-knit distribution networks in India's hinterland, the near-absence of any modern supply chain logistics, shortage of skilled personnel, and a regulatory system that resembles a patchy quilt more than anything else.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT Then there is the nature of the business itself. Retailing is a low-margin, highvolume, commodity business where profitability gets strained as competition intensifies. And if wrong choices are made regarding the location or the formatting of the store, woe betide the retailer. The catches are many and to make it big, a retailer would have to negotiate all the tricky turns most of the time. The big players are sanguine, however. "There is enough room for six-to-eight players," says Reliance group chairman Mukesh Ambani, who recently kicked off the first Reliance Fresh outlet in Hyderabad. There are reasons for his optimism: the country's preponderantly young working population, disposable incomes that are expected to increase at an average 8.5% per annum till 2015, and a steadily climbing per capita income (from $460 in 2002, it rose to $620 in 2005). In fact, it is the expectation of a large working and earning population that has attracted most global retailers to the country. But most analysts are agreed that the Indian retail market could at best support 10 large players with revenues in excess of $2 billion each by 2015. Given the number of players getting into the fray today, this clearly means a winnowing out of the weaker retail players. What's more, that time could be sooner rather than later, maybe just three or four years down the line. That's not so surprising, industry insiders even say, pointing out that a large number of the new entrants may not be committed to retailing in the long term. While some almost certainly are looking to act as silent partners for foreign players, others may be more willing to look at an exit option a few years down the line. Says Hemant Kalbag, principal, AT Kearney: "I see consolidation happening in the next five years. That's when the shakeout will happen and the successful retailers will look acquiring less profitable ones." But that's still in the future. As of now, the retail turf is set for some frenetic activity. Reliance has drawn up a Rs 25,000-crore (Rs 250 billion) retail plan that would see its outlets dotting 784 cities and small towns by 2010.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT Already it has 17 stores in Hyderabad alone (the number will go up to 40 by end of the above period). More recently, Sunil Bharti Mittal made news when he announced an alliance with the world's biggest retail chain Wal-Mart, for a supply chain and cash-and-carry venture, besides a franchise agreement for retail. Seen as a coup of sorts, this could exert pressure on other retailers in the country to explore similar collaborative opportunities. Laying the Pipeline Between them the likes of Reliance, the AV Birla Group, the Tatas, the Godrejs, the Bhartis, the Mahindras, the ITC Group and the Wadias -- and a horde of others -- will be sinking in close to Rs 1 lakh crore (Rs 1 trillion) in the business of retail over the next five years. In their crosshairs, are a host of retail-related activities such as cold chains, retail supply logistics, warehousing, sourcing and merchandising
management. All of which are seen as absolutely essential if the front-end retail business is to take off on a meaningful scale across the country. The players have hit the ground running. Reliance is hiring overseas talent to beef up its management capabilities -- it has roped in Peter Bracher from Asda Wal-Mart as special adviser for Reliance Fresh stores and Kevin Pleass from Tesco, UK, to help with store design and construction -- even as the AV Birla group is on a talent hunt ahead of its Rs 15,000-crore (Rs q50 billion) retail rollouts. Retail icon Kishore Biyani is also stepping on the gas -- he has announced plans to roll out 225 Big Bazaar stores and hundreds of other outlets in other formats in the next four years. The Tata group too earlier this year expanded its footprint (beyond the formats rolled out by group company Trent of Westside fame) by entering the durables segment, in a tie-up with Australian retailer Woolworths, with the launch of its Croma store.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT "We plan to have a national presence with 30 stores by March 2008 and double it to 60 by March 2009, with a capital of Rs 400 crore (Rs 4 billion)," says RK Krishna Kumar, Director, Tata Sons, who is spearheading Tata's retail venture. He adds that the company zeroed in on the segment given the findings of an internal study, which revealed that only 0.5% of Indians own air conditioners, just 1% own computers, 3.5% washing machines and 11.7% telephones. Other players like the Dubai-based Landmark group, with its Lifestyle and Max branded outlets, are also keen to expand into the grocery segment. Reports indicate the company is in talks for a tie-up with Carrefour. Then there are players like the K Raheja group's Shopper's Stop and the Rajan Raheja-controlled Globus that are expanding their reach in the apparel and accessories segments. Others like ITC (a big player in its own right), the Godrej group, Century Textiles and Raymond as well as mid-size players like Vishal Megamart, Subhiksha and Sabka Bazaar are busy increasing their footprint. Taking a cue from the global leaders (whose eyes are also on India), India Inc's retailers are thinking big. Reliance Retail, for instance, has chalked out a plan to roll out about 5,500 stores of all kinds in 800 cities, 85 logistics centres and 1,600 farm supply hubs. AV Birla Group is looking at pumping in Rs 15,000-20,000 crore (Rs 150-200 billion) -- with an initial investment of Rs 5,000 crore (Rs 50 billion) in the next few years. Similarly, Bharti is expected to invest Rs 6,000 crore (Rs 60 billion) in the initial phase. Biyani's Pantaloon is not far behind. The group plans to increase its total retail space to 30 million sq ft from the current 3.2 million sq ft; and take its turnover to Rs 2,500 crore (Rs 25 billion) by June 2010. By global scales, the numbers are not out of the ordinary. The Bentonville, Arkansas, based Wal-Mart -- the big brother of retailers -- operates 6,640 stores and wholesale clubs in 14 countries, while its counterpart in Europe (it is based out of UK) Tesco runs 2,600 across 13 countries.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT The others have chains of comparable sizes and reach. To keep their stores stocked with their myriad products, the global retailers have sophisticated procurement strategies in place that hinge on sourcing products globally based on prices, quality and timely delivery. Not to mention deployment of cutting-edge technologies that enable real-time inventory tracking and ordering mechanisms. "Tesco, for instance, can sell jeans for 2 as bulk buying can help it source the same from its global
suppliers at far less than this," says KPMG's Sanwalka. Thus, globally, retail is a business involving massive scales and deep pockets. Climbing the Greased Pole Moving up the evolutionary ladder won't be easy for India's retailers. Especially given the large number of potential spoilers. Availability of quality retail space will be a key determinant for the growth of the sector. With most Indian cities undergoing rapid urbanisation, spiralling rental costs has most retailers worried already. Hitherto, most retailers have preferred to go in for long-term leases. But with real estate prices in most top tier cities hitting the roof in the past two years, lease rental increases are making business unviable for organised retail. According to PricewaterhouseCoopers (PwC), the current average lease rentals across some of the top cities range from Rs 88 per sq feet per month to as high as Rs 120 per sq ft per month. On an average, lease rentals account for 7-8% of the revenue and 40-45% of the non-material cost for retailers. Unless these prices stabilise, most retail businesses could end up taking much longer than originally planned to break even. Not surprisingly then, within hours of making his deal with Wal-Mart public, Sunil Mittal, the chairman of Bharti Group, said his top priority would be real estate acquisition, whether through leasing or buying. To that end, the newly-formed combine is roping in DLF, Emaar, MGF and Ansals to act as partners and developers. Such an arrangement could prove
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT to be a win-win solution: while it will ensure quick roll-outs and lower capex, it could also improve asset utilisation of the developments. At the other end, players like Reliance could set up hypermarkets in their own SEZs to meet the needs of local residents. Another way out of this problem, as some astute retailers have found out, is to become an anchor tenant. According to PwC estimates, an anchor tenant typically commands a discount of 30-45% on lease rentals and is responsible for attracting footfalls into a mall. Retail biggies like Pantaloon Retail, Shopper's Stop and McDonald's have been quick to endorse this strategy. For instance, Pantaloon has signed up with 100 of the 300-odd malls that will be developed over the next three years. This, points out PwC, will enable the retailer to leverage its first-mover advantage on a pan-India basis. Pantaloon Retail currently has 3.2 million sq ft spread across several formats and is expected to have 10 million sq ft of space in the country by 2010. Again, in Tier-II cities, where lease rentals are 40-50% lower than those in top tier cities, Pantaloon has been quick to establish its presence. The retailer's real estate fund, Kshitij 1, which has a corpus of $80 million at its disposal, is understood to have invested in projects in cities like Ahmedabad, Baroda and Surat. Pantaloon expects to have nearly 400,000 sq ft of retail space in these destinations by 2008. The other determinant of success here is the location -- if the outlet is not easily accessible by a large section of consumers due to distance or other issues, viability could come in question. Here the neighbourhood format has an edge. Sanwalka of KPMG is of the view that smaller stores of 1,500-2,500 square feet (as against 150,000 square feet hypermarkets) in neighbourhoods might do better in India. The verdict is still out on that one, and we won't know till one fails.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT Adds KPMG's associate director Kaushika Madhavan, "All new entrants are planning rapid expansion and such a scale of ramp-up requires scalable processes and systems, which retailers are yet to develop. So we would witness mistakes being made as Indian retail evolves. Ability to learn from mistakes will be a critical success factor." And here deep pockets will help. While Biyani already has a successful retail model in place and Bharti will look to cut corners with some help from Wal-Mart, players like Reliance and the AV Birla group would have to go through a longer learning curve. Grapevine has it that soon after the Bharti-Wal-Mart MoU, Reliance Retail's Ateam went into a huddle to discuss its response. The fact that the world's biggest retailer will be pitted against them has not been lost on them: now, Reliance has to worry about Wal-Mart's strength in the make-or-break area of supply-chain management. This will no doubt be factored into the retailer's own mammoth Rs 6,000-crore drive to set up its own logistics, complete with its own airstrips and a fleet of transport aircraft dedicated to airlifting supplies to key markets. Indeed, the key imperative facing retailers in India is that of creating robust, scalable supply chains that would facilitate their rapid spread across the country. "India is a fragmented country and an absence of a strong infrastructure and logistics system makes it all the more challenging to reach consumers," says NV Sivakumar of PwC. A vital logistical link in most retailers' plans happens to be the cold chain. And many of them like Reliance Retail and Future Group are reported to be investing Rs 6,000 crore and Rs 400-500 crore (Rs 4-5 billion), respectively, on setting up logistics. Another big player in the segment will be the Bharti Group. Overhauling this part of the supply chain will be key to the success of any retail venture in food and groceries segment. Currently in India, the wastage levels for perishables
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT are as high as 40% because of a large number of intermediaries as well as loss during transportation as well as through lack of storage. Says KPMG's Madhavan: "The fact is that most retailers in India still don't have a stronghold on operations -- be it merchandising, supply chain management or procurement." Clearly, while the players can build on the experiences of industry leaders in other markets while developing their supply chain, the Indian market may require them to improvise frequently. Foreign retailers have shown that managing operations innovatively can provide a significant competitive advantage to retailers. Wal-Mart, for instance, leverages IT to track supply chain processes like cross-docking very effectively. Similarly, Tesco requires lean production techniques of its suppliers and has high-reliability delivery systems in place such as 'milk-runs'. Most analysts agree that retailers would have put in place global operational metrics. One way to measure efficient operations is the inventory turns ratio. A comparison of the US and India is revealing. Where, in the US, the retail sector has an average inventory turns ratio of about 18 (some retailers like 7Eleven score over 50), most Indian retailers range between four and 10, says KPMG. The other key metric -- stock availability -- is telling too: Where global retailers achieve more than 95% availability of all stock-keeping units on the retail shelves, their Indian counterparts cut a rather poor figure at 5-15%. There are other areas that retailers would have to master -- such as reaping economies in procurement and transportation, bulk storage, trend forecasting to minimise inventory levels -- before they can truly claim to have arrived. Early entrants such as Shopper's Stop and RPG Group are acutely aware of this truth: both took years to bring their supply-chain models to the present
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT efficiency levels. Even a player like the Dubai-based Landmark Group -which has been operating in India for eight years now -- insists it still needs to bring their ERP solution system up to speed. Others may face new, unexpected problems. Scalability is what the likes of Kabir Lumba, Executive Director, Lifestyle International, is banking on for growth. The group, which currently runs 12 stores, plans to open 45 more stores at a cost of Rs 450 crore (Rs 4.50 billion) over three years. Lifestyle's stores attract 40,000 customers every day, and are projected to close fiscal 2006-07 with a sales turnover of Rs 500 crore. Again, when it comes to technology adoption and usage, there's a yawning gap between the Indian retailers and those in the West. According to a recent survey conducted among the country's top retailers by KPMG, while retailers like Wal-Mart and Metro have started using RFID technology (offering high inventory visibility), retailers in India are still to take to bar coding. As systems grow in size and complexity, retailers would have set aside increasing amounts as IT spend. The challenge posed by the global retailers is clearly formidable. But local retailers' more intimate understanding of their customer base will help them survive. Besides, even the world's largest retailers have slipped when it comes to the emerging markets -- Wal-Mart was forced to rework its model in Mexico and a similar thing happened to Carrefour in China, where it had to revise its strategy. Also, Wal-Mart's track record in markets such as South Korea and Germany has been nothing to write home about. The other big issue for retailers is people. Analysts agree that the manpower shortage will get acute as retail spreads beyond the metros. Says Sanjiv Goenka, Chairman, RPG Group: "The biggest challenge for us and, for that matter, any retailer will be getting trained personnel."
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT The Manufacturing Angle With Wal-Mart's advent in the US, the relationship of manufacturers with consumers was drastically altered in the latter's favour. While the results in the case of India's retailers may not be necessarily as dramatic, some major changes would definitely be in order. Strategic sourcing tie-ups between retailer and manufacturer will be the main drivers in this respect. A few weeks after Reliance rolled out its retail plan, one of the first things it did was to negotiate with leading FMCG companies, including Dabur India and Nestle India, for a direct retail account for the products they sold at its outlets. Earlier this year, Pantaloon did a similar exercise and sought 5% higher margins for products sold at its Big Bazaar and Food Bazaar outlets. Says Atul Joshi, head of the no-frills chain Subhiksha's northern operations: "For an FMCG manufacturer, the cost of dealing with us (modern retail) is negligible. We were the first direct retail account with HLL about seven years ago." The no-frills chain assures 8-10% discount to consumers on all products it stocks. While retailers like Reliance, Pantaloon or Subhiksha may be bringing a change, the fact is that ordering or sourcing by retailers is still tactical than strategic, points out a KPMG study. Not many retailers have long-term agreements with suppliers. Also, traditionally retailers have played a passive role in this relationship. In contrast, Wal-Mart actively partners with manufacturers who supply it products to ensure that consumers are offered prices at the lowest prices possible. In fact, it was precisely the retailer's legendary aggression in bargaining that partly drove the massive wave of restructuring of the US industry.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT Indian retailers have their work cut out in this regard, but it is far from clear whether they would be able to emulate this dimension of Wal-Mart's success story. More likely, the retail chains coming up will be less combative in their approach towards manufacturers. "We will have to have a collaborative approach. But the threat from retail to packaged goods industry will prompt companies to invest a lot in R&D," says Adi Godrej, chairman, Godrej Industries. The statement's import is not lost -- private labels have a big potential as promotional costs are low for retailers and the margins fat (as much as 60% against 35% for others). Also, these non-branded products can be offered at far lower price points, generating volume sales. Getting It Right Organised retailers in India are trying out a variety of formats, ranging from discount stores to supermarket to hypermarkets to specialty chains. However, of late, most players appear to be gravitating towards the hypermarket format. Retailers ranging from Pantaloon to RPG to Piramals or the Tatas are working towards exploiting this model, perceived by consumers as more valueenhancing. But in the long run, what is most likely to succeed is a more balanced multi-format strategy. This helps retailers adapt to the very different shopping patterns that can exist within the country and even within regions. Here again, merely copying global trends will not help. In a research conducted by KPMG International in developed markets, it was found that single-format players generated higher shareholder value than multi-format ones. Some feel a combination of cash-and-carry and neighbourhood stores, as in a hub-and-spokes model can be a good bet. Says one retail analyst, nascent markets like India need a lot of room for experimentation on part of the
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT retailers. Ergo, there are no cut-and-dried solutions when it comes to fixing on the right retail format. Finally, while in the first flush of the retail boom, the elimination of traditional intermediaries may bring windfall gains (as well as bring welcome and muchneeded relief to the producers), this source will increasingly dry out as competition intensifies and margins come under pressure a few years down the line. What would set the survivors apart from those who are forced to sell out (or go belly-up) will be differentiators like location, value-added services (convenience), private labels and customer loyalty programmes, other than price. The last, a result of retailer-manufacturer tie-ups, state-of-the-art supply chain infrastructure, global sourcing and scale will be a key factor. And, if experience in other markets is anything to go by, an uncanny ability to read shifting trends.
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Chapter 4: Profile of the respondents
The profile of respondents for this research project covers 10 leading IT companies, providing RFID implementation solutions in India which represents the whole of India geographically. Namely.
TESCO HSC HEWLETT PACKARD MOTOROLA TATA CONSULTANCY SERVICES MINDTREE CONSULTING WIPRO INFOSYS COGNIZANT TECHNOLOGIES SATYAM COMPUTERS PATNI COMPUTERS
All the respondents of these 10 companies are the key persons who are actively involved in either design or implementation of RFID solutions for major retailers in India and across the world.
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Chapter 5: Literature survey Pantaloons experiment with RFID

Much has been written about Radio Frequency Identification (RFID) and what it can do for manufacturersimprove production operations, asset utilization, forecasting, inventory accuracy and customer satisfaction by pinpointing the location and status of products as they move through the manufacturing and retail value chain. Taking a cue from this, Pantaloon Retail (India) has piloted an RFID project at one its warehouses in Tarapur using 1,000 RFID tags. The company is starting from where it matters the most by implementing the technology at the warehouse. Says Chinar Deshpande, CIO of Pantaloon, We want to use IT as a strategic tool to differentiate ourselves in the market with new initiatives such as the RFID project. While a SAP implementation is currently underway, the RFID initiative was more to do with improving the efficiency of the entire supply chain, and we wanted to be the first to execute it. We want to automate the entire supply chain from suppliers to warehouses and stores, and make it transparent. Problems faced The company began to focus more on IT to bring in more transparency in its customer relationships and to streamline its supply chain. Says Deshpande, Whenever we procure merchandise, the entire process had to undergo two to three steps before it reached outlets. At each step, human intervention was required and barcode readers were installed at merchandising locations. Traceability and visibility of goods in the supply chain, lack of a unique identity at each item level, and human intervention leading to errors were some of the issues faced by the company. Further, these challenges led to a lack of co-ordination with the backend at the stores, hampering the companys production planning and inventory management.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT Simplicity wins the day Pantaloon went in for RFID for its simplicity of tagging, efficacy of use, product buffering, ability to keep track of over-produced items, and ability to monitor product-line lead time at the warehouse and fast-moving product-lines. The company selected a few lines of apparel, primarily shirts and trousers,
Chinar Deshpande CIO Pantaloon
for its RFID pilot. The RFID application developed by Wipro Infotech was tailored to the overall solution in line with Pantaloons business processes and IT landscape (from the
factory outward to the warehouse inward and from the warehouse outward) in order to capture real-time data. The application is integrated with Oracle database 10g and middleware along with an implementation of the RFID hardware. It integrates with the existing IT infrastructure, the in-house developed Retail Enterprise Manager. The main objective was to smoothen the entire product lifecycle, introduce item-level tagging for identification, and track the entire RFID roadmap with Pantaloon. The piloting was also to do an RFID feasibility study for additional uses. At the factory outlet, RFID tags were attached to the merchandise and the data written to them. When the RFID-tagged merchandise comes through the inward gate, all related information such as purchase and delivery orders will be fed in the inward terminals in real-time. After correlating the requirements of specific outlets with the merchandise in the warehouse, the items allocated for different outlets will be transported. The tags are removed once the RFIDtagged goods pass through the outward terminal. Getting to grips There were a few hiccups related to integrating the RFID application with Pantaloons legacy IT infrastructure. Since it was meant to be a pilot project, the limitation was that only 1,000 tags were available. Initially, the application was supposed to be only for home-made product lines. As the tagging offers simplicity in goods tracking, re-allocation of manpower became an issue. The inward numbers of a product had not to exceed 500 finished products on a
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT particular day in the warehouse. The selected product line had to be one that had a constant movement and was not seasonal. Additionally, there were operational challenges. Since RFID is a new concept, making factory workers understand it posed a challenge. Handling of RFID tags was an issue because the tags needed to be attached to items and data written to them. Warehouse workers lacked an understanding of the need to pass material through the RFID reader. Removal and return of RFID tags at the factory was also difficult. Uploading files, and managing applications and devices, were not easy through the new application. The RFID evaluation was done in October 2004, and it took four months to implement the pilot project. The pilot was implemented at a cost of Rs 30 lakh, which included the hardware cost (a writer, 2 tag readers and 1,000 tags) and the cost of system integration. Efficiency and accuracy Although with a few hiccups, Pantaloon has enjoyed certain benefits. Recording of data became smooth at the inward and outward terminals, which helped us save time and gain accuracy. Earlier, the possibility of scanning incorrect goods was much higher, affirms Deshpande. Before the implementation, each item used to be scanned through the barcode recorder. After the RFID implementation, the time saved on the same is about 80 percent in inward warehouse processing and 12 percent in outward. Real-time visibility of items during all stages of the supply chain improved to 98 percent. Pantaloon now aims to extend the application to production routing and scheduling, product recall and returns, and real-time data for category managers for effective forecasting. We expect that the RFID application will further help us to improve the shopping experience, store layout and any inventory situation. Going forward, we see the use of RFID technology to improve collaboration across our supply chain right up to the point of sale, remarks Deshpande.
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Wal-Mart Begins RFID Process Changes

Feb. 1, 2005Wal-Mart has begun rolling out the first applications and process changes based on radio frequency identification data at the original seven Wal-Mart stores in Texas that were outfitted with RFID readers. The aim of the applications is to reduce out-of-stocks by providing visibility into the location of goods with RFID tags. "They've been live for [three] weeks now," Simon Langford, Wal-Mart's manager of global RFID strategy, says of the applications in the seven stores. "We'll roll them out to the other 140 RFID-enabled stores in February."
At each of the 104 Wal-Mart stores and 36 Sam's Clubs, the company has installed RFID readers at the receiving docks at the back of the building, near the trash compactors and between the back room and the retail floor. For the cases of goods that are shipped to the stores with RFID tags, Wal-Mart records their arrival by reading the tag on Simon Langford each case and then reads the tags again before the cases are brought out to the sales floor.
By using sales data from its existing point-of-sales system, which is not using RFID, Wal-Mart subtracts the number of cases of a particular item that are sold to customers from the number of cases brought out to the sales floor. Based on that information, software monitors which items will soon be depleted from the shelves and automatically generates a list of items that need to be picked from the back room in order to replenish the store shelves.
"By reading the tags on the cases that are brought out from the back room, we're able to see what items have actually been replenished," says Langford, instead of relying on people to record on a handheld computer what has been picked in the back room. Wal-Mart has developed a handheld RFID reader that acts like a kind of Geiger counter, beeping when an associate gets close to the item he or she needs to pick. That reduces the amount of time spent in the back room. The plan is to provide the handheld devices to
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT associates in the original seven stores and then deploy them at the rest of the 140 stores during the course of the year. The retailer is also sharing data from all its RFID read points with its suppliers through Wal-Mart's Retail Link extranet. When a case is brought out to the sales floor, the system records that it's being put out on the shelves. When the case is read at the trash compactor, the status within the system is changed to "on shelf." Suppliers can get updates on the location of their goods within 30 minutes of the goods movement from one part of the store to another. Despite recent reports that Wal-Mart's RFID deployment is behind schedule, Langford indicates that the retailer is on track. Ninety-four suppliers shipped tagged product to Wal-Mart as of Jan. 31, and more are expected to begin shipping tag pallets and cases in February.
Wal-Mart plans to RFID-enable 600 Wal-Mart and Sam's Club stores and 12 distribution centers by the end of the year. In June 2004, the retailer met with its "next 200" suppliers to discuss how they will use the technology, beginning in January 2006. The company will carry out tagging reviews with them this coming spring. Langford says that these suppliers will not be asked to tag cases and pallets shipped to all 12 DCs and 600 stores at the start of next year but instead to the three DCs and 140 stores that currently RFID-enabled.
"If a supplier wants to ship to all 600 stores, we won't hold them back," Langford says. "Some are eager to move quickly. The perception of RFID is changing. Certainly, the next 200 suppliers have more support and are probably more educated and are in better shape that the first 100, who were the trailblazers. The technology companies, integrators and consultants have learned a lot and are in a better position to help the next 200 suppliers."
Langford says he's very pleased with the 98 percent read rate Wal-Mart has been achieving as goods arrive at the store receiving docks and as they are brought out to the retail floor. It's too early to say what impact RFID is having on product availability for the tagged cases, but Langford says, "The really exciting thing is we're starting to work more efficiently already.
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RFID AT PATNI COMPUTERS
Dilip Dhanuka, Vice-President and Head, Products and Technology Group, Patni, tells ABOUT that Patni's RFID team engaged `Romeo and Juliet' devices to track livestock. How big is the RFID market and how is Patni targeting it? In 2004, the RFID market was $1.49 billion and it is expected to reach $6 billion by 2007. Through automatic identification, RFID opens the doors to a gamut of applications. Patni's SmartVISION for RFID adoption offers solutions in verticals such as manufacturing, pharmaceuticals, retail, aerospace and defence, healthcare, product engineering and software vendor solutions. Our customers leverage our product to gauge the impact of RFID, measure returns, evaluate the technology and deploy it in an end-to-end manner. We also partner with organisations looking to deploy radio frequency
identification. Our team provides solutions not only on RFID, but also on converging it with other applications areas such as sensors and mobility, which we believe will be the future.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT On the application of RFID in the context of mad cow disease... The outbreak of mad cow and foot and mouth diseases have cost the US and Europe livestock industry billions of dollars. India too was hit by the recent outbreak of avian influenza. To provide reassurance on the safety of human food, the unique identification of all animals intended for human consumption has become very important. Patni has developed an RFID-based solution for the traceability of meat from the farm to the plate. This solution was used successfully during the mad cow scare in the US. First of all, all animals in a farm were tagged with unique electronic-IDs, which served as the unique identification purpose. There is a hand-held device (Romeo), which can be used by the farmer to capture the animal data in his farm. Using the Radio Frequency `read' feature of the hand-held device, one can read the electronic-tag of a particular animal and can register data for that animal - such as date of birth, breed specifics, health records, treatment modes, etc. At regular intervals, the hand-held device is docked on another desktop device (Juliet) for data synchronisation. All new/modified data from Romeo is transferred to Juliet, and Juliet will synchronise its data with a central server. The central server consists of animal data from all farms across the country. Thus, from any part of the country one can view animal data on the central server. When animals move from one farm to another, or from farm to abattoir, data such as the date of movement, vehicle-information carrying this animal batch, etc, is recorded. At the abattoir, the RFID is converted to barcode identification and put on the meat package, providing complete traceability of the meat from the farm to the plate. RFID experts suggest a solution that can allow the health department to monitor the health of the flock and the flow of products from any part of the country. Health officials can get alerts in real time, allowing for tracking of all meat, from the livestock stage to the final frozen food stage, and can trace irregularities at any point of time.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT Traceability has a host of applications. Where do you see it being deployed? Based on the costs, standards, and technology maturity, RFID can deliver quick, reasonable return on investment (ROI) mainly in closed-loop applications, such as manufacturing process control, especially for
configurable, high-value products such as automobile engines and bodies and parts, and mobile asset management for assets such as trailers, containers, pallets, and trolleys. It can also be used in security and access control and distribution management of high-value items. As standards evolve and the technology matures, RFID will start playing a key role in open-loop applications too, in helping reduce costs and increasing efficiencies. These include the complete distribution chain, right from the manufacturing warehouse to the retail shelf. And in counterfeit prevention, by creating a trail of product movement history with defined and recorded handovers. As RFID continues to evolve... RFID is an evolving domain. Hardware quality is bound to undergo improvisation and the cost of tags and readers is likely to come down over a period of time. In short, RFID hardware is going to get better and cheaper. Areas such as systems integration, process engineering and automation play a very crucial role in deploying RFID and are also very complex. Organisations should ensure that they provide equal attention to these areas as ultimately it is the `Systems' and `Processes' that are impacted by RFID application.
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Chapter 6: Problem statement & Research objectives

PROBLEM STATEMENT
To study about advantages and implementation intricacies of RFID in logistics management for retail industry, is the problem statement of this research project.
RESEARCH OBJECTIVES
The ultimate aim of carrying out this research project is to answer the following research objectives which eventually give solutions to the project problem statement.
Which strategies and best practices will lead to success in the RFID market? How can RFID technology help organizations improve their Logistics management? What are the challenges in implementing RFID and how can they be overcome? Who are the RFID leading vendors?
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Chapter 7: Research design

Delphi may be characterized as a method for structuring a group communication process so that the process is effective in allowing a group of individuals, as a whole, to deal with a complex problem. To accomplish this "structured communication" there is provided: some feedback of individual contributions of information and knowledge; some assessment of the group judgment or view; some opportunity for individuals to revise views; and some degree of anonymity for the individual responses, As we will discover, there are many different views on what are the "proper," "appropriate," "best," and/or "useful" procedures for accomplishing the various specific aspects of Delphi. It is not, however, the explicit nature of the application which determines the appropriateness of utilizing Delphi; rather, it is the particular circumstances surrounding the necessarily associated group communication process: "Who is it that should communicate about the problem, what alternative mechanisms are available for that communication, and what can we expect to obtain with these alternatives?" When these questions are addressed, one can then decide if Delphi is the desirable choice. Usually, one or more of the following properties of the application leads to the need for employing Delphi: The problem does not lend itself to precise analytical techniques but cart benefit from subjective judgments on a collective basis The individuals needed to contribute to the examination of a broad or complex problem have no history of adequate communication and may represent diverse backgrounds with respect to experience or expertise More individuals are needed than can effectively interact in a face-toface exchange Time and cost make frequent group meetings infeasible The efficiency of face-to-face meetings can be increased by a supplemental group communication process
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT Disagreements among individuals are so severe or politically unpalatable that the communication process must be refereed and/or anonymity assured The heterogeneity of the participants must be preserved to assure validity of the results, i.e., avoidance of domination by quantity or by strength of personality ("bandwagon effect") Those who seek to utilize Delphi usually recognize a need to structure a group communication process in order to obtain a useful result for their objective. Underlying this is a deeper question: "Is it possible, via structured communications, to create any sort of collective human intelligence capability?" This is an issue associated with the utility of Delphi that has not as yet received the attention it deserves.
Characteristics of the Delphi
Usually Delphi undergoes four distinct phases. The first phase is characterized by exploration of the subject under discussion, wherein each individual contributes additional information he feels is pertinent to the issue. The second phase involves the process of reaching an understanding of how the group views the issue (i.e., where the members agree or disagree and what they mean by relative terms such as importance, desirability, or feasibility). if there is significant disagreement, then that disagreement is explored in the third phase to bring out the underlying reasons for the differences and possibly to evaluate them. The last phase, a final evaluation, occurs when all previously gathered information has been initially analyzed and the evaluations have been fed back for consideration.
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Chapter 8: Research limitations
Research investigation is restricted to selected key personnel of the organization. This may at times be their personal view as opposed to the view of the company as a whole.
As the perception level of the respondents has not been tested, it is assumed that all of them have perceived the questions in the correct way.
The ever changing world with rapid change in technology may actually be able to cause the present research study obsolete any time faster but its the way the world we live in..!
Despite of the limitations, maximum care was exercised to make the study scientific & meaningful.
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Chapter 9: Data analysis and inferences

The purpose of the Delphi technique is to elicit information and judgments from participants to facilitate problem-solving, planning, and decision-making. It does so without physically assembling the contributors. Instead, information is exchanged via mail, FAX, or email. This technique is designed to take advantage of participants creativity as well as the facilitating effects of group involvement and interaction. It is structured to capitalize on the merits of group problem-solving and minimize the liabilities of group problem-solving.
The Delphi technique requires a Coordinator to organize requests for information, information received, and to be responsible for communication with the participants. The Delphi technique requires an efficient communication channel to link the Coordinator with each of the participants. We have used email which can decrease the time required for completing a Delphi technique. Nevertheless, the Coordinators job took substantial time.
Process
1. Identify the issue and solicit ideas. Prepare and send the first questionnaire, which asks each participant to engage in individual brainstorming so as to generate as many ideas as possible for dealing with the issue.
2. Response to first questionnaire. Each participant lists his/her ideas (Questionnaire #1) in a brief, concise manner and returns the list anonymously to the Coordinator. These ideas need not be fully developed. In fact, it is preferable to have each idea expressed in one brief sentence or phrase. No attempt should be made to evaluate or justify these ideas at this point in time. M P BIRLA INSTITUTE OF MANAGEMENT 54
3. Create and send Questionnaire #2. The Coordinator prepares and sends a second questionnaire to participants that contains all of the ideas sent in response to the first questionnaire and provides space for participants to refine each idea, to comment on each ideas strengths and weaknesses for addressing the issue, and to identify new ideas.
4. Response to second questionnaire. Participants anonymously record their responses to Questionnaire #2 and return them to the Coordinator.
5. Create and send Questionnaire #3. The Coordinator creates and sends a third questionnaire that summarizes the input from the previous step and asks for additional clarifications, strengths, weaknesses, and new ideas.
6. Continuation of the process. If desired, the Coordinator performs iterations of the preceding process until it becomes clear that no new ideas are emerging and that all strengths, weakness, and opinions have been identified.
7. Resolution. Resolution may occur in one of two ways. If dominant, highly evaluated ideas emerge via consensus, the exercise is declared finished. The end product is a list of ideas with their concomitant strengths and weaknesses.
The Coordinator conducts a formal assessment of the groups opinions of the merits of the ideas. There are a number of ways to conduct a formal evaluation. In one method, the Coordinator prepares a questionnaire that lists all the ideas and asks participants to rate each one on a scale. For example, a 7-point scale could be used that ranges from 0 (no potential for dealing with the issue) through 7 (very high potential for dealing with the issue). If this
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT approach is used, participants send the rating forms to the Coordinator, who compiles the results and rank-orders the ideas based on the evaluations. A second approach for evaluating the ideas is that which is used in the Nominal Group Technique for voting. With this approach, the Coordinator asks each member to identify the top five ideas and assign five points to the most promising idea, 4 points to the next most promising, and 3, 2, and 1 points to the third, fourth, and fifth-best ideas. These votes are returned to the Coordinator, who tallies the results and prepares a report. The report notes the rank order of the ideas based on the total number of points received and indicates the number of people who voted for each idea.
QUESTIONNAIRE #1 The purpose of this questionnaire is to elicit your ideas regarding the following issue:
What are the advantages and implementation intricacies of RFID in logistics management for retail industry?
Please engage in individual brainstorming so as to generate as many ideas as possible for dealing with this issue. Please list each idea in a brief, concise manner and email your response to me. Your ideas need not be fully developed. In fact, it is preferable to have each idea expressed in one brief sentence or phrase. No attempt should be made to evaluate or justify these ideas at this point in time. Your ideas will be anonymously included in the next questionnaire.
Idea #1: Idea #2: Idea #3: Idea #4: Idea #5: Idea #6: Idea #7: Idea #8: M P BIRLA INSTITUTE OF MANAGEMENT 56
RFID ADVANTAGE IN LOGISTICS MANAGEMENT Idea #9: Idea #10:
QUESTIONNAIRE #2 The purpose of this questionnaire is to report all of the ideas sent in response to the first questionnaire and to solicit new ideas for dealing with the issue:
What action could be taken to successfully implement RFID in logistics management of retail companies?
Please refine ideas already received by clarifying them where desired and by listing the strengths and weaknesses you associate with each. Please list any new ideas at the bottom of the questionnaire and comment on each new ideas strengths and weaknesses for addressing the issue. Your ideas will be anonymously included in the next questionnaire.
Idea #1. ................................. Your clarification (if any): Strengths: Weaknesses: Idea #2. ................................. Your clarification (if any): Strengths: Weaknesses: Idea #3. ................................. Your clarification (if any): Strengths: Weaknesses: Idea #4. ................................. Your clarification (if any): Strengths: Weaknesses: . . M P BIRLA INSTITUTE OF MANAGEMENT 57
RFID ADVANTAGE IN LOGISTICS MANAGEMENT BALLOT The purpose of this ballot is to solicit votes for the five ideas that best deal with the issue:
The following are all of the ideas that have been submitted by participants. Please identify the top five ideas and assign five points to the most promising idea, 4 points to the next most promising, and 3, 2, and 1 points to the third, fourth, and fifth-best ideas. Vote for only five ideas. Your ideas will be anonymously included in the next questionnaire. Idea #1: ................. I would give this idea (0, 1, 2, 3, 4, 5) points. Idea #2: ................. I would give this idea (0, 1, 2, 3, 4, 5) points. Idea #3: ................. I would give this idea (0, 1, 2, 3, 4, 5) points. Idea #4: ................. I would give this idea (0, 1, 2, 3, 4, 5) points. Idea #5: ................. I would give this idea (0, 1, 2, 3, 4, 5) points.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT VOTING RESULTS
The following reports the results of votes cast for ideas submitted on the issue:
Please note the rank order of the ideas based on the total number of points received. Also indicated are the number of people who voted for each idea. Idea #6 received 22 points. 5 people voted for this idea. Idea #1 received 20 points. 4 people voted for this idea. Idea #2 received 19 points. 4 people voted for this idea. Idea #8 received 15 points. 3 people voted for this idea. . .RATING SHEET The purpose of this questionnaire is to report strengths, weaknesses, and clarification of all ideas submitted in response to the third questionnaire for dealing with the issue:
Please assess the merits of all ideas listed below using a scale that ranges from 0 (no potential for dealing with the issue) through 7 (very high potential for dealing with the issue). Please email your evaluation to me. After all rating forms have been returned, I will compile the information, rank-order the ideas based on the evaluations, and send you the results. Your ideas will be anonymously included in the next report. Idea #1: ..................................... This idea has (0,1,2,3,4,5,6,7) potential for dealing with the issue. Idea #2: ..................................... This idea has (0,1,2,3,4,5,6,7) potential for dealing with the issue. M P BIRLA INSTITUTE OF MANAGEMENT 59
RFID ADVANTAGE IN LOGISTICS MANAGEMENT Idea #3: ..................................... This idea has (0,1,2,3,4,5,6,7) potential for dealing with the issue. Idea #4: ..................................... This idea has (0,1,2,3,4,5,6,7) potential for dealing with the issue. Idea #5: ..................................... This idea has (0,1,2,3,4,5,6,7) potential for dealing with the issue. . RESULTS The following reports the results of points that participants assigned to the ideas submitted on the issue:
Please note the rank order of the ideas based on the total number of points received. Idea #4 received 66 points, for an average rating of 3.3 Idea #1 received 56 points, for an average rating of 2.8 Idea #2 received 25 points, for an average rating of 1.25 Idea #5 received 20 points, for an average rating of 1.0 .
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Chapter 10: Summary of major findings of research

Four Elements for successful RFID implementation
1. Establish clear objectives
First and foremost you should tackle your RFID project based on a clear set of objectives. Whether you are complying with a retailer mandate or deploying RFID to meet asset tracking needs you must define your desired outcomes. This creates a framework for your decision making. Trade off decisions will certainly arise in your process design, software selection, RFID hardware and solution scope. A clear set of objectives helps keep your team focused on what is most important and separate "must have" from "nice to have" scope elements.
2. Get the physics right
The first point of success and therefore the first point of failure in any RFID system is tag and reader communication. If the reader cannot communicate with the tag, your RFID system will not work properly no matter how elegant your software and processes. Tags must be able to successfully transmit data to the readers for the RFID solution to work properly. However, the effectiveness of tag/reader communication is governed by RF physics. While most implementers will employ trial and error by waving a tag and asking "can you see it now," this invariably leads to poorly performing systems.
One should employ a scientific approach to tag selection and reader optimization in order to maximize your read performance over time. Utilize a lab with licensing and extensive RFID testing and field implementation experience to ensure proper equipment selection and deployment
specifications.
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RFID ADVANTAGE IN LOGISTICS MANAGEMENT 3. Get the process right
If anyone suggests that you can implement an RFID solution without modifying your processes, you can be sure they are not experienced implementers. If you are not tagging product today, then you surely need to add processes to apply and verify tags and most likely to track movement of goods or assets. One should first base his process design on meeting their business objectives. The next step is to modify the new processes where appropriate to increase the read performance. Yes. Process can help improve your read performance. It is one of the variables you have at your disposal to ensure your RFID system can meet your objectives. One may also want to adjust their process to account for constraints of the RFID middleware to reduce implementation, time, complexity and cost. RFID technology ultimately should support the business objectives and processes and not the other way around.
4. Get the systems right
Users need to interoperate with their RFID software. Devices and enterprise systems need to integrate with the RFID software. The biggest delay in most RFID implementations can be attributed to RFID software configuration and integration. Once you have determined the hardware needs and configuration specifications your RFID infrastructure should not be a bottleneck as long as you employ an experienced implementation team. However, from a systems standpoint, every RFID implementation is somewhat unique. RFID
middleware also happens to be the least mature component of any RFID solution stack. End users should take great care designing their RFID systems architecture and selecting RFID middleware. No one RFID middleware vendor can meet all client needs well, so trade offs are an inevitable part of finding a good fit for your needs. As a testament to the variability of end user requirements, ODIN technologies has worked on RFID implementations with six different RFID middleware solutions, none of which could have worked well across all of the solutions. It is worth extra time to make sure that the RFID middleware you M P BIRLA INSTITUTE OF MANAGEMENT 62
RFID ADVANTAGE IN LOGISTICS MANAGEMENT choose can meet your platform, workflow, rules, user interface, device support, data management and integration requirements.
FIG 8: TIMETABLE FOR RFID DATA INTEGRATION The main advantages of RFID implementation in logistics management are: Keep track when stock is running low on shelves or when items have been stolen The movement of inventory can be tracked, Goods can be received and shipped faster, Ease of predicting product demand, Shoppers can save time, Shoppers get a better deal as system becomes more efficient, The right products are available at the right stores at the right time,
Ultimately, giving the organization competitive advantage over its rivals and chance to serve the customers more efficiently.
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The major hurdles associated with implementation of RFID technology are:
No RFID standard has been set yet. The Auto-ID center has worked with standard bodies Uniform Code Council and EAN International to come up with electronic product code, but it is not yet considered a standard.
The smart tag technology is yet to be perfected , today on an average 20% of the tags do not function properly
Physical limitations like reading through liquid or metals still exist Accurate read rates on some items can be very low Increase in expenses - the suppliers will have to equip their warehouses and transport vehicles with readers. These readers have to be connected to the computer networks for exchange of information. All these mean additional costs related to hiring technical consultants and additional hardware.
Inventory networks are burdened with the task of handling data of billions of their products. The company has to hence invest in extremely sophisticated system to process the data properly.
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Some of the major vendors of RFID technology.

Large enterprise application vendors Microsoft Oracle
Infrastructure vendors IBM Sun Microsystems
Integration vendors WebMethods Tibco Ascential Software Teradata DataMirror
Database software vendors Sybase ObjectStore
Supply chain software vendors SAP Manugistics Manhattan Associates Descartes ClickCommerce Red Prarie
Chip vendors Intel Texas Instruments
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Chapter 11: Recommendations
RFID will become critical to most supply chains within the next 10-20 years with the market conservatively projected to be worth $15 billion by 2010.
Despite spending $35 billion on supply chain software major retail companies had more than $2 trillion of inventory sat idle at the end of 2005.
RFID tags need to reach the five-cent-per-chip price point, which is considered to be the threshold where RFID will really take off. Consumer privacy fears could be allayed by the recycling and re-use of RFID tags. However this could make RFID a less powerful means of data collection than frequent flyer schemes, loyalty cards, bank cards, and mobile phone bills.
Integration is the biggest concern for RFID buyers, and as a result customers tend to rely on trusted traditional technology partners rather than approaching niche specialists.
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Chapter 12: Conclusion

RFID offers a first mover advantage to companies as moving early in this space will influence the standards and evolution to suit their needs better. The rest of them can wait and watch and perish while RFID implementation pioneers can ride the wave of operational excellence.
RFID technology is being touted as one of the high potential technologies over the horizon that holds immense value for various businesses. It will become the invisible link between the physical world and the information network.
In terms of technological enhancement, RFID has certainly come a long way from identifying friendly allied planes for Britain in World War II to tracking fast moving consumer goods in the supply chain in the present scenario. But the process of evolution for commercial suitability is still continuing with revision in standards for tags, reader, air interface and data handling by the hour. This phenomenon coupled with the lack of relevant RFID expertise in industry poses risk to all the multiple factors ranging from understanding of business need, technological requirement and the like. To mitigate these risks, an organization should seek assistance from an organization which has knowledge of the business process in that vertical, RFID technology and its limitations and has experience in developing custom applications so that the data generated by RFID infrastructure is utilized to provide maximum benefits to the organization.
Can anybody remember when the times were not hard and
money not scarce?..
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Scope for further study

Will profitability eventually decrease if the status quo is maintained? Will the company lose a potential competitive advantage? Will the company eventually lack sufficient accurate information about its processes or inventory to effectively manage its business?
Will customers' perception of the company suffer? Will the company be able to catch up once competitors implement RFID?
Will existing inefficiencies become unmanageable as the pace of business continues to increase?
Will RFID enhance your company's ability to serve its customers? Improved customer service and customer loyalty are sometimes difficult to quantify. Sometimes it is easier to look at the negative side to understand the value of customer service. In other words:
What is the cost of losing a customer to a competitor that offers better service?
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Bibliography

Retail biz magazine The Economist - magazine Hindu business line newspaper Business standard newspaper Economic times newspaper AC Nielsen RFID trends & insight report
Company reports and white papers of Tata consultancy services Hewlett Packard Patni computers IBM Manhattan associates Cognizant technology TESCO METRO
www.wikipedia.com www.google.com www.network magazine.com www.express computer.com www.ac-corporation .com www.tutorial-reports.com www.walmart.com www.ficci.com www.rfidjournal.com www.aimglobal.org
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Abhishek Sujay 0505 RFID Advantage in Logistics MGMT

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RFID ADVANTAGE IN LOGISTICS MANAGEMENT

A STUDY ON RFID ADVANTAGE IN LOGISTICS MANAGEMENT FOR RETAIL INDUSTRY

Mr. Abhishek Sujay .N. Registration Number 05XQCM6005

Under the guidance of

Prof. Sumithra Sreenath

M.P.BIRLA INSTITUTE OF MANAGEMENT ASSOCIATE BHARTIYA VIDYA BHAVAN. BANGALORE-560001

M P BIRLA INSTITUTE OF MANAGEMENT

RFID ADVANTAGE IN LOGISTICS MANAGEMENT

M P BIRLA INSTITUTE OF MANAGEMENT

RFID ADVANTAGE IN LOGISTICS MANAGEMENT

Place: Bangalore Date: Dr N S Malavalli Principal

M P BIRLA INSTITUTE OF MANAGEMENT

RFID ADVANTAGE IN LOGISTICS MANAGEMENT

Place: Bangalore Date: Prof. Sumithra Sreenath

M P BIRLA INSTITUTE OF MANAGEMENT

RFID ADVANTAGE IN LOGISTICS MANAGEMENT

RFID ADVANTAGE IN LOGISTICS MANAGEMENT

Chapter 3: Profile of the Industry

Chapter 11: Recommendations

Chapter 12: Conclusion

Scope for further study

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RFID ADVANTAGE IN LOGISTICS MANAGEMENT

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RFID ADVANTAGE IN LOGISTICS MANAGEMENT

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RFID ADVANTAGE IN LOGISTICS MANAGEMENT

How RFID works

FIG 2 : RFID WORK CYCLE

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RFID ADVANTAGE IN LOGISTICS MANAGEMENT

Chapter 2: An overview of implementation of RFID in retail stores for logistics management

FIG 3: RFID IMPLEMENTATION HURDLES MATRIX

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PRESENTATION AND MANAGEMENT

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INCOMPLETE PACKAGES AND INFLEXIBLE SOLUTIONS

NEED TO INTEGRATE LEGACY

NEED TO INCORPORATE NEW FUNCTIONS

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RFID ADVANTAGE IN LOGISTICS MANAGEMENT DIVERSITY IN TECHNOLOGICAL STANDARDS

INCOMPATIBILITY IN BUSINESS PROCESSES

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RFID ADVANTAGE IN LOGISTICS MANAGEMENT ROADMAP TO INTEGRATION

FIG 4: RFID INTEGRATION ROADMAP

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Chapter 3: Profile of the Industry

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RFID ADVANTAGE IN LOGISTICS MANAGEMENT

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Pallet & Case Tracking:

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Open Loop versus Closed Loop Applications

The Electronic Product Code (EPC)