Industries that can take advantage of RFID technology to manage specific supply chains are mentioned hereafter. We restrict ourselves to the most significant indus- trial sectors.
5.5.1 Retail Industry
This industry currently uses RFID technology the most intensively. For example, a precise estimation of Wal-Mart annual savings due to RFID amounted to 8.35 bil- lion US dollars. This total is made up of 6.7 billion by reducing the work force re- quired for scanning bar codes, 600 million from avoiding stock-outs, etc.
GAP Inc. is one of the world’s largest specialty retailers, with more than 3100 stores. They operate four of the most recognized apparel brands in the world:
GAP, Banana Republic, Old Navy and Piperlime. GAP uses high-frequency RFID technology for theft avoidance and item detection. Furthermore, GAP has tested the use of RFID tags to track sales of denim clothes and was able to monitor pre- cisely inventory, keeping track on the sizes and types of clothes.
Gillette, the razor manufacturer, launched a large RFID project. It has installed tags on millions of individual items to keep track of the items as they move along the supply chain. Several retailers have been involved in the project; some of them being already converted in RFID technology like Wal-Mart or Metro.
Woolworth’s was a retail company that was one of the original American five- and-dime stores. It designed an RFID system that tracks items from the time they leave the distribution centre until the time they arrive at a specific store.
5.5.2 Logistics
FedEx, founded as Federal Express in 1971, greatly expanded in 1978 after airline deregulation. In this company, a reader is mounted at each of the four doors of the vehicles and at the right side of the steering column. This system allows safely en- tering the delivery vehicle, locking the doors and starting the vehicle.
Metro Group Logistics (MGL) is a provider of logistics services in 25 countries in 2007 and employs 3800 people. The use of RFID technology in its stores and distribution centers reduced losses during transit by 11 to 14%.
YCH Group is the leading company for logistics and supply chain management in the Asia Pacific region. Employees attach tags on pallets of bonded goods when they arrive at a warehouse. This identifies products and their storage locations on arrival. The tags contain, in addition to product ID and location, some other in- formation like next destination and spatial features. The RFID system allows bet- ter supply chain visibility, which can lead to higher profits.
5.5.3 Pharmaceutical Industry
This area is propitious to develop RFID technology since very expensive products are handled in this industry and the level of risk is often very high. We would like to mention a particular application that consists in identifying prescriptions to visually impaired veterans in the US. A special talking reader is used to inform the patient about the drug (name, instructions, warnings, etc.). In the pharmaceutical industry RFID will reduce or even eradicate counterfeiting.
182 5 Radio-frequency Identification (RFID): Technology and Applications
5.5.4 Automotive Industry
RFID technology is currently in use by Toyota (at the painting stations), Harley Davidson (at the assembly stations), BMW (tags provide all the required informa- tion for assembly), to mention just a few.
It should be noted that RFID technology is pivotal in the automotive industry, due to the following factors that require better and faster tracking ability as well as more information available “on the items”:
• The increase of the number of different models and variants of their brands in an environment where the car sales have remained static.
• The introduction of new regulations (End-of-life vehicle – ELV – and block exemption regulation – BER – in the European Communities). The ELV regu- lates the take-back and recycling of used cars, while the BER allows suppliers to sell spare parts on the market.
• Customers’ requirement for better after-sales service, which call for faster and safer access to genuine spare parts.
In the automotive industry, RFID technology provides immediate access to ve- hicle information such as, for example, registration number, owner ID, informa- tion on insurance, shipping date, receiving date and destination. Thus, mainte- nance management is improved and stolen cars can be tracked and recovered.
5.5.5 Security Industry
Some departments of rehabilitation and correction use RFID technology to keep watch on inmates: an alert is sent to prison computers if a prisoner is trying to re- move their watch-size transmitter.
5.5.6 Finance and Banking Industry
Smartcards embedded with RFID chips are used as electronic cards all around the world. This tool is more or less successful, depending on the country.
5.5.7 Waste Management
A number of applications are expected in this domain. One of them concerns waste bins: as a waste bin is emptied and parked, the information is stored in the
tag fixed to the bin. This allows managing waste collection and tracking the bin, if necessary.
5.5.8 Processed Food Industry
They are specific levels in processed food supply chains where significant expo- sure to risk exists. Indeed, approaches like control at critical points of the process, hazard analysis and employee training exist to prevent risk. Nevertheless, item re- call may happen. In the case of recall, the use of RFID ensures that only items from specific production lines will be withdrawn instead of the whole production.