Rfid Adoption

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1520 2007 IRMA International Conference

RFID Adoption: Issues and Challenges
Eric W. T. Ngai, The Hong Kong Polytechnic University, PR China; E-mail: mswtngai@inet.polyu.edu.hk Angappa Gunasekaran, University of Massachusetts – Dartmouth, USA; E-mail: agunasekaran@umassd.edu

IntRoDuCtIon

Radio Frequency Identification (RFID) is an emerging technology that has been increasingly used in logistics and supply chain management in recent years, particularly in the US and Europe. World’s largest retailers are increasingly requiring their suppliers to be RFID compliant. Although RFID is not a new technology, the term RFID has been popular for the past couple of years. We are seeing an increasing interest in this technology by companies (Prater and Grazier, 2005). RFID tools can identify, categorize, and manage the flow of goods and information throughout a supply chain (Ngai et al., 2005). Rapid development of RFID combined with a major push coming from mandatory RFID tagging decree by Wal-Mart and the U.S. Department of Defense and others like European companies Metro AG and Tesco, has caused companies to take a hard look at what RFID can do for them and whether they should give further consideration to adopting the technology. RFID has been around for decades. It is one such technology that we can embed into objects to track location, monitor security, and record the status of events or even environmental conditions (Stanford, 2003). RFID systems have emerged as new forms of inter-organizational systems (IOS) and are used to improve the efficiency of the processes in a supply chain. Because of their capability for use in real-time identification and tracking over long distances, some believe that RFID systems will fundamentally change the way companies do business (Smith and Konsynski, 2003). The following are some of the current issues and challenges facing the RFID technology adoption in industrial applications.

that metals prevent “reading” tags on objects or cartons that contain metal, but the radio waves must have a path into and out of the material. The second technical problem is that one should watch out for the use of the other equipment of the frequency that is near the one used by the RFID solution. For example, the first generation of GSM phones transmits at 900 MHz, as do some handheld RF barcode scanners. This is near enough to 915 MHz to potentially cause interference. This problem can usually be overcome by shielding the RFID reader. security and privacy RFID technology has proven to be reliable, especially in supply chains, and is already showing tremendous advantages. But an automated supply chain mandates the necessity for data privacy, identity and non-refutability, and organizations should ensure the RFID technology they adopt supports their security requirements. Companies need to be aware of the security risks, such as profiling, eavesdropping, denial of service attacks and inventory jamming. Education and training is the best way a business can ensure it understands the limitations and risks associated with RFID adoption. Businesses should not assume that the risks associated with RFID adoption are small because the RF footprint of current generation tags is constrained. Understanding the mean time to crack—access, alter or deny the use of—the tags is a prerequisite to ensure that tag selection embodies the objectives of the company's corporate security policy. RFID has the potential to threaten consumers through intervention of their informational privacy, their physical privacy and security and their civil liberties (McGinity, 2004). Consumers are concerned the possible abuse of personally identifiable data (such as credit card number, security number) and sensitive data (such as prescription drugs) by the retailers when companies adopt RFID technology. A considerable driver of the fear of RFID to consumers is a lack of understanding about RFID technology. Companies should inform consumers...
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