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Role of RFID in Industry

The basic principle of RFID, i.e. the reflection of power as the method of communication, was first described in 1948. One of the first applications of RFID technology was “Identify Friend or Foe” (IFF) detection deployed by the British Royal Air Force during World War II. The IFF system allowed radar operators and pilots to automatically distinguish between friendly and enemy aircraft using RF signals. The main objective was to prevent “friendly fire” and to aid the effective interception of enemy aircraft. In the following, the applications of RFID technology in logistics and supply chain management and the pharmaceutical industry are discussed.

Rapid Adoption in Logistics and Supply Chain Management

The rapid increase in the use of RFID technology in the retail industry has been driven by major players such as Gillette, Tesco, Wal-Mart and Metro AG in Germany.

Wal-Mart, the world’s largest retailer, has started deploying RFID applications and implementing new procedures in some of its distribution centres and stores. By January 1st, 2005, Wal-Mart required its top 100 suppliers to put RFID tags on shipping crates and pallets, and by January 1st, 2006 this was expanded to its next 200 largest suppliers. The aim of the applications is to reduce out-of-stocks by providing visibility into the location of goods using RFID tags. Out-of-stock items that are RFID-tagged have been found to be replenished three times faster than before, and the amount of out-of-stock items that have to be manually filled has been cut by 10 percent.

Gillette and Tesco implemented an item-level RFID project in the United Kingdom. Gillette razor blade cartridges were tagged with RFID tags and Tesco, the retailer, used an RFID reader embedded smart shelf system to search for items in the field in order to take on-shelf inventories.

Metro AG has implemented an item-level RFID trial in its future stores. RFID tags are attached to each Gillette razor blade, Proctor and Gamble (P&G) shampoos, Kraft cream cheese and DVDs. In addition to enhancing stock replenishment operations, consumers also benefit. Shopping trolleys which automatically update shopping lists and self check-out systems have also been implemented using this technology. This demonstrates how RFID can revamp the retail industry and provide new customer experiences.

With better tag and reader technology, declines in the cost of RFID tagging and the release of information sharing platforms, it is likely that RFID will be widely adopted across the supply chain.

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Counterfeit Prevention in Pharmaceutical Industry

As a means of fighting the growth of counterfeit drugs, in Feb. 2004, the U.S. Food and Drug Administration (FDA) endorsed the use of RFID technology to help track and trace pharmaceuticals securely and accurately from manufacturer to distributor to retailer. The regulations will be lifted until December 2007 with the primary goal of this action being to boost adoption of RFID technology. The adoption of RFID enables detailed electronic history (e-Pedigree) of product shipments to be automatically produced, making it harder for counterfeit goods to enter a supply chain. In addition, adding RFID should also raise the complexity and cost of trying to make counterfeit products appear to be genuine.

Several major pharmaceutical manufacturers have incorporated RFID into pharmaceutical packaging as a counterfeit prevention measure. For example, during the packaging of each bottle of Viagra, a label with a passive high-frequency (13.56 MHz) tag is applied. The drug maker - Pfizer, has integrated a tag application and verification process for Viagra sold in the United States. In 2005, Purdue Pharma conducted a pilot programme to secure the flow of prescription drugs from manufacturers to distributors and on to pharmacies by providing a system for tracking and tracing medicines. Accompanying electronic pedigree technologies, RFID tags are placed under the labels of bottles of its pain killer tablets, which are shipped to the drug wholesaler, H.D. Smith, who receives the product, authenticates the pedigree information using digital signatures, certifies the pedigree and makes sure each bottle of medication matches the corresponding serial number on the bottle’s RFID tag.

IDTechEx’s report indicates the worldwide market for RFID tags and systems in health care will rise sharply from $90 million this year to $2.1 billion by 2016. Much of the growth is expected to be spurred on by the item-level tagging of drugs.

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Our RFID Applications

With funding from the Innovation and Technology Commission of the Government of the Hong Kong Special Administrative Region, and support from various industrial collaborators, the Department of Industrial and Systems Engineering of The Hong Kong Polytechnic University (PolyU) launched in 2005 a project titled “The Development of RFID-based Business Solutions for Counterfeit Prevention, Physical Asset Management (PAM), and Commercial Applications (開發應用於防偽、有形資產管理及商業應用的射頻識別技術及解決方案)”.

Based on the deliverables of this ITF project, a case book entitled "Realizing the potential of RFID in counterfeit prevention, physical asset management, and business applications: case studies of early adopters (RFID在有形資產管理、防偽和商業應用:先導應用案例研究)" was published in 2007. This publication summarizes our completed projects that demonstrate the benefits RFID-enabled solutions can offer. It also aims at providing a vehicle for sharing our knowledge and experience gained from these projects. In particular, the cases are presented in three chapters, each of which addresses one of three types of application, namely “Physical Asset Management”, “Logistics”, and “Counterfeit Prevention and Healthcare Management”. The last chapter of this book introduces the patented RFID-enabled technologies developed at PolyU.

If you are interested to our solutions, please click_here to join us. As a member, you can get a copy of casebook.

(English version & Traditional Chinese version)

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