Generic Name For Technologies

Published Date: 02 Nov 2017

Abstract

Radio frequency identification (RFID) is the generic name for technologies that use radio waves to automatically identify individual items that carry such identification tags. Unlike barcodes, which need line of sight sensors, RFID tags do not. As the cost of this new technology falls, the take-up rate by the retail industry will be significant, revolutionizing retailers’ control of the product supply chains and knowledge about the consumer. The research argues that the opportunities and challenges for RFID tags for retailers are significant, and reports on a number of trials that have been conducted by retailers in the UK in the management and introduction of this technology. The research also examines some of the issues facing retailers in terms of the widespread use of RFID tags and the privacy concerns that are linked to data capture and data usage by retailers and third parties.

Table of Content

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Quote 1

Customer focus and commitment to value has propelled Tesco into a leadership position developing a dynamic 'virtuous circle' comprising scale, efficiency and innovation within the supply chain." 1

-Stuart Ross, Director, Supply Chain & Distribution, Tesco, 2005

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Project Title

Did RFID Tags put an end to the problem of Tesco’s supply chain?

Chapter I: Introduction

Introduction

During the last decade, most organisations have implemented enterprise-wide applications and integration platforms. These implementations have delivered benefits in terms of data synchronization and information flows within the organisation, and with trading partners providing valuable inputs for planning and optimization of schedules and reporting. However, automated data capture and tracking in real-time has been a major bottleneck, affecting the ability of organisations to optimize their investments in supply chain solutions over the past several years. The use of the traditional barcode in Tesco’s supply chain has been in existence for over 20 years, despite that, there are still problem in the supply chain such as out of stock, late deliveries and shrinkage – lessening the negative impacts on customer service. Due to competitive market in the retail industries, Tesco has been finding lasting solution in order to remedy the problems in their supply chain management. There has been both internal and external problem facing Tesco’s supply chain management

The balancing act of maintaining a high level of service and low costs is becoming harder for Tesco supply chain management as they try to meet the growing customer mantra of the "more for less". Customers have become more exacting, demanding ever-increasing levels of service. Tesco have responded by increasing the variety of their products, becoming more prices competitive, striving towards higher service levels, and utilizing advances in computing capabilities and information technologies to improve their supply chain efficiency. However, these developments have not been able to completely solve the problem in their supply chain. The internal visibility of inventory has always been a major problem reducing availability of stock at all time.

RFID have emerged as the most promising solution to many of these complex problems. An important promise of RFID technology is to cut costs and deliver a wealth of information that helps firms more effectively understand, predict, and respond to customer demand. RFID is not a solution. It is an enabler that allows firms to change their supply chain processes for the better. RFID is not a new technology. However, the application of RFID technology in the supply chain is new. The use of RFID tags in Tesco’s supply chain has been on trial since early 2003. The question is, "will RFID tagging put an end to the problems of Tesco’s supply chain?

Cavinato, J. (2005), "Supply chain logistics initiatives: research implications", International Journal of Physical Distribution & Logistics Management, Vol. 35 No.3, pp.148-51.

1.2 Background of the Research

Radio frequency identification (RFID) has evolved into a reliable, cost-effective technology used for personal identification, asset management, security, shipping and receiving, inventory control, and many other operations. Improved performance, falling prices, and developing standards continue to move RFID into the mainstream and have made it practical for many organisations to consider its use. This research will help you determine if RFID has been the solution to Tesco’s supply chain problems. RFID is coming to an increasing use of business in replacement of bar codes. One advantage is that it does not require direct contact or line of sight scanning. The unending cycle of rising supply chain costs impacts the bottom line of all players involved. Manufacturers, retailers and distributors consider supply chain cost reduction as a critical issue to be addressed in their business. This desire to cut supply chain costs has pushed radio frequency identification (RFID) technology into the limelight in retails.

1.3 **Aim of Research***

The aim of this research is to find out if the application of RFID in Tesco’s supply chain was successful and also if the implementation of the modern innovation was cost effective and benefit to the Tesco’s supply chain management.

1.4 Research Objective

This research is to analyze if RFID tagging is the lasting solution to the problem in Tesco’s supply chain management. In lieu with this, the following objectives will be address:

Determine if RFID tags improves availability, traceability and cut cost in supply chain

Determine whether RFID tags is a better alternative to the traditional bar code

Determine if the implementation of RFID in Tesco’s supply chain was successful.

Determine whether RFID tags are consistent and secure to both customers and the management of Tesco’s and also to make recommendations about realistic improvement in their supply chain management.

1.5 About Tesco

Tesco plc is Britain leading retailer; it is a British international grocery and general merchandising retail chain. It is the largest British retailer by both global sales and domestic market share, with profits exceeding £3 billion, and the third largest global retailer based on revenue, behind Wal-Mart and Carrefour. Tesco runs more than 4,330 stores in the UK (where it's the #1 retailer), and 13 other countries in Europe, Asia, and now also in the US (under the Fresh & Easy banner). It was founded by Jack Cohen in 1919 with a stall in the East end London. Tesco has grown tremendously from operating as a single stall in East End London during the early 1919 to chains of diversified empire. Despite the fact that there were lots of competitions, they still struggled to stay on top in the UK. Their major competitors in the UK are both Sainsbury and Asda.

"Tesco, the UK-based grocer, is an example of a success story. They have learned how to go beyond Wal-Mart. They came to Dan Jones ten years ago and asked, "How would Toyota run a grocery business?" And they've been working hard to become the Toyota of the grocery business ever since."

-James Womack, Co-Author, the Machine that Changed the World, and Lean Thinking, 2005.

1.5.1 Tesco’s Supply Chain Problem

The strategic solution helped provide Tesco with the needed inventory visibility to reduce traditional supply chain problems such as late deliveries, out-of-stock items and shrinkage – lessening the negative impacts on customer service. Tesco can now monitor the delivery of its goods as they move from warehouse to outlets, helping to ensure improved availability of its wide range of products and promoting the satisfaction of its loyal customer base.

1.6 About RFID

Radio frequency identification (RFID) is an emerging and evolving technology designed to automate and improve the efficiency and accuracy of the asset management process wherein the assets are identified and tracked. Radio frequency identification systems are used in a wide variety of applications, and provide convenient mechanisms for the tracking, identification, and authentication of persons or objects. RFID technology provides an alternative to bar code reader technology for distinguishing and recording items for purchase. Radio frequency identification tags and labels are widely used to associate an object with an identification code. Tags are devices that can come in many sizes and form factors, but are usually small and lightweight. A typical RFID tag includes RFID circuitry and an antenna by which signals are received from or transmitted to an RFID reader located within the operating range of the RFID tag. The tags respond to the interrogating RF signal from the RFID reader to retrieve the information stored in their memory. Tags are commonly used as portable data devices that wirelessly communicate with RFID readers at distances ranging from a few millimeters to several meters. Radio frequency identification systems generally use a fixed position base station capable of reading portable tags attached to personnel, assets, or other objects. RFID devices generally have a combination of antennas and analog and/or digital electronics, which may include for example communications electronics, data memory, and control logic. An RFID system typically includes one or more readers deployed at selected locations in an installation. During operation, the RFID circuitry receives a signal communicated from the RFID reader and generates a signal which is communicated back to the RFID reader.

1.6.1 Types of RFID

There are two types of RFID tags and they are active and passive tags. They are:

Passive RFID Tags

Passive RFID tags have no internal power supply. The minute electrical current induced in the antenna by the incoming radio frequency signal provides just enough power for the CMOS integrated circuit in the tag to power up and transmit a response. The lack of an onboard power supply means that the device can be quite small: commercially available products exist that can be embedded in a sticker, or under the skin.

Active RFID Tags

Unlike passive RFID tags, active RFID tags have their own internal power source which is used to power any ICs that generate the outgoing signal. Active tags are typically much more reliable (e.g. fewer errors) than passive tags due to the ability for active tags to conduct a "session" with a reader. Active tags, due to their onboard power supply, also transmit at higher power levels than passive tags, allowing them to be more effective in "RF challenged" environments like water (including humans/cattle, which are mostly water), metal (shipping containers, vehicles), or at longer distances.

Many active tags have practical ranges of hundreds of meters, and a battery life of up to 10 years. Some active RFID tags include sensors such as temperature logging which have been used in concrete maturity monitoring or to monitor the temperature of perishable goods. Other sensors that have been married with active RFID include humidity, shock/vibration, light, radiation, temperature and atmospherics like ethylene.

Active tags typically have much longer range (approximately 300 feet) and larger memories than passive tags, as well as the ability to store additional information sent by the transceiver. The United States Department of Defense has successfully used active tags to reduce logistics costs and improve supply chain visibility for more than 15 years. At present, the smallest active tags are about the size of a coin and sell for a few dollars.

Chapter II: Literature Review

3.1 Introduction

Information technologies should be considered as a significant organisational asset. In this context, the application of the appropriate strategies for its development, can lead to the improvement of supply chain management both in the short and the long term. An RFID system can be briefly described as follows: an electronic tag containing historical, transactional or identifying data are affixed to or embedded in an object. The data are automatically downloaded wirelessly to a computer when the object nears the vicinity of an RFID reader. Once on the computer, the information can travel anywhere that is accessible by the internet or on a private network.

While the implementation of RFID in the retail sector is a recent innovation and a predicted departure of traditional barcode technology, RFID technology is not a new concept and according to Bhuptani et al., (2005: 25), can be traced back to World War II, when the British military needed to find a way to identify whether an approaching aircraft was friend or foe. There are numerous benefits to adopting RFID in Tesco supply chain such as tracking and tracing goods and the containers that hold them, even in harsh environments, since RFID tags do not wear out and do not require line-of-sight to function (Sandip, 2005: 52). RFID can uniquely identify products, cases, and other items, which increases productivity and save on labour costs in comparison to barcode technology (Sandip, 2005: 115; Lee et al., 2005). RFID virtually eliminates the need to have people locate items and manually scan barcodes. Unfortunately, as with most technology, RFID also has its limitations too. As Electronic Journal Information Systems Evaluation Volume 13 Issue 1 2010 (87 – 96) mentioned, RFID tags and transponders transfer information via radio waves. These radio waves can be subject to interference, mainly from metal and liquid products, especially when merchandise is packaged in metal cans or containers (Sandip, 2005: 60). These potential sources of interference must be recognised and accounted for during system planning. Unlike barcodes, it is quite possible for a bad or damaged tag at the item level within a batch of goods to go undetected when passing through the reader (Sandip, 2005: 60). RFID systems consist of more than just the tag. There are several components which introduce integration complexity (Finkenzeller 2003, Sandip 2005 and Shepard 2004). These components include:

A programmable RFID tag or transponder for storing data (exception: read-only tags).

An antenna to facilitate the reading and writing of data on the tag. In the case of a passive tag, the antenna assists in powering the tag.

A reader that encodes or decodes the data in the tag’s integrated circuitry. In the case of passive RFID systems, the reader also supplies power to the tag.

Software components that are required to communicate between the application and the hardware, such as tags and readers. These components include RFID system software, middleware and host applications.

Figure 1: A typical passive tag with antenna

Figure 2: Illustrate an RFID system with various building blocks (Sweeney, 2005: 78)

One of the major factors restricting the development of RFID technology is the disunity of RFID standards (IDTechEx 2004). Clearly, organisations do not want to back a particular RFID standard which may be superseded by another. Currently, the two major standards are International Standards Organization (ISO) and EPCglobal (previously known as Auto-ID). Given the obvious benefits to implementing RFID as well as some impediments as mentioned above, currently, the 3rd world’s largest retailer; Tesco in the UK has already adopted RFID technology within their supply chains. (Bhuptani et al., 2005: 31; Shepard, 2004:144). Tesco in particular mandated that their top 60 suppliers use RFID tags on all product deliveries by 2005 (Wal-Mart, 2005). Despite some delay, the process was successfully accomplished and development is ongoing (IDTechEx Ltd, 2003e). The literature review included diffusion of innovation theory; the fundamental theory that explains how a new idea or innovation is spread within a social system, which consists of individuals, informal groups, organisations and subsystems (Rogers, 2003). For reasons of brevity, these theories are merely listed below. They include:

Adoption of information technology innovation theory (Moore and Benbasat, 1991)

Theory of reasoned action (Fishbein and Ajzen, 1975)

Social cognitive theory (Bandura, 1977; Bandura, 1986)

Technology acceptance model (Venkatesh, Morris, Davis and Davis, 2003)

Theory of planned behaviour (Ajzen, 1991)

Model of personal computer utilization (Thompson, Higgins and Howell, 1991)

Table 1: Authors referred to in the literature review as referenced in table 2. A: Montgomery (2006)

K: Eckfeldt (2005)

B: Aberdeen Group (2005)

L: Commonwealth of Australia (2006)

C: Swanton (2005)

M: Leong, NG and Cole (2006)

D: VDC (2006)

N: Asif and Mandviwalla (2005)

E: ATK and KSA (2004)

O: Michael and McCathie (2005)

F: Davison and Smith (2005)

P: Huber, Michael and McCathie (2007)

G: Wu, Nystrom, Lin and Yu (2006)

Q: Angeles (2005)

H: Seymour, Lambert-Porter and Willuweit (2007)

R: Juels (2006)

I: Cooke (2005)

S: Staake, Thiesse and Fleisch (2005)

J: Walker (2004) These theories can be grouped under individual-level and organisational-level technology adoption, each theory addressing particular adoption constraints with a view to understanding how individuals, organisations as well as groups may perceive the viability of adopting a particular innovation. Put together, individual-level technology adoption and organisational-level technology adoption (adoption of IT innovation theory and the diffusion of innovation model), represent a wealth of knowledge regarding the innovation adoption process. These theories provide evidence that a variety of factors influence whether potential adopters and

consumers will accept or reject new technology within a social system (Baskerville and Pries-Heje, 2001). Following on from the investigation into diffusion of innovation theory, the literature review investigated adoption barriers and if the implementation of RFID tags in Tesco supply chain is successful. The authors and their respective concerns are listed in table 1 and 2 respectively.

Determine whether Barcode vs. RFID

Table 1: Response from the survey

The findings from the survey shows that 45% (Respondent 1) of the respondent says that RFID tags and barcodes both carry information about products. RFID is not necessarily "better" than bar codes. RFID and bar code are two different technologies and have different applications that sometimes overlap. The main differences are they require hardware tools and the ways both technologies exchange data’s. 25% (Respondent 2) of the respondent believes that RFID is a better technology compared to the traditional barcode. Respondent 3 (19%) believes that both technologies have their different specialty in Tesco supply chain. Respondent 4 (11%) believes that the world is now a global village and that their supply chain need changes.

RFID enthusiasts claim numerous advantages for their technology as compared to the older bar code system. In many cases, these claims are accurate, but in others the claimed superiority exists only under certain circumstances. Today, retailers would not think of operating their distribution centers without bar codes because of the proven efficiency improvements the technology provides. RFID promises the same potential to improve operations. However, RFID will not replace bar code technology but can effectively enhance bar code-based data collection systems where additional visibility or automated processing is desirable. RFID tags are an improvement over bar codes because the tags have read and write capabilities. Data stored on RFID tags can be changed, updated and locked. Tesco has begun using RFID tags in some of their operations and have found out that the technology offers a better way to track merchandise for stocking and marketing purposes. Through RFID tags, Tesco can see how quickly the products leave the shelves and who's buying them, despite the fact that there were complains about the technology. The following subsections state advantages that proponents of RFID claim their technology has over bar codes. This research look at each advantage to see under what circumstances it is true.

Figure 2: Differences between RFID and Barcode

Cost: RFID are more expensive compared to barcode as illustrated on the graph above.

Dynamic Data: RFID read-write data contents can be changed and added to after they have been commissioned. Bar codes’ have the capabilities to record process or \environmental data such as temperature, moisture, radiation, or time of tampering.

Line of Sight: Direct line-of-sight access is not required to read a tag. But bar code scanners must have good line-of-access to the labels. This can have significant impact on the workflow in many circumstances, as it means that the RFID tags can often be read without human assistance.

Read Range: Proponents claim that RFID tags can be read over much greater distances than bar codes. Bar codes usually must be within a few feet of the scanner in order to be readable, although there are long range scanners available. UHF tags can be read routinely at distances up to about 20 feet, and active tags can be read at distances as 300 feet.

Storage Capacity: RFID tags can store more data than bar codes can represent. As described previously, the most popular bar codes store only about 11 characters of useful data, although there are bar codes that can encode hundreds or thousands of characters of data. Nonetheless, with their electronic memories, there are tags that can hold substantially more data in smaller spaces.

Multiple Reads: Multiple RFID tags can be read at one time as they travel through a portal. Only one bar code can be read at a time through that same portal. Often, the bar code scanner is the bottleneck in a system, the element that limits the speed of the entire process.

Survivability: RFID tags can be designed to survive hostile environments that would destroy a bar code label, or at least make it illegible. RFID tags will function when painted over, buried in dirt, or covered with mud and snow. These are situations in which bar code become unreadable.

Programmability: RFID tags can be programmed to perform calculations, record sensor readings, and perform logical operations. An active tag can function as a small computer. A bar code is only a static storage mechanism.

Accuracy: RFID tags are said to be more accurate than bar codes and less likely to produce erroneous reads. This advantage, widely claimed, is not supported in actual usage.

Pallet

Case

Containers

Others

Figure 1: The Use of RFID in Tesco supply chain

Findings and Discussion

RFID technology faces many challenges. Some are systematic, and others are as a result of negative perceptions. In order to implement RFID systems successfully, some of the key barriers that hinder RFID adoption needs to be understood. Table 3 provides a summary of the technological constraints.

Technological constraints

Table 3: Technological constrain

Table 3: Technological constraints Area of Constraints

Hypothesis Set

Factor Analysis of Perceived RFID Barriers

Statistical Result: is or is not a barrier

Technological

1

Lack of technological usefulness and advantageousness

No

2

Lack of a business case

No

3

Lack of global standards

Yes

4

Not suitable for product assortment

No

5

Poor tag reader accuracy and rates

Yes

6

Large amount of data would swamp the business

No

7

Complexity of technology

No

81.8% of respondents believe RFID technology would provide additional value if deployed within Tesco supply chain. 60.6% believe there is a convincing business case for RFID adoption in Tesco supply chain. 66.6% of respondents believe that a lack of global standards is a hurdle for a full RFID implementation. 69.7% believe RFID technology is suitable for product assortment. 39.4% agree that poor reader accuracy is a barrier to RFID adoption while 44% were neutral and only 18% disagreed with this statement. 33.4% of respondents agree that poor RFID read rate is a barrier to RFID adoption while 54.5% were neutral and 12.1% disagree with that statement. 72.7% believe an RFID system does not generate too much data and 75.7% of respondents believe RFID systems are not too complex for users.

Discussion: All but two of the technological constraints were not considered as barriers to RFID adoption. The management of Tesco, however, consider poor tag reader accuracy and tag read rates as a drawback of the technology. This barrier will have a direct impact on product detection, and as a result, Tesco are concerned that the problem could cause direct financial losses due to inaccurate data. Hence poor tag reader accuracy and read rates are a barrier to the full implementation of RFID in Tesco’s supply chain

There is also concern over the lack of global standards for RFID adoption. Unfortunately, there is no agreement amongst retailers on which standard to adopt in South Africa. There is furthermore a lack of regulation or guidance from the government on which standards should be followed when implementing RFID technology in South Africa. Uncertainty about the future direction of RFID standards is without doubt a factor causing retailers to hold back on the adoption in South Africa. Lack of global standards is seen as a barrier to RFID adoption.

Costs and Return on Investment (ROI)

Area of Constraints

Hypothesis Set

Factor Analysis of Perceived RFID Barriers

Statistical Result: is or is not a barrier

Cost and ROI

8

The high cost of hardware and infrastructure

Yes

9

The high cost of software, integration, service, and support

Yes

10

The high cost of tags

Yes

11

Unclear ROI

Yes Table 4: Cost and ROI Constraints

A total of 75.7% of respondents believe the high cost of RFID hardware and infrastructure is a barrier and 72.7% believe the high cost of RFID software, integration, service and support is a barrier. 72.7% believe the high cost of RFID tags to be a barrier and 69.7% believe uncertainty in return on investment is a barrier.

Discussion: Cost and ROI are considered key determinants as to whether or not to adopt RFID technology. Currently, the high prices of RFID components including hardware, software and tags make it hard to see an immediate return on investment. As a result, retailers will not rush in without first researching the best RFID strategy suitable for their requirements. Certainly, most SA retailers view RFID adoption from a business standpoint, not just a technological one; thus, examining the cost and return on investment is critical for adopting RFID technology.

4.3 Privacy and security constraints

Table 5: Privacy and security constraints Area of Constraints

Hypothesis Set

Factor Analysis of Perceived RFID Barriers

Statistical Result: is or is not a barrier

Privacy and Security

12

Customer privacy concerns

Neutral

13

Security concerns

Neutral

39.4% of respondents believe consumer privacy is a concern, however, 36.4% of respondents disagree with this statement, and 24.2% neither agree nor disagree. 30.3% of respondents believe RFID security is a concern, however, 30.3% of respondents disagree with this statement, and 39.4% neither agree nor disagree.

Discussion: It is interesting that privacy and security issues remain neutral. Customer privacy concerns are mostly raised by privacy advocates abroad who do not have a major influence in South Africa. It is believed that the majority of customers in South Africa are not currently aware of the next generation of identification technology, such as RFID, let alone the privacy implications this may have on their lives. As a result of this lack of awareness, retailers are not under pressure to address this potential privacy concern. As general public awareness increases, South African retailers, like their counterparts in other countries will have to give this factor more attention. Hence, customer privacy should be a factor to consider in RFID adoption.

A concern about security is somewhat related to privacy. It is about how to keep RFID information safe from hackers or intruders, rather than concentrating on securing customer information, hence, it is more focused internally in the business. It is believed that one of the main reasons SA retailers are not concerned about RFID security is that there are currently no major threats against RFID technology, particularly in South Africa. As RFID technology gains in popularity amongst individuals, retailers and in other marketplaces, security will become increasingly important, while individuals try to exploit this technology for their own benefits. As a result, security concerns will heighten over time.

4.4 Implementation constraints

Table 6: Implementation constraints Area of Constraints

Hypothesis Set

Factor Analysis of Perceived RFID Barriers

Statistical Result: is or is not a barrier

Implementation

14

Compatibility and integration with other technology

Yes

15

Implementation challenges

Yes

16

The need to fix data synchronisation first

No

17

RFID authentication challenges

Neutral

45.5% of respondents believe that the compatibility and integration of RFID technology with other technologies is a barrier. 69.7% believe that challenges relating to RFID implementation are a barrier. 54.5% believe that data synchronisation between RFID systems and other systems is a problem. 15.2% of respondents agree, 66.7% neither agree nor disagree and 18.2% disagree that a lack of authentication in RFID systems and tags is an adoption barrier.

Discussion: Implementation constraints are clearly potential barriers to wide-scale deployment. As indicated in table 6, two out of four implementation factors are considered barriers to RFID adoption by SA retailers. How retailers view the difficulty of implementing RFID is a critical aspect to be measured by retailers that intended to mandate RFID technology in their business. There is no evidence indicating whether or not RFID authentication challenges are a barrier to RFID adoption in the retail sector.

4.5 Privacy and security concerns

Table 7: Privacy and security constraints Area of Constraints

Hypothesis Set

Factor Analysis of Perceived RFID Barriers

Statistical Result: is or is not a barrier

Privacy and Security

12

Customer privacy concerns

Neutral

13

Security concerns

Neutral

39.4% of respondents believe consumer privacy is a concern, however, 36.4% of respondents disagree with this statement and 24.2% neither agree nor disagree. 30.3% believe RFID security is a concern, however, 30.3% disagree with this statement and 39.4% of respondents neither agree nor disagree.

Discussion: It is interesting that SA retailers are undecided whether or not privacy and security concerns pose a barrier to RFID adoption. This is contrary to the findings from the literature review, which indicate that most researchers and research organisations see privacy and security issues as a key barrier. As previously discussed, when consumers and retailers gain a greater awareness of RFID technology, and the install base increases, so will security risks increase as exploiters realise on the value of data contained within these systems. Hence, it is believed that customer privacy concerns and security concerns should not be discarded as barriers, and must be included in the framework.

4.6 Organisational constraints

Table 8: Organisational constraints Area of Constraints

Hypothesis Set

Factor Analysis of Perceived RFID Barriers

Statistical Result: is or is not a barrier

Organisational

18

A high degree of business process change required

Yes

19

Lack of awareness

Yes

20

A lack of identifiable business needs

Neutral

57.5% of respondents believe that a high degree of business process change required is a barrier. 60.6% believe that a lack of awareness in RFID technology is a barrier. 48.5% believe that a lack of identifiable business needs is not a barrier for RFID technology. 15.2% of respondents neither agree nor disagree, 30.3% of respondents agree and 6.1% of respondents strongly disagree that a lack of identifiable business need is an organisational barrier.

Discussion: An examination of the impact of organisational constrains on RFID adoption revealed that a high degree of business process change and lack of awareness are barriers. It is also interesting to note that the answer to ‘no identifiable business need’ is neutral, which means that there is no evidence to determine whether this factor is or is not a barrier.

4.7 People constraints

Table 9: People constraints Area of Constraints

Hypothesis Set

Factor Analysis of Perceived RFID Barriers

Statistical Result: is or is not a barrier

People

21

The unwillingness of the customer and supplier to use it

Yes

22

Lack of senior management support

Neutral

23

Lack of skilled personnel

Yes

69.7% of respondents believe that a lack of willingness to use RFID technology is a barrier. 39.5% believe a lack of senior management support is a barrier while 24.2% neither agree nor disagree and 36.4% disagree with this statement. 63.6% believe that a lack of skilled RFID personnel is a barrier.

Discussion: The customers’ and suppliers’ lack of willingness to use the technology is a general concern for RFID adoption, and most retailers believe that this is a major adoption impediment. The reason is that retailers alone would not gain maximum benefits from a closed RFID system, since the scope of application of a closed system is limited within a single organisation. There are a multitude of benefits to be derived by an organisation integrating RFID across the entire supply chain. These benefits would positively impact risk and costs while increasing efficiency and success. Hence, an unwillingness of the customer and supplier to use the technology is a barrier to RFID adoption. Surprisingly the response from SA retailers on the issue of senior management support did not clearly indicate whether or not this factor is a barrier to RFID adoption. However, it is believed that a major drawback to wide-spread deployment of RFID systems is people’s overall attitude towards the technology. A possible reason for this research outcome could lie in the nature of the targeted respondents, as most respondents, if not all, were IT professionals, who are more likely to understand and support RFID adoption than other senior management who do not have the same insight. Furthermore, a lack of awareness, as identified earlier, indicates that in general, retailers have insufficient knowledge about RFID, and as a result, would not support its adoption. Hence a lack of senior management support has not been discarded from the framework and is considered a barrier to RFID adoption. RFID-knowledgeable personnel are hard to find. Many SA retailers, regardless of size, would discover they have no qualified RFID personnel. Without expert skills, retailers might end up spending too much time and money on an RFID project, possibly leading to its failure. Hence, SA retailers regard the lack of skilled personnel as a barrier to RFID adoption

4.8 Environment constraints

Table 10: Environment constraints Area of Constraints

Hypothesis Set

Factor Analysis of Perceived RFID Barriers

Statistical Result: is or is not a barrier

Environment

24

Social influence

No

25

The effect of radio emissions on personal health

No

48.5% of respondents believe that social issues surrounding RFID technology is not a barrier while 27.3% neither agree nor disagree and 24.2% agree with this statement. 69.7% of respondents believe that the impact of RFID technology on human health is not a barrier while 27.3% neither agree nor disagree and only 3% of respondents agree with this statement.

Discussion: Given the existing minimal install base of RFID in South Africa and the resultant lack of public knowledge and understanding of the technology, it is believed that environmental issues which include social influence as well as health concerns have not really been explored. There is evidence of these concerns in the international market. Within a South African context, these issues are not considered barriers to RFID adoption.

Summary

There are 16 barriers identified to be stumbling blocks to RFID adoption in the South African retail sector. These barriers are grouped according to areas of constraint and are illustrated in Table 11. in terms of an enhanced framework. The framework of RFID adoption barriers are sorted according to each category (area of constraints), rather than importance. This framework is an outline of the barriers impacting RFID adoption in the SA retail sector that need to be addressed.

Table 11: Enhanced framework of the barriers to RFID adoption in the South African retail sector (1/2)

Table 11: Enhanced framework of the barriers to RFID adoption in the South African retail sector (1/2) Area of Constraints

RFID adoption Barriers

Technological

Lack of global standards

Poor tag reader accuracy and rates

Cost and ROI

The high cost of hardware and infrastructure

The high cost of software, integration, service, and support

The high cost of tags

Unclear ROI

Area of Constraints

RFID adoption Barriers

Privacy and Security

Customer privacy concerns

Security concerns

Implementation

Compatibility and integration with other technology

Implementation challenges

RFID authentication challenges

Organisational

A high degree of business process change required

Lack of awareness

People

The unwillingness of the customer and supplier to use it

Lack of senior management support

Lack of skilled personnel

Chapter III: Research Methodology

3.1 Introduction

The research will be intensively based on the collection of primary data and analysis of both primary and secondary data. The major reliance of the research design is collection of primary data via questionnaire and then preference will be given on the statistics on the application of RFID in different retailers especially in Tesco supply chain management. The secondary data collection is from text books, database, journals and online library. This research is designed with more focus on the application of RFID tags in Tesco’s supply chain and whether this technology is reliable, secure, consistent and also improves availability, traceability and cut cost. This technology is supposed to be an alternative or replacement to bar code as anticipated by the management of Tesco. Therefore, the questionnaire is rightly designed in consideration of Seven Ps of marketing mix in-order to understand the quality standards of services at the par of RFID implementation.

The questions in the questionnaire are consisted of two parts. The part one tries to explore the management of Tesco satisfaction and perception regarding to the implementation of the technology; however the Part two actually examines if the technology is the lasting solution to the problem of Tesco’s supply chain management. The first part examines the quality of service as being executed at Tesco. The second part examine if the implementation of the technology improves efficiency and accuracy of the asset management process wherein the assets are identified and tracked successfully.

3.2 Research Framework

The researcher has developed the questionnaire in order to collect quantitative and qualitative data. It will undergo a reliability and validity pilot test. The language of the questionnaire is English, since Tesco is an English company. There will be three parts to the questionnaire, which will consist of list questions, rating questions and open questions. The variables of this test will be described using SPSS in order for the researcher to analyze by quantitative data analysis. For the qualitative data which supplements the quantitative data, it will be analyzed using content analysis.

3.3 Sampling

The population will be the management and staff of Tesco; a total of n= 50 staff will complete the survey. The sampling technique needed for the case study will be non- probability sampling which are purposive and convenience.

3.4 Data Collection tool

The data collection tool is the designed questionnaire, which is consisted of twenty questions. The collection will be through questions of open ended and close ended type. These types of questions will try to analyze the assessment and expectations regarding to the application of RFID tags in Tesco’s supply chain.

3.5 Data Collection

The research will be based on positivism principles with deductive approach. Since no evident research has been recorded yet therefore major reliance will be over the primary data collection. The questionnaire developed was sent electronically via email to twenty distribution centres of Tesco, which are Antrim, Livingston, Belfast, Middlewich, Chesterfield, Doncaster, Coventry, Crick, Daventry 1, Peterborough, Blackmills, Wellham Green, Fenny Lock, Hallow, Thurrock, Didcot, Weybridge, Chepstow, Magor and Southampton and 20 retail stores. 3 of the retail stores were visited by the researcher and the questions in the questionnaire were answered by the managers of each store. The questionnaire sent electronically by the researcher made it crystal clear to the management of Tesco that the research was strictly for an Academic purpose. The 3 retail store visited by the researcher, Permission was granted by the resort manager to conduct this study following highest ethical standards and principles.

3.6 Data Analysis

This study is expected to provide recommendations on the improvement of a more effective supply chain management and how RFID technology will be fully utilized both internally and externally. The study will aim to ascertain if the technology will improve visibility, availability, traceability and cut cost. The analysis will also examine if the implementation of the technology at Tesco supply chain was successful. This is to determine if RFID is a replacement to Barcode. Thus in a nut shell following attributes will be analyzed of collected data:

The quality of technology

The speed of technology

The Accuracy

Security and consistency of the technology

For this, responses will be evaluated on Five Point scale as shown below:

*   1(a) 2(b)     3(c)         4(d)    5(e)

Very         Moderately           Neutral            Moderately             Very

Dissatisfied    dissatisfied                                   satisfied          satisfied 

*Evaluation Scale

An evaluation scale is designed to understand the level of satisfaction. The scale numbers from 1-5 is actually fragmentation of five levels of satisfaction. The collected data under each level will carefully be calculated in ratio as it is shown in equation as below:

1+ (a) +…. /5 *100; 2+ (b) +…. /5*100 …etc.

An end result will show the decree of satisfaction with the trialing period of RFID Tesco’s supply chain. Finally, the collected result under each service category will be sum up and will be divided of hundred then mathematical result will show the total ration of satisfaction with the technology.

Research Findings and Analysis

Conclusions/ Recommendations

****CONCLUSION

RFID implementation has been found to be highly successful when applied to internal operations and tracking of goods between trading partners. Cost is still seen as a barrier to item level deployment of the technology except on high value products in vertically integrated supply chains. The successful application of RFID tags in the Tesco at an item level is currently limited to specific ‘closed loop’ high value applications. An important promise of RFID technology is to cut costs and deliver a wealth of information that helps firms more effectively understand, predict, and respond to customer demand. RFID is not a solution. It is an enabler that allows firms to change their supply chain processes for the better. As mentioned before, RFID is not a new technology. However, the application of RFID technology to the supply chain is new. Early return on investment is however possible if investments are made in distribution and inventory management activities at pallet level. In this way, it is possible to avoid stock-outs, monitor transport and distribution centres, secure correct shipments and accelerate logistics operations. The abduction of RFID technology throughout their supply chains currently face a number of strategic and operational challenges and some wider social constraints, but the benefits claimed for the introduction of such technologies will have a major impact on retail structures and operations and on customer service experiences. The challenge for Tesco will be to exploit RFID in more creative ways in order to harness the marketing intelligence that this technology offers. Where Tesco can use RFID generated data to build segmentation models and analyse, and increasingly accurately predict, customer sales patterns and usage rates then this will provide a much richer picture of the customers than EPOS and scanning data systems currently offer. That said in many ways these impacts will accentuate long standing trends – for example, towards increasing concentration of ownership and spatial polarisation of provision, the growing power of retailers over suppliers within the supply chain, personalised marketing and customer service and ever more efficient inventory management – rather than effect truly transformational change.

RECOMMEDATION

Since Tesco have several regional offices, the use of RFID system can integrated the processes and increase synergy between offices. Sharing information can result to efficient dispatching of delivery trucks and management of inventory in terms of ease of upload. The limited floor area of the RDC can also be optimized by having control with the incoming and outgoing product lines. Flexibility of available pallets can alternate the advantages derive from a big space. There are also 5,000 product lines that are handled each month. With the use of RFID technology, this can be increased especially with better management of highly-maintained products such poultry, frozen and perishable goods. There would also be fewer requirements for additional devices such as temperature apparatus as tags can replace them. This can result to cost savings on physical assets and can be diverted to acquisition of tags.

The investment in pallet-compatible tags can be applied to the current bar-coded system through gradual adoption. Downsizing can eventually be effective because labour in handling inventory can be performed by the tags themselves with less actual monitoring on pallets. However, downsizing cannot abruptly perform and thus additional planning regarding the 20-employee RDC should be initiated. Expansion of the product lines can also be initiated because the floor space will acquire unsurpassable flexibility and control that can increase the ability to schedule and handle products. The cost of acquiring the RFID tags can be waived through cost savings, additional efficiency, leaner organization and strong future position in the 3PL sector.

Statement of Personal Development