Improving Supply Chain Traceability Using RFID Technology

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1 Said A. Elshayeb 1, Khalid Bin Hasnan 2 and Chua Yik Yen 3 1 UTHM, saidelshayeb@hotmail.com 2 UTHM, khalid@uthm.edu.my 3 UTHM, saidelshayeb@hotmail.com Abstract One of the major issues in the supply chain management is product loss or shrinkage. Radio-Frequency Identification (RFID) as an emerging technology has generated enormous amount of interest in the supply chain arena to reduce the phenomena. RFID technology has been used to provide a more efficient way to identify and track items at the various stages throughout the supply chain in large retail industry. This paper describes the proof of concept of real time traceability using RFID technology on LegoRobot simulation environment and LabVIEW developed interface that can be similarly implemented in Small and Medium Scale (SMI) industry. Key words: Supply Chain, RFID, SMI 22

2 1 INTRODUCTION Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers. Spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption Supply chain management is aimed to sustain long-term performance of individual companies and the overall supply chain by maximizing customer satisfaction with minimum costs. Achieving effective and efficient supply chain is not easy. One of the major issues in the supply chain management is product loss or shrinkage. In order to overcome this problem, a recent innovation that is seen as a likely alternative to barcodes is Radio Frequency Identification (RFID) (Taylor and Russell, 2009). RFID with its superior tracking and identification capability will be able to identify where losses are occurring and enable effective traceability. 2 RFID TECHNOLOGY RFID is a wireless communication technology that transfers information between tagged objects and readers without line of sight. RFID tags allow computers to automatically recognize and uniquely identify every object. (Jessen, 2005) RFID is suitable as a solution to manufacturers who consistently experience bottlenecks, desire traceability, or who wish to reduce the labor and operation cost. RFID can also be used to improve backroom inventory management, especially for companies that constantly face Out of Stock (OoS) problems. (Intermec, 2005) The evolution of technologies in supply chain started with fax, manual tracking, bar code system, fleet management system, warehouse management system, vendor management system, GPS, and recently RFID. Although RFID technology has existed for over 50 years in the military area, it is only in recent years that this technology has attracted a significant momentum, due to the convergence of lower cost and increased capabilities of RFID tags. The systems rely on fast and accurate data collection that was not always possible with traditional systems. RFID uses low-power radio signals to communicate with objects tagged with RFID transponders. This allows automatic transfer of information stored within the tags for numerous applications. Even though barcode usage has been distributed among all industries all over the world with high efficiency, it can only achieve 90% efficiencies in all their activities. RFID is a proven technology and promises to improve the effectiveness of traceability and the benefits of implementing RFID include (Chuang and Wade, 2005): 1. Provide traceability and real-time control to meet customer requirements. 2. Help to locate and remove dangerous products quickly and efficiently in the event of a recall. 3. Have the ability to be read without line-of-sight. 4. Can be read through a variety of substance such as ice, paint, crusted grime and other visually and environmentally challenging conditions. 5. Reduced human errors in logistics operations and more efficient inventory management between the factory and distribution centres- bullwhip effect. 6. Leveraging downstream data to improve forecast accuracy. 7. Automated receiving will allow retailers to receive and deploy merchandise more quickly, accurately, and inexpensively. RFID systems basically consist of a RFID device (transponder or tag), antenna, reader and host. Transponder or tag contains data about the item while antenna receives or transmits the RF signals between the reader and the RFID device. Tags are classified as passive, semi-passive or active. RFID technology has been well received in Malaysia and several leading edge applications have been implemented including the use of new RFID chipset in e-passport, MM-chip, ELID etc. (Ramli, 2005). The adoption of RFID is expected to increase at faster pace in near future. According to Sebastian (2008), from year 2003 to year 2013 the deployment of RFID will continue to increase consistently in future by time. 3 PROOF OF CONCEPT The system design methodology flow chart is shown in Figure 1. Figure 2 shows the architecture design of the supply chain traceability system using RFID technology. 23

3 3.1 Components of the System Building the traceability system involved the following software and hardware development Hardware This project was developed using Lego Mindstorm, RFID readers and tags. Lego Robot was used to simulate the transfer of products using tracks. The simulated system consisted of three stations, each station was positioned at locations as shown in Figure 3. There were three readers connected to computers in this system. Besides being a reader, one of the computers also functioned as a server where it was connected to all computers in the network using LAN. The database system that was developed in the project was installed in the server enabling it to collect and store the reading from all RFID readers. RFID-IDR-232 readers have been used with reading range 2cm as shown in figure 4. S TA R T B uilt transportation m odel usin g L E GO M indstorm D esign th e System R oute R FID tags detection using RFID reader LabVIEW P rogram the R C X using R O B OL A B M onitor all data at m ain com puter using L abv IE W Motion Verified C reate U ser Interface Y E S I ntergrating B oth System s Y E S System Verified System Verified Y E S E N D Figure 1: Project Flow Chart LAN HUB ` RFID Reader 2 Computer 2 RFID Reader 3 ` Computer 1 Server RFID Reader 1 Transporter Printer Figure 2: System Architecture Design 24

4 ` RFID TAG RFID READER MIDDLEWARE DATABASE Figure 3: System Layout Figure 4: RFID System Components Software There were three softwares involve in building the system, which were ROBOLAB, LabVIEW and Microsoft Excel. ROBOLAB was used to program the RCX to control the motion of the robot. LabVIEW was used to develop the user interface that could obtain data real-time from RFID readers and create a user interface. Database system was built using Microsoft Excel to record the RFID data that was sent from RFID readers. Figure 5 shows the GUI and sample report from Excel Figure 5: GUI and Sample Report 4 RESULT AND DISCUSSION Different situations can occur in supply chain, either the products reach the desired station or some products were lost before they reach the final station. In the issue of traceability two different situations are discussed separately. 1. All products passed all stations 2. Some products were lost at some station. The supply chain traceability system flow chart shown in Figure 6 describes the whole process flow of the system. The RFID system developed in this project visualized the application an internal supply chain where products need to undergo many processes before it can go into the market. The project proved that traceability of a supply chain can be improved by applying RFID technology into its operation. With this system, a product loss can be identified before the transporter arrives at the next destination. It enables product tracking in an easier way. Besides, the system demonstrated that manual scanning of product code would not be required since RFID tag can be read without line-of-sight. It saves time and labour cost since the whole system operates automatically. It also can be pictured as a logistic system where a customer can trace movement of the purchased products and identify the current location in real-time while the product is being delivered. 25

5 Figure 6: RFID System Flow Chart 26

6 5. CONCLUSION The system that was developed and tested proved that RFID technology can be used to improve traceability in supply chain at low cost. Due to its simplicity in interface program and database management system using LabVIEW and MS Excel the system can be more affordable and implemented even by small and medium scale industries. 6. REFERENCES [1] Chuang Ming Ling, Wade, H. S. (2005). How RFID Will Impact Supply Chain Networks. IEEE, [2] Intermec. (2005, July 1). "Beyond the Tag-Finding RFID Value in Manufacturing & Distribution Applications." White Paper, 1-7. [3] Jessen and Jessen (S) Pte Ltd. (2005). "Smart Mobile Solutions". Singapore: Trade brochure. [4] Ramli, A. R. (2005). RFID Country Readiness Survey: The Malaysian Study. Malaysian Communications and Multimedia Commission EPCglobal Malaysia EPC/RFID Conference. Kuala Lumpur, July MCMC: Kuala Lumpur. [5] Sebastian, R. (2008). Driving Value to the Next Generation Supply Chain through - What Next?. Frost & Sullivan. Supply Chain conference. Kuala Lumpur, 12 August 2008, GS1: Kuala Lumpur. [6] Taylor, B. W., Russell, R. S. (2009). "Operations Management: Creating Value Along the Supply Chain". 6th ed. United States of America: John Wiley and Sons, Inc. 27