Abhishek Sujay-0505-RFID Advantage in Logistics MGMT

RFID ADVANTAGE IN LOGISTICS MANAGEMENT
A STUDY ON RFID ADVANTAGE IN LOGISTICS

MANAGEMENT FOR RETAIL INDUSTRY
A DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF

THE REQUIREMENTS FOR THE AWARD OF MBA DEGREE OF
BANGALORE UNIVERSITY.
Submitted By
Mr. Abhishek Sujay .N.
Registration Number
05XQCM6005
Under the guidance of

Prof. Sumithra Sreenath
M P Birla Institute of Management
Bangalore
M.P.BIRLA INSTITUTE OF MANAGEMENT

ASSOCIATE BHARTIYA VIDYA BHAVAN.
BANGALORE-560001
2005-2007
M P BIRLA INSTITUTE OF MANAGEMENT 1

DECLARATION
I hereby declare that this dissertation entitled “A STUDY ON RFID

ADVANTAGE IN LOGISTICS MANAGEMENT FOR RETAIL INDUSTRY””
is the result of my own research work carried out under the guidance and
supervision of Prof.Sumithra Sreenath, M P Birla Institute of
Management Bangalore.
I also declare that this dissertation has not been submitted earlier to any
Institute/organization for the award of any degree or diploma.
Place: Bangalore
Date: Abhishek
Sujay.N.

PRINCIPAL’S CERTIFICATE
I hereby certify that this dissertation entitled “A STUDY ON RFID

ADVANTAGE IN LOGISTICS MANAGEMENT FOR RETAIL
INDUSTRY” is the result of research work carried out by Mr. Abhishek
sujay .N. under the guidance of Prof. Sumithra Sreenath, M P Birla
Institute of Management, Bangalore.
Place: Bangalore
Date: Dr N S Malavalli
Principal

GUIDE’S CERTIFICATE
I hereby certify that this dissertation entitled “A STUDY ON RFID

ADVANTAGE IN LOGISTICS MANAGEMENT FOR RETAIL
INDUSTRY” is an offshoot of the research work carried out by
Mr.Abhishek Sujay.N. under my guidance and supervision.
Place: Bangalore
Date: Prof. Sumithra Sreenath

ACKNOWLEDGEMENT
I would like to express my sincere gratitude to my research guide Prof.

Sumithra Sreenath, M. P. Birla Institute of Management, Bangalore for
her constant encouragement and guidance in the course of the research
investigation.
Further, I would also like to thank all the faculty members of MPBIM
who have helped me in completing my project. I have gained a lot of
knowledge throughout the course of carrying out this project.
I would like to sincerely thank all my friends and colleagues who have
helped me in completing this project by providing me with the academic
support.
Special thanks to the founders of GOOGLE, I really wonder how people

in early days used to do research projects. Finally, thankful to GOD for
obvious reasons.
ABHISHEK SUJAY
N
INDEX

SL.NO CONTENTS PAGE NO

1 Research Extract 1
2 Chapter 1: Introduction 3
3 Chapter 2: An overview of implementation of 6

RFID in retail stores for logistics management
4 Chapter 3: Profile of the Industry 13
5 Chapter 4: Profile of the respondents 35

6 Chapter 5: Literature survey 36
7 Chapter 6: Problem statement & Research 44
objectives
8 Chapter 7: Research design 45
9 Chapter 8: Research limitations 47
10 Chapter 9: Data analysis and inferences 48
11 Chapter 10: Summary of major findings of 55
research
12 Chapter 11: Recommendations 60
13 Chapter 12: Conclusion 61
14 Scope for further study 62
15 Bibliography 63

RESEARCH EXTRACT
“The future is far too important for the human species to be left
to fortune tellers using new versions of old crystal balls. It is time for the
oracle to move out and science to move in."
Radio Frequency Identification (RFID) is set to become the bedrock of

most supply chains over the next twenty years: however, at present it is
perceived to be an immature solution with significant barriers to overcome
before becoming a mainstream technology.
India’s organized retail is only 3 percent while 97 percent is
unorganized. India is the second largest growing economy in retail, after
China. Around 350 plus shopping malls are coming up in 2007 alone. As the
retail segment in India keeps growing exponentially, RFID and other retail
security products will play a more prominent role to control and combat retail
shrinkage.
Not being able to find tools and equipment when they are needed
costs more than inconvenience. Time spent searching for assets eats into
productivity, and hence profitability. Workers lose the equivalent of one full 40-
hour workweek per year if they spend only 10 minutes a day searching for
and gathering needed items. The inability to track equipment location, usage,
service, and maintenance causes companies to lose money on lease and
service agreements. Holding too many assets ties up capital, which every
business seeks to avoid. To improve competitiveness and profitability,
enterprises should manage assets with the same care and innovation they
have employed to drive excess inventory and costs out of their operations. A
good asset management program will improve return-on-assets (ROA) and
other metrics by helping to lower and control the enterprise cost structure.
Automatic identification and data collection (AIDC) technologies
and techniques that have proven their value in the supply chain are readily
adaptable to help optimize asset levels. Bar code and smart label technology
can make it simple and convenient to gather and manage asset information in
a timely and efficient manner. These technologies can record asset

movements automatically, and provide the data in real time to asset

management software applications. Computerized systems provide up-to-
date, accurate data that enables an organization to manage its assets with
information instead of physical inventory. The result is a lower overall asset
base, improved asset utilization, increased productivity and more efficient
purchasing and maintenance, which all contribute to bottom line improvement.
These outcomes provide a sustainable improvement in profitability without
burdening employees with excessive controls or reporting responsibilities.
Using RFID and logistics management strategies will serve to improve capital
utilization lower the total operational costs as well as improve the availability
of assets. The use of these asset management techniques has improved
customer retention significantly. This technique will help improve visibility of
assets in transit, availability management of much needed assets,
transportation management etc. these techniques have to be reviewed
periodically to ascertain if they have effected a significant change as also to
take necessary action where required.
This Research is an attempt to study the advantages and intricacies of

implementing RFID in logistics management for retail industry. The study aims
to find the strategic advantages that the companies will gain due the
implementation of RFID. The study also shows the various hurdles for
implementation of RFID. The study also helps organizations identify the
potential users for their RFID implementation and how they could further
leverage the implementation to achieve higher returns on investments and
ease of operation which ultimately lead to higher efficiency and better profits.

Chapter 1: Introduction
Mandated use of Radio Frequency for automatic Identification (RFID) of

goods at the pallet, case and item level continues to churn the Consumer
Product Goods (CPG), Logistics and Retail industry. The statement “Internet
of things” is slowly becoming true; with concerted efforts from standard setting
bodies such as EPC Global, ISO, FMCG consumer goods companies like
Gillette, P&G and major retailers like Wal-Mart, TESCO, and the US DoD, to
replace barcodes with RFID tags.
Barcodes are factual with the existing automatic identification

systems. At the same time, RFID promises a smooth and accurate capture of
data and organizations are looking forward to relieve the existing bottlenecks
with systems which enable end-to-end tracking and monitoring of goods.
The early acceptance of RFID realizes the need for a good “integration
fabric’” that can seamlessly allow data to flow from the devices (tags) through
the readers to the RFID middleware systems, and be utilized by the existing
or new applications to trigger meaningful transactions. The vision is to
combine the best of each into a smooth, tightly knit system, offering the end-
user more information in less time.
The Integration landscape that will evolve needs to address issues such as
device integration, data integration, presentation and management, ERP,
Warehouse Management Systems integration, work flow integration (with
partner systems) and concerns for security and privacy. The IT industry
comes into the picture while making data available through the artifacts on
integration – in turn providing data for better decisions and driving towards
quantifiable benefits of the investments.

A basic RFID system has three components:
FIG 1: RFID TAG

• The tag, an RF transponder programmed with information unique to the
object being tracked
• The reader, a transceiver that decodes the information stored on the tag
• An antenna on either the tag or the reader
Tags that contain internal batteries are “active” tags. Tags

activated by a power source in the reader are “passive.” Because RFID
technology uses radio waves rather than light, readers need not be close
enough to “see” tags. Nor is human intervention necessary, because tags are
read automatically. The more powerful the tag, the farther away the reader
can be placed. However, a more powerful tag is also a more expensive one.
Thus, RFID tags are usually attached to cases of pallets of lower-value goods,
such as razor blades or Army boots, and individually to high-value objects,
such as cars and military equipment. Tags can be tiny enough to identify the
family cat or large enough to label railroad cars. The larger the tag, the more
information it can store—such as when an object was moved, the
temperatures to which it was subjected, and how hard it was bumped.

How RFID works…
FIG 2 : RFID WORK CYCLE

Chapter 2: An overview of implementation of RFID in retail

stores for logistics management
FIG 3: RFID IMPLEMENTATION HURDLES MATRIX
The above matrix plots the different implantation hurdles depending on the
various factors such as the degree of importance on x-axis starting from low
to high , Then plotting the degree of difficulty for implementation on the y-axis
starting from less of a concern to significant concern.
This matrix clearly places the various hurdles accordingly and helps the
implementation company to analyze and take further steps accordingly.

INTEGRATION LAYERS
The success of RFID will depend a lot on the rollout plan of the
organization. The ideal way to do the same would be to divide the processes
and technologies into various layers to make the impact of adoption minimal.
We further take a look at these layers that make the integration complete.
DEVICE INTEGRATION
As organizations proceed to adapt themselves to the RFID technology, the
RF-enabled readers have to integrate with the existing auto-id technologies
for capturing the data. This drives the need for integration at the device level
that comprises devices-device integration, device computer integration and
data capturing technologies.
APPLICATION INTEGRATION
Application Integration is a part of the evolution of application delivery that
includes improved software componentization and the increasing acquisitions
of packaged software. In its simplest form, application integration is the
encapsulation of an existing application by software component that acts as a
functional interface to that application. The creation of an interface allows the
other applications in the portfolio to interoperate with the wrapped application,
increasing its value and long term usability. The existing applications, now, in
RF-enabled environment need to communicate in the EPC compatible
language. The data that is gathered at the middleware is converted to the
application compatible format and sent across to the legacy / enterprise
applications for further processing.
PROCESS INTEGRATION
Process integration tools provide a level of abstraction by letting users define
integration requirements through workflow and business process models. This
capability shields business analysts from the complexity of underlying
middleware. Using process modeling, business analysts focus on optimizing
processes and easily change or implement new processes with minimal
amount of coding. The models map the flow of business processes and
business rules across applications and people. When business processes

change, the changes are made at the model level and even the on-going
processes are updated. After the application level integration, the
organizations move onto process integration to combine and automate the
processes, thus optimizing the data flow. The drivers for process integration in
RF-enabled systems are:
• Existence of third-party process modeling tools
• Workflow modeling
• Process simulation
• Process-based task monitoring and management
• The need for runtime changes in processes.
BUSINESS INTEGRATION
The completely automated systems fall in place when the organizations inter-
operate on business transactions. This is possible by reducing the cost of
data ownership and reusing the information between vendors. Physical Mark
up Language (PML) plays a key role by enabling the business partners to
access the information about the object that is being read in RFID. Business
Integration depicts end-to-end business process flow across business units. It
ensures the management and reliability of processes on the path.
Organizations, with the help of business integration, are able to bridge the
application environments across composite applications, creating a networked
world.
PRESENTATION AND MANAGEMENT
While RFID automates the data capture and many of the business processes,
the simultaneous requirement is to monitor and manage the data that flows
from one process to another. This layer will help monitoring and managing the
data and view the state of the system at each level. It also can help in
generating various reports and analyze the information at various stages in
the entire value chain. The Graphical User Interface, if provided, can also help

in managing the information and providing a manual means of manipulating

the information, when required.
INTEGRATION CHALLENGES
The adoption of RFID, along with an ease of management invites a series of

challenges for early adopters. The challenges start right from integrating the
readers for identifying the data, to monitoring the data in the ERP and SCM
systems, to later manage this data. The most likely areas where challenges
can be foreseen are:
• INCOMPLETE PACKAGES AND INFLEXIBLE SOLUTIONS
Organizations having partial packages - supporting functionality in chunks

are likely to face a challenging stint with RFID. This is because of the fact
that lot of amendments may be required in order to leverage the
provisioning of RFID to the utmost.
• NEED TO INTEGRATE LEGACY
While RFID is being integrated, organizations would want to re-use their

existing systems. This will not only save cost and time, but also require
less amount of familiarization time for in-house users.
• NEED TO INCORPORATE NEW FUNCTIONS
Even while organizations are looking only at the identification aspect of

RFID, there are many areas where new functionalities would be required
to automate the existing systems. Vendors providing integration packages
would be expected to develop their products/solutions in a way that
integration in such scenarios can be achieved with minimal
customizations.

• DIVERSITY IN TECHNOLOGICAL STANDARDS
The ERPs and SCMs within organizations can be proprietary as well as

vendor provided. However, in any case, with each ERP having different
standards in the technology aspects, Integration challenges are likely to
soar up in this arena.
• INCOMPATIBILITY IN BUSINESS PROCESSES
The better you want, the tougher it is. Automation is to bring in series of
changes in the existing processes that may or may not be compatible with
each other. This puts up a challenge at the process integration level to
provide an oblivious means for optimized automation.
• COMPLEX TECHNOLOGY WITH HETEROGENEOUS PLATFORMS,

N-TIER DISTRIBUTED COMPUTING AND THE WEB
Distributed computing environments and the advent of Internet brought in

a concept of Interorganization business communication through loosely
coupled systems. Extensible Markup language (XML) is accepted as a
standard for such communications. The combination of Internet and XML
gave birth to Web Services, which support multi-language and multi-
platform systems. Integration aspects of RFID will cover a lot in this area
with processes being automated and organizations reducing their cost of
ownerships.

ROADMAP TO INTEGRATION
FIG 4: RFID INTEGRATION ROADMAP
While RFID is being promoted as an applied science to provide real-time

visibility of data pertaining to items, cases and pallets at all stages of the
automatic identification, organizations are researching continuously to
improvise their strategies for optimizing their efficiencies in terms of costs,
timely deliveries, consumer satisfactions and above all managing the
complicated business rules using this tool.
Figure illustrates the roadmap for integrating RFID with existing processes.
The permeation through these stages can give: integrity, accuracy, unified
view of business information, infrastructure optimization, technological
flexibility, and above all, integrated real time data visibility. With individual
technologies rapidly becoming generic or obsolete, integration plays a vital
role for a smooth running system. The requisite of an integrated platform
envisages an approach to product development and opens the door to
intelligent systems.
Radio Frequency Identification promises an era of ubiquitous computing. The
“Internet of Things” is being realized as the means of low cost of ownership
and a substance for real time monitoring.

RFID is moving forward with a thrust and, the need for Integration at various
stages with RFID becomes a crucial aspect for a smooth operation of the
system. What makes the integration aspect vital is the existence of diverse
applications in functional and technical aspects. Vendors across the
Information Technology spectrum are taking a plunge for providing solutions
that are extensible and robust to meet the challenging demands of every
vertical concentrating on RFID. And what is promised is a better management
of data and information for organizations, in turn, boosting efficiency and
optimization of the resources.

Chapter 3: Profile of the Industry
FIG 5: RFID IMPLEMENTATION USERS
India is being touted as the land of opportunity for logistics service providers
all over the world. The demand for logistics services in India has been largely
driven by the remarkable growth of the economy, projected to grow at 9-10
per cent in next few years. The Indian logistics market, valued at $14 billion a
couple of years ago, is expected to grow at a CAGR (compounded annual
growth rate) of 7-8 per cent. It is felt that the growth will continue, and might
even scale newer heights, as the economy is experiencing a retail boom with
Western companies such as Metro, Wal-Mart planning to start operation in
this country, and large local retailers such as Shoppers Stop, Pantaloon, RPG
and Big Bazaar planning to expand their operations in smaller cities.
But, then, logistics management in India too is complex, with millions and
millions retailers catering to the requirements of more than one billion people
and the infrastructure yet to develop to cater properly to a growing economy.
The poor condition of roads translates directly to higher vehicle turnover,

which in turn pushes up the operating costs and reduces efficiency. The
reduced efficiency is passed on the logistics service providers, with
transportation costs accounting for nearly 40 per cent of the total logistics

cost. The National Highways are being upgraded but these highways account
for a meager two per cent of the total road network in the country.
The Government of course is trying to execute a large number of road and

other infrastructure projects through PPP (public private partnerships)
initiatives to ease the pressure on the government coffers. However, the
experiences reveal that the PPP scheme, as it exists today, is not a foolproof
arrangement, with the several States complaining about its inadequacies.
There are other problems such as complex tax laws and insufficient
technological aids. The fragmented market increases costs due to huge
paperwork and the individual truck owners, dominating the market, are unable
to contract directly with customers, with the result freight consolidators and
brokers take a commission to generate business for the truck owners. Only
about a few thousand vehicles out of a total of several millions have tracking
system. The use of IT, thus, is limited.
Neglected modes
In India, the logistics costs are still higher than those in developed countries
an estimated 13-14 per cent of GDP compared to 8 per cent in the US. The
inventory costs are approximately 24 per cent of the logistics costs and the
order processing and administrative expenses account for another 10 per cent
or so. Warehouse management is often done manually, increasing
inefficiencies and adding to the cost.
A characteristic feature of the local express and logistics service providing

companies is that many players offer homogeneous services, with the result
there is near- commoditization of services where the demand is price
sensitive. The top-end of the market is controlled by a handful of
multinationals and large domestic players.
Despite these challenges, the country's logistics industry is set to grow.

Industries such as chemicals and pharmaceuticals, metals, FMCG, cement,
textiles and capping it all the retail segment have been identified as the top

contributors to the projected growth of the economy and therefore to logistics

revenues. The new generation corporates are looking to outsource non-
traditional logistics requirements such as reverse logistics, inventory
management, order processing, distribution, and labeling and packaging.
Radio Frequency Identification
61 companies intend to implement RFID. Ironically, the popularity of the

technology is not in the manufacturing or the FMCG segment as one would
expect. It is the services sector that's bitten. 7 percent of those who intend to
invest in RFID this fiscal already have fully operational implementations.
RFID as a technology has existed for over 30 years. The technology can
address tracking requirements of companies, and the mandate to put RFID
tags on products that get exported to giants such as Wal-Mart is spurring
interest in this technology.
An RFID standard is conspicuous by its absence and completed projects are

proprietary deployments in closed surroundings to track objects in storage. An
important factor that will contribute to exporters taking to RFID is that RFID
tags can be used to communicate information about a product to anyone in
the world over the Net.
According to Venture Development Corp. (VDC), the overall worldwide market

potential of RFID technology (including sales of tags, readers, software and
services) is expected to grow $4.7 billions in 2007 from $1.5 billions in 2004, a
compound annual growth rate of 45%. Market growth is broad based across
all industries with particular industries such as consumer, retail and life
sciences growing significantly faster than others

FIG 6: SECTOR-WISE ESTIMATES FOR RFID
RFID system implementations are expected to increase significantly in the

future due to several key factors that are driving growth and adoption:
Development of standards:
The new standards offer several performance benefits while ensuring global
readability throughout the supply chain. EPC global recently suggested that
HF become the global standard in item-level RFID applications, which should
help fuel adoption in the numerous markets such as tracking, consumer
goods and electronics. Companies such as Pfizer and the leading packager,
West Pharmaceutical Services, in the life sciences industry have already
begun implementing programs consistent with the proposed standards.
Reduction in product prices:
Given the improvements in chip design and manufacturing processes, certain

companies can now offer RFID solutions with compelling Return on
Investment (“ROI”) profiles. Companies have an active program to continue
lowering production costs as it ramps production, leverages purchasing of
components and optimizes manufacturing processes.

Maturity of RFID infrastructure products:
RFID companies can readily provide companies with a customized, turnkey

and fully integrated solution. A company designed and implemented and is
now integrating a complete solution for a global fashion retail company that
took 4 months and resulted in 99.95% read rates in a highly demanding end-
to-end supply chain and retail environment.
Strong endorsements from industry leaders and government
Many leading IT consulting firms such as Oracle, IBM, Accenture, Cap Gemini
and Siemens, along with companies such as Wal-Mart, Boeing-Airbus and
DHL have significant RFID initiatives underway. For example, Wal-Mart and
Metro have mandated that suppliers be RFID compliant by the end of 2005.
In government, the US Department of Defense (DOD) is requiring RFID
compliance by suppliers by the end of 2005 and the US Food and Drug
Administration (FDA) is recommending RFID usage by all pharmaceutical
companies on a unit level basis by 2007.
RFID markets cover two broadly different areas of application:
Pallet & Case Tracking:
Pallet and case tracking involves tagging bulk packaged items (i.e. a
box of goods, not the individual units of sale), usually at the manufacturing
source. The implementation of pallet and case RFID tracking is anticipated to
bring further efficiencies in the supply chain, from packaging, through shipping
and distribution, and into the back-end of the retail store or final distribution
point. Benefits are expected to arise from improved control, reduced touch
and reduced diversion. Pallet and case tracking is largely being driven by the
mandate of several large retailers such as Wal-Mart in the US and Tesco in
Europe, as well as by the US DoD. As noted above, UHF is the preferred
solution as it allows for longer read ranges.

Item-level tracking:
Individual items are tagged at the manufacturing place, in a warehouse, or by

the operator of a closed loop system such as a library. Tags are read in bulk,
often through a container (box, bag, etc.), along a process line or in the supply
chain, and without a line of sight. Performance demand is very high (above
99.95% read rate in bulk), which presents significant technological barriers for
many competitors. Implementation is being driven by both value
considerations as well as by mandates from government agencies and
customers. Benefits are shared between the retailer, the wholesaler, the
manufacturer, and other participants in the supply chain
How Will RFID Affect the Apparel and Retail Supply Chain Industry?
RFID is expected to provide huge advantages to manufacturers by offering

the tools to better plan production and respond more quickly to market
demand. It will facilitate automation of inventory counts and speed shipping
and receiving at the distribution level. For retailers, it will help to reduce stock-
outs, enable product tracking and potentially reduce theft and streamline the
POS function. RFID will also open other merchandising opportunities and help
with the overall consumer buying experience. Due to the current cost of the
technology (both tags and infrastructure), the initial phase of adoption for most
retailers is at carton and pallet marking applications. The current technology
being adopted for carton and pallet labeling is passive UHF tags (850 MHz –
950 MHz). As the cost of tags and readers comes down, a wider adoption at
the item marking level is developing.

Open Loop versus Closed Loop Applications
Among the many applications for RFID technology, the solutions can be either
closed loop or open loop. In a closed loop application, the user has complete
control of the items to be tracked throughout the application. There is no need
to share data outside the user organization and users outside the organization
do not need to be able to read the RFID tags. In this case the chosen protocol
does not need to necessarily comply with an open standard. For many RFID
applications, the tagged items must be readable by many companies such as
manufacturers, logistics hubs, and retailers. In this case, it is essential to have
open loop standards for the tag protocol as well as the data being stored to
the tag.
The Electronic Product Code (EPC)
FIG 7: DESCRIPTION OF EPC

The EPC is a 96-bit number made up of a header and 3 sets of data. There
are several iterations of the EPC, depending upon the specific application. An
example of a typical EPC code is shown below. The header identifies the EPC
version number – which identifies the type of EPC data to follow (for example
SSCC versus GTIN). The second part of the number identifies the EPC
manager – typically this would be the manufacturer of the item the EPC is
attached to. The third part is called object class and refers to the exact type of
product– most often the stock-keeping unit (SKU). The fourth series of
numbers is the serial number that is unique to the item. (The second and third
sets of data are similar in function to the numbers in UPC barcodes.)
A 96-bit EPC will allow sufficient capacity for 268 million companies. Each
manufacturer will have the ability to create up to 16 million object classes with

68 billion serial numbers in each class. This should provide sufficient capacity
to cover all products manufactured in the world for many years to come.
ELECTRONIC PRODUCT CODE TYPE 1
Potential issues that need consideration when choosing the type of
RFID and method for application:
Although RFID technology promises great improvements in supply chain

visibility, it is important to embrace the technology with a bit of caution. The
following are some of the issues that require close scrutiny when investigating
RFID:
Tag Cost – This should not to be confused with chip cost. Although the goal
is to bring the cost of the tag (chip and antenna) down to 5 cents, this goal is
in the future since it both assumes manufacturing breakthroughs and is
predicated on consumption in the billions of tags per year. Today, the cost is
closer to "less than 20 cents" for a read/write solution in high (millions)
volume. Ultimate tag cost will also be very much dependent on the type of
chip required (read only versus read/write), size of the antenna needed and
how it is packaged to meet a specific application.
Tag Size – Tag size is dependent on the read range desired. Although the
chips are very tiny, they will not operate without being mounted to an antenna.
In general, the size of the antenna will determine the read distance
performance of the tag so understanding the size of the antenna needed for
the application is more important than the size of the chip alone. RFID
antenna design is becoming very specialized so that there are antennas being
designed to deal with specific applications such as the presence of liquid or
metal. An end user should be sure to work with a reputable supplier who will
help them determine the best antenna design for the application.
Infrastructure Cost – Much focus appears to be placed on the tag cost since
it is a recurring expenditure. Reader cost and infrastructure costs for
implementing RFID must also be looked at very closely as well. Both the

software systems requirements and physical environment, in which RFID is

intended to be used, are critical to the ultimate performance of a system and
may require changes to accommodate using it effectively. As an example,
RFID chips cannot be read through metal objects. Other forms of
electromagnetic interference may also impede performance of the technology
and require changes to the physical environment where RFID will be used.
The number and types of readers will also be a major expenditure depending
on the application.
Read Distances – Read distances for RFID are very much dependent on the
frequency chosen for the application. Tag orientation also affects the read
range as the range diminishes as the tag is rotated from being perpendicular
to the path to the reader. Reading reliability is quite good when labels are
alone in a reader field like cases on a conveyor line, but less certain when the
labels are randomly oriented as with labeled cases on a skid. The antenna
size (both on the tag and the readers) will also be a determining factor. Hand
held readers are not capable of using as much power as stationary readers
and as a result provide shorter read distances.
Government Regulation – Governments around the world regulate the use

of the frequency spectrum. Different countries have already assigned certain
parts of the spectrum for other uses and as a result, there is virtually no part
of the spectrum that is available everywhere in the world for use by RFID.
This means that a RFID tag may not work in all countries. As an example if
you choose the Ultra High Frequency (UHF) frequency that operates at
915MHz in the U.S. and you ship your product to Europe, they may not be
able to read it as well since Europe operates in the UHF spectrum at 869 MHz
and with lower power. This is an important consideration when operating in a
global environment.
Anti-Collision – This is an important feature of RFID chips/readers since it

will allow multiple tags to be read while grouped in one reader field. It is not
available on all RFID tags but is an important feature if you are planning to

use RFID for inventory counts, shipping and receiving where multiple tags
need to be read at the same time.
Privacy Issues – Consumer groups have expressed concern over the

potential (real or imagined) privacy invasion that might result with widespread
RFID item marking. These groups are pushing for legislation that will require
manufacturers to advise consumers that the products contain RFID devices
and must provide a means so that the devices can be disabled at point of
purchase. These issues are most prevalent at the item marking level and will
have little impact on the implementation of carton and pallet labeling.
RETAIL SECTOR IN INDIA
On a weekday, the DLF Mega Mall -- located in the IT and ITES hub of
Gurgaon on the outskirts of Delhi -- bears a deserted look. Of the few
operating shops in this large mall, most have nary a customer. The same
goes for several other retail outlets and many of the other malls in the vicinity.
True, a retail chain like Future Group's Big Bazaar may be clocking heady
sales (growing at 100% year-on-year), but the dozen-odd shops operating in
its proximity wear a deserted look, giving a somewhat hollow ring to the much-
talked-about retail boom in the country.
In what seems like a quirk of circumstance, malls have sprung up all over
urban India in anticipation of a consumption boom that may itself prove to be
eventually truant.
Move to Mulund (West), a suburban locality of India's financial nerve, Mumbai.

Rajesh Parashar, a resident of the area has the option of shopping at Big
Bazaar, Apna Bazaar, Subhiksha, Spinach, Shoprite, Foodland or at the local
Sai Supermarket, all of which are within a two-kilometre radius of his
residence
This is paralleled by the developments happening in the Delhi suburb of

Ghaziabad, where the upcoming Shipra Mall at Indirapuram already has Big

Bazaar operating out of its lower-ground floor, while Reliance is slated to open
shop on the third floor. Customer footfalls, however, are more in the
projections of the occupiers of the mall than real.
All this retail activity, and more, and the sheer gargantuan size of the
investments planned, beg the question -- does the consumer's wallet have
enough money in it for everyone?
"Only time will tell," is KPMG's executive director, Deepankar Sanwalka's

laconic answer. To a great extent the success or the failure of malls will hinge
on the consumer population of the area. "If the spending power of consumers
is high in a locality, it could sustain two-to-three large players." Not so,
elsewhere, he adds poignantly.
The significance of these remarks sinks in gradually. With planned

investments of $22 billion over the next five years -- excluding what might be
brought in by new global and large local players henceforth -- the retail sector
is expected to grow 40% to $427 billion by 2011.
Organised retail, which is 3% of the whole currently, is in turn pegged to grow

to $64 billion by 2015. And one consequence of all those investments will be
the fact that India's present two square-feet per capita retailing space will rise
15-20% by 2010.
To be viable, the huge investments made in the sector by India Inc would
have to be responded to by a corresponding massive surge in footfalls. And
for that to happen, a lot of links would have to fall in place.
Between the drawing board and the emerging market realities, the realisation
dawns that a lot of things can go wrong with India's much-heralded retail
revolution. The more visible among these loose ends: vexingly high real
estate prices, the loosely-knit distribution networks in India's hinterland, the
near-absence of any modern supply chain logistics, shortage of skilled
personnel, and a regulatory system that resembles a patchy quilt more than
anything else.

Then there is the nature of the business itself. Retailing is a low-margin, high-
volume, commodity business where profitability gets strained as competition
intensifies. And if wrong choices are made regarding the location or the
formatting of the store, woe betide the retailer. The catches are many and to
make it big, a retailer would have to negotiate all the tricky turns most of the
time.
The big players are sanguine, however. "There is enough room for six-to-eight
players," says Reliance group chairman Mukesh Ambani, who recently kicked
off the first Reliance Fresh outlet in Hyderabad. There are reasons for his
optimism: the country's preponderantly young working population, disposable
incomes that are expected to increase at an average 8.5% per annum till
2015, and a steadily climbing per capita income (from $460 in 2002, it rose to
$620 in 2005).
In fact, it is the expectation of a large working and earning population that has
attracted most global retailers to the country. But most analysts are agreed
that the Indian retail market could at best support 10 large players with
revenues in excess of $2 billion each by 2015.
Given the number of players getting into the fray today, this clearly means a
winnowing out of the weaker retail players. What's more, that time could be
sooner rather than later, maybe just three or four years down the line.
That's not so surprising, industry insiders even say, pointing out that a large
number of the new entrants may not be committed to retailing in the long
term. While some almost certainly are looking to act as silent partners for
foreign players, others may be more willing to look at an exit option a few
years down the line. Says Hemant Kalbag, principal, AT Kearney: "I see
consolidation happening in the next five years. That's when the shakeout will
happen and the successful retailers will look acquiring less profitable ones."
But that's still in the future. As of now, the retail turf is set for some frenetic
activity. Reliance has drawn up a Rs 25,000-crore (Rs 250 billion) retail plan
that would see its outlets dotting 784 cities and small towns by 2010.

Already it has 17 stores in Hyderabad alone (the number will go up to 40 by

end of the above period). More recently, Sunil Bharti Mittal made news when
he announced an alliance with the world's biggest retail chain Wal-Mart, for a
supply chain and cash-and-carry venture, besides a franchise agreement for
retail.
Seen as a coup of sorts, this could exert pressure on other retailers in the
country to explore similar collaborative opportunities.
Laying the Pipeline
Between them the likes of Reliance, the AV Birla Group, the Tatas, the
Godrejs, the Bhartis, the Mahindras, the ITC Group and the Wadias -- and a
horde of others -- will be sinking in close to Rs 1 lakh crore (Rs 1 trillion) in the
business of retail over the next five years.
In their crosshairs, are a host of retail-related activities such as cold chains,

retail supply logistics, warehousing, sourcing and merchandising
management. All of which are seen as absolutely essential if the front-end
retail business is to take off on a meaningful scale across the country.
The players have hit the ground running. Reliance is hiring overseas talent to
beef up its management capabilities -- it has roped in Peter Bracher from
Asda Wal-Mart as special adviser for Reliance Fresh stores and Kevin Pleass
from Tesco, UK, to help with store design and construction -- even as the AV
Birla group is on a talent hunt ahead of its Rs 15,000-crore (Rs q50 billion)
retail rollouts.
Retail icon Kishore Biyani is also stepping on the gas -- he has announced
plans to roll out 225 Big Bazaar stores and hundreds of other outlets in other
formats in the next four years.
The Tata group too earlier this year expanded its footprint (beyond the
formats rolled out by group company Trent of Westside fame) by entering the
durables segment, in a tie-up with Australian retailer Woolworths, with the
launch of its Croma store.

"We plan to have a national presence with 30 stores by March 2008 and
double it to 60 by March 2009, with a capital of Rs 400 crore (Rs 4 billion),"
says RK Krishna Kumar, Director, Tata Sons, who is spearheading Tata's
retail venture.
He adds that the company zeroed in on the segment given the findings of an
internal study, which revealed that only 0.5% of Indians own air conditioners,
just 1% own computers, 3.5% washing machines and 11.7% telephones.
Other players like the Dubai-based Landmark group, with its Lifestyle and
Max branded outlets, are also keen to expand into the grocery segment.
Reports indicate the company is in talks for a tie-up with Carrefour. Then
there are players like the K Raheja group's Shopper's Stop and the Rajan
Raheja-controlled Globus that are expanding their reach in the apparel and
accessories segments. Others like ITC (a big player in its own right), the
Godrej group, Century Textiles and Raymond as well as mid-size players like
Vishal Megamart, Subhiksha and Sabka Bazaar are busy increasing their
footprint.
Taking a cue from the global leaders (whose eyes are also on India), India
Inc's retailers are thinking big. Reliance Retail, for instance, has chalked out a
plan to roll out about 5,500 stores of all kinds in 800 cities, 85 logistics centres
and 1,600 farm supply hubs. AV Birla Group is looking at pumping in Rs
15,000-20,000 crore (Rs 150-200 billion) -- with an initial investment of Rs
5,000 crore (Rs 50 billion) in the next few years.
Similarly, Bharti is expected to invest Rs 6,000 crore (Rs 60 billion) in the

initial phase. Biyani's Pantaloon is not far behind. The group plans to increase
its total retail space to 30 million sq ft from the current 3.2 million sq ft; and
take its turnover to Rs 2,500 crore (Rs 25 billion) by June 2010.
By global scales, the numbers are not out of the ordinary. The Bentonville,
Arkansas, based Wal-Mart -- the big brother of retailers -- operates 6,640
stores and wholesale clubs in 14 countries, while its counterpart in Europe (it
is based out of UK) Tesco runs 2,600 across 13 countries.

The others have chains of comparable sizes and reach. To keep their stores
stocked with their myriad products, the global retailers have sophisticated
procurement strategies in place that hinge on sourcing products globally
based on prices, quality and timely delivery.
Not to mention deployment of cutting-edge technologies that enable real-time

inventory tracking and ordering mechanisms. "Tesco, for instance, can sell
jeans for 2 as bulk buying can help it source the same from its global
suppliers at far less than this," says KPMG's Sanwalka. Thus, globally, retail is
a business involving massive scales and deep pockets.
Climbing the Greased Pole
Moving up the evolutionary ladder won't be easy for India's retailers.

Especially given the large number of potential spoilers. Availability of quality
retail space will be a key determinant for the growth of the sector. With most
Indian cities undergoing rapid urbanisation, spiralling rental costs has most
retailers worried already.
Hitherto, most retailers have preferred to go in for long-term leases. But with
real estate prices in most top tier cities hitting the roof in the past two years,
lease rental increases are making business unviable for organised retail.
According to PricewaterhouseCoopers (PwC), the current average lease

rentals across some of the top cities range from Rs 88 per sq feet per month
to as high as Rs 120 per sq ft per month. On an average, lease rentals
account for 7-8% of the revenue and 40-45% of the non-material cost for
retailers. Unless these prices stabilise, most retail businesses could end up
taking much longer than originally planned to break even.
Not surprisingly then, within hours of making his deal with Wal-Mart public,
Sunil Mittal, the chairman of Bharti Group, said his top priority would be real
estate acquisition, whether through leasing or buying.
To that end, the newly-formed combine is roping in DLF, Emaar, MGF and
Ansals to act as partners and developers. Such an arrangement could prove

to be a win-win solution: while it will ensure quick roll-outs and lower capex, it
could also improve asset utilisation of the developments. At the other end,
players like Reliance could set up hypermarkets in their own SEZs to meet the
needs of local residents.
Another way out of this problem, as some astute retailers have found out, is to
become an anchor tenant. According to PwC estimates, an anchor tenant
typically commands a discount of 30-45% on lease rentals and is responsible
for attracting footfalls into a mall.
Retail biggies like Pantaloon Retail, Shopper's Stop and McDonald's have
been quick to endorse this strategy. For instance, Pantaloon has signed up
with 100 of the 300-odd malls that will be developed over the next three years.
This, points out PwC, will enable the retailer to leverage its first-mover
advantage on a pan-India basis.
Pantaloon Retail currently has 3.2 million sq ft spread across several formats
and is expected to have 10 million sq ft of space in the country by 2010.
Again, in Tier-II cities, where lease rentals are 40-50% lower than those in top
tier cities, Pantaloon has been quick to establish its presence.
The retailer's real estate fund, Kshitij 1, which has a corpus of $80 million at
its disposal, is understood to have invested in projects in cities like
Ahmedabad, Baroda and Surat. Pantaloon expects to have nearly 400,000 sq
ft of retail space in these destinations by 2008.
The other determinant of success here is the location -- if the outlet is not
easily accessible by a large section of consumers due to distance or other
issues, viability could come in question.
Here the neighbourhood format has an edge. Sanwalka of KPMG is of the

view that smaller stores of 1,500-2,500 square feet (as against 150,000
square feet hypermarkets) in neighbourhoods might do better in India. The
verdict is still out on that one, and we won't know till one fails.

Adds KPMG's associate director Kaushika Madhavan, "All new entrants are
planning rapid expansion and such a scale of ramp-up requires scalable
processes and systems, which retailers are yet to develop. So we would
witness mistakes being made as Indian retail evolves. Ability to learn from
mistakes will be a critical success factor." And here deep pockets will help.
While Biyani already has a successful retail model in place and Bharti will look
to cut corners with some help from Wal-Mart, players like Reliance and the AV
Birla group would have to go through a longer learning curve.
Grapevine has it that soon after the Bharti-Wal-Mart MoU, Reliance Retail's A-
team went into a huddle to discuss its response. The fact that the world's
biggest retailer will be pitted against them has not been lost on them: now,
Reliance has to worry about Wal-Mart's strength in the make-or-break area of
supply-chain management.
This will no doubt be factored into the retailer's own mammoth Rs 6,000-crore
drive to set up its own logistics, complete with its own airstrips and a fleet of
transport aircraft dedicated to airlifting supplies to key markets.
Indeed, the key imperative facing retailers in India is that of creating robust,
scalable supply chains that would facilitate their rapid spread across the
country. "India is a fragmented country and an absence of a strong
infrastructure and logistics system makes it all the more challenging to reach
consumers," says NV Sivakumar of PwC.
A vital logistical link in most retailers' plans happens to be the cold chain. And
many of them like Reliance Retail and Future Group are reported to be
investing Rs 6,000 crore and Rs 400-500 crore (Rs 4-5 billion), respectively,
on setting up logistics.
Another big player in the segment will be the Bharti Group. Overhauling this
part of the supply chain will be key to the success of any retail venture in food
and groceries segment. Currently in India, the wastage levels for perishables

are as high as 40% because of a large number of intermediaries as well as

loss during transportation as well as through lack of storage.
Says KPMG's Madhavan: "The fact is that most retailers in India still don't
have a stronghold on operations -- be it merchandising, supply chain
management or procurement."
Clearly, while the players can build on the experiences of industry leaders in
other markets while developing their supply chain, the Indian market may
require them to improvise frequently.
Foreign retailers have shown that managing operations innovatively can

provide a significant competitive advantage to retailers. Wal-Mart, for
instance, leverages IT to track supply chain processes like cross-docking very
effectively. Similarly, Tesco requires lean production techniques of its
suppliers and has high-reliability delivery systems in place such as 'milk-runs'.
Most analysts agree that retailers would have put in place global operational
metrics.
One way to measure efficient operations is the inventory turns ratio. A

comparison of the US and India is revealing. Where, in the US, the retail
sector has an average inventory turns ratio of about 18 (some retailers like 7-
Eleven score over 50), most Indian retailers range between four and 10, says
KPMG.
The other key metric -- stock availability -- is telling too: Where global retailers
achieve more than 95% availability of all stock-keeping units on the retail
shelves, their Indian counterparts cut a rather poor figure at 5-15%.
There are other areas that retailers would have to master -- such as reaping
economies in procurement and transportation, bulk storage, trend forecasting
to minimise inventory levels -- before they can truly claim to have arrived.
Early entrants such as Shopper's Stop and RPG Group are acutely aware of
this truth: both took years to bring their supply-chain models to the present

efficiency levels. Even a player like the Dubai-based Landmark Group --

which has been operating in India for eight years now -- insists it still needs to
bring their ERP solution system up to speed.
Others may face new, unexpected problems. Scalability is what the likes of
Kabir Lumba, Executive Director, Lifestyle International, is banking on for
growth. The group, which currently runs 12 stores, plans to open 45 more
stores at a cost of Rs 450 crore (Rs 4.50 billion) over three years. Lifestyle's
stores attract 40,000 customers every day, and are projected to close fiscal
2006-07 with a sales turnover of Rs 500 crore.
Again, when it comes to technology adoption and usage, there's a yawning

gap between the Indian retailers and those in the West.
According to a recent survey conducted among the country's top retailers by

KPMG, while retailers like Wal-Mart and Metro have started using RFID
technology (offering high inventory visibility), retailers in India are still to take
to bar coding. As systems grow in size and complexity, retailers would have
set aside increasing amounts as IT spend.
The challenge posed by the global retailers is clearly formidable. But local
retailers' more intimate understanding of their customer base will help them
survive.
Besides, even the world's largest retailers have slipped when it comes to the
emerging markets -- Wal-Mart was forced to rework its model in Mexico and a
similar thing happened to Carrefour in China, where it had to revise its
strategy. Also, Wal-Mart's track record in markets such as South Korea and
Germany has been nothing to write home about.
The other big issue for retailers is people. Analysts agree that the manpower
shortage will get acute as retail spreads beyond the metros. Says Sanjiv
Goenka, Chairman, RPG Group: "The biggest challenge for us and, for that
matter, any retailer will be getting trained personnel."

The Manufacturing Angle
With Wal-Mart's advent in the US, the relationship of manufacturers with

consumers was drastically altered in the latter's favour. While the results in
the case of India's retailers may not be necessarily as dramatic, some major
changes would definitely be in order.
Strategic sourcing tie-ups between retailer and manufacturer will be the main
drivers in this respect. A few weeks after Reliance rolled out its retail plan, one
of the first things it did was to negotiate with leading FMCG companies,
including Dabur India and Nestle India, for a direct retail account for the
products they sold at its outlets. Earlier this year, Pantaloon did a similar
exercise and sought 5% higher margins for products sold at its Big Bazaar
and Food Bazaar outlets.
Says Atul Joshi, head of the no-frills chain Subhiksha's northern operations:
"For an FMCG manufacturer, the cost of dealing with us (modern retail) is
negligible. We were the first direct retail account with HLL about seven years
ago." The no-frills chain assures 8-10% discount to consumers on all products
it stocks.
While retailers like Reliance, Pantaloon or Subhiksha may be bringing a

change, the fact is that ordering or sourcing by retailers is still tactical than
strategic, points out a KPMG study. Not many retailers have long-term
agreements with suppliers.
Also, traditionally retailers have played a passive role in this relationship. In

contrast, Wal-Mart actively partners with manufacturers who supply it
products to ensure that consumers are offered prices at the lowest prices
possible. In fact, it was precisely the retailer's legendary aggression in
bargaining that partly drove the massive wave of restructuring of the US
industry.

Indian retailers have their work cut out in this regard, but it is far from clear
whether they would be able to emulate this dimension of Wal-Mart's success
story.
More likely, the retail chains coming up will be less combative in their
approach towards manufacturers. "We will have to have a collaborative
approach. But the threat from retail to packaged goods industry will prompt
companies to invest a lot in R&D," says Adi Godrej, chairman, Godrej
Industries.
The statement's import is not lost -- private labels have a big potential as
promotional costs are low for retailers and the margins fat (as much as 60%
against 35% for others). Also, these non-branded products can be offered at
far lower price points, generating volume sales.
Getting It Right
Organised retailers in India are trying out a variety of formats, ranging from
discount stores to supermarket to hypermarkets to specialty chains. However,
of late, most players appear to be gravitating towards the hypermarket format.
Retailers ranging from Pantaloon to RPG to Piramals or the Tatas are working
towards exploiting this model, perceived by consumers as more value-
enhancing. But in the long run, what is most likely to succeed is a more
balanced multi-format strategy.
This helps retailers adapt to the very different shopping patterns that can exist
within the country and even within regions. Here again, merely copying global
trends will not help. In a research conducted by KPMG International in
developed markets, it was found that single-format players generated higher
shareholder value than multi-format ones.
Some feel a combination of cash-and-carry and neighbourhood stores, as in a

hub-and-spokes model can be a good bet. Says one retail analyst, nascent
markets like India need a lot of room for experimentation on part of the

retailers. Ergo, there are no cut-and-dried solutions when it comes to fixing on

the right retail format.
Finally, while in the first flush of the retail boom, the elimination of traditional
intermediaries may bring windfall gains (as well as bring welcome and much-
needed relief to the producers), this source will increasingly dry out as
competition intensifies and margins come under pressure a few years down
the line.
What would set the survivors apart from those who are forced to sell out (or
go belly-up) will be differentiators like location, value-added services
(convenience), private labels and customer loyalty programmes, other than
price. The last, a result of retailer-manufacturer tie-ups, state-of-the-art supply
chain infrastructure, global sourcing and scale will be a key factor. And, if
experience in other markets is anything to go by, an uncanny ability to read
shifting trends.

Chapter 4: Profile of the respondents
The profile of respondents for this research project covers 10 leading IT

companies, providing RFID implementation solutions in India which
represents the whole of India geographically. Namely….
• TESCO HSC
• HEWLETT PACKARD
• MOTOROLA
• TATA CONSULTANCY SERVICES
• MINDTREE CONSULTING
• WIPRO
• INFOSYS
• COGNIZANT TECHNOLOGIES
• SATYAM COMPUTERS
• PATNI COMPUTERS
All the respondents of these 10 companies are the key persons who are
actively involved in either design or implementation of RFID solutions for
major retailers in India and across the world.

Chapter 5: Literature survey
Pantaloon’s experiment with RFID
Much has been written about Radio Frequency Identification (RFID) and what
it can do for manufacturers—improve production operations, asset utilization,
forecasting, inventory accuracy and customer satisfaction by pinpointing the
location and status of products as they move through the manufacturing and
retail value chain. Taking a cue from this, Pantaloon Retail (India) has piloted
an RFID project at one its warehouses in Tarapur using 1,000 RFID tags. The
company is starting from where it matters the most by implementing the
technology at the warehouse.
Says Chinar Deshpande, CIO of Pantaloon, “We want to use IT as a strategic

tool to differentiate ourselves in the market with new initiatives such as the
RFID project. While a SAP implementation is currently underway, the RFID
initiative was more to do with improving the efficiency of the entire supply
chain, and we wanted to be the first to execute it. We want to automate the
entire supply chain from suppliers to warehouses and stores, and make it
transparent.”
Problems faced
The company began to focus more on IT to bring in more transparency in its

customer relationships and to streamline its supply chain. Says Deshpande,
“Whenever we procure merchandise, the entire process had to undergo two to
three steps before it reached outlets.”
At each step, human intervention was required and barcode readers were
installed at merchandising locations. Traceability and visibility of goods in the
supply chain, lack of a unique identity at each item level, and human
intervention leading to errors were some of the issues faced by the company.
Further, these challenges led to a lack of co-ordination with the backend at
the stores, hampering the company’s production planning and inventory
management.

Simplicity wins the day
Pantaloon went in for RFID for its simplicity of tagging, efficacy

of use, product buffering, ability to keep track of over-produced
items, and ability to monitor product-line lead time at the
warehouse and fast-moving product-lines. The company
selected a few lines of apparel, primarily shirts and trousers,
Chinar for its RFID pilot. The RFID application developed by Wipro
Deshpande
Infotech was tailored to the overall solution in line with
CIO Pantaloon
Pantaloon’s business processes and IT landscape (from the
factory outward to the warehouse inward and from the warehouse outward) in
order to capture real-time data. The application is integrated with Oracle
database 10g and middleware along with an implementation of the RFID
hardware. It integrates with the existing IT infrastructure, the in-house
developed Retail Enterprise Manager. The main objective was to smoothen
the entire product lifecycle, introduce item-level tagging for identification, and
track the entire RFID roadmap with Pantaloon. The piloting was also to do an
RFID feasibility study for additional uses.
At the factory outlet, RFID tags were attached to the merchandise and the
data written to them. When the RFID-tagged merchandise comes through the
inward gate, all related information such as purchase and delivery orders will
be fed in the inward terminals in real-time. After correlating the requirements
of specific outlets with the merchandise in the warehouse, the items allocated
for different outlets will be transported. The tags are removed once the RFID-
tagged goods pass through the outward terminal.
Getting to grips
There were a few hiccups related to integrating the RFID application with
Pantaloon’s legacy IT infrastructure. Since it was meant to be a pilot project,
the limitation was that only 1,000 tags were available. Initially, the application
was supposed to be only for home-made product lines. As the tagging offers
simplicity in goods tracking, re-allocation of manpower became an issue. The
inward numbers of a product had not to exceed 500 finished products on a

particular day in the warehouse. The selected product line had to be one that
had a constant movement and was not seasonal. Additionally, there were
operational challenges. Since RFID is a new concept, making factory workers
understand it posed a challenge. Handling of RFID tags was an issue
because the tags needed to be attached to items and data written to them.
Warehouse workers lacked an understanding of the need to pass material
through the RFID reader. Removal and return of RFID tags at the factory was
also difficult. Uploading files, and managing applications and devices, were
not easy through the new application. The RFID evaluation was done in
October 2004, and it took four months to implement the pilot project. The pilot
was implemented at a cost of Rs 30 lakh, which included the hardware cost (a
writer, 2 tag readers and 1,000 tags) and the cost of system integration.
Efficiency and accuracy
Although with a few hiccups, Pantaloon has enjoyed certain benefits.

“Recording of data became smooth at the inward and outward terminals,
which helped us save time and gain accuracy. Earlier, the possibility of
scanning incorrect goods was much higher,” affirms Deshpande. Before the
implementation, each item used to be scanned through the barcode recorder.
After the RFID implementation, the time saved on the same is about 80
percent in inward warehouse processing and 12 percent in outward. Real-time
visibility of items during all stages of the supply chain improved to 98 percent.
Pantaloon now aims to extend the application to production routing and

scheduling, product recall and returns, and real-time data for category
managers for effective forecasting. “We expect that the RFID application will
further help us to improve the shopping experience, store layout and any
inventory situation. Going forward, we see the use of RFID technology to
improve collaboration across our supply chain right up to the point of sale,”
remarks Deshpande.

Wal-Mart Begins RFID Process Changes
Feb. 1, 2005—Wal-Mart has begun rolling out the first applications

and process changes based on radio frequency identification data at the
original seven Wal-Mart stores in Texas that were outfitted with RFID readers.
The aim of the applications is to reduce out-of-stocks by providing visibility
into the location of goods with RFID tags.
"They've been live for [three] weeks now," Simon Langford, Wal-Mart's
manager of global RFID strategy, says of the applications in the seven stores.
"We'll roll them out to the other 140 RFID-enabled stores in February."
At each of the 104 Wal-Mart stores and 36 Sam's

Clubs, the company has installed RFID readers at the
receiving docks at the back of the building, near the trash
compactors and between the back room and the retail floor.
For the cases of goods that are shipped to the stores with
RFID tags, Wal-Mart records their arrival by reading the tag on
Simon each case and then reads the tags again before the cases are
Langford brought out to the sales floor.
By using sales data from its existing point-of-sales system, which is
not using RFID, Wal-Mart subtracts the number of cases of a particular item
that are sold to customers from the number of cases brought out to the sales
floor. Based on that information, software monitors which items will soon be
depleted from the shelves and automatically generates a list of items that
need to be picked from the back room in order to replenish the store shelves.
"By reading the tags on the cases that are brought out from the back
room, we're able to see what items have actually been replenished," says
Langford, instead of relying on people to record on a handheld computer what
has been picked in the back room. Wal-Mart has developed a handheld RFID
reader that acts like a kind of Geiger counter, beeping when an associate gets
close to the item he or she needs to pick. That reduces the amount of time
spent in the back room. The plan is to provide the handheld devices to

associates in the original seven stores and then deploy them at the rest of the
140 stores during the course of the year. The retailer is also sharing data
from all its RFID read points with its suppliers through Wal-Mart's Retail Link
extranet. When a case is brought out to the sales floor, the system records
that it's being put out on the shelves. When the case is read at the trash
compactor, the status within the system is changed to "on shelf." Suppliers
can get updates on the location of their goods within 30 minutes of the goods’
movement from one part of the store to another. Despite recent reports that
Wal-Mart's RFID deployment is behind schedule, Langford indicates that the
retailer is on track. Ninety-four suppliers shipped tagged product to Wal-Mart
as of Jan. 31, and more are expected to begin shipping tag pallets and cases
in February.
Wal-Mart plans to RFID-enable 600 Wal-Mart and Sam's Club stores and 12
distribution centers by the end of the year. In June 2004, the retailer met with
its "next 200" suppliers to discuss how they will use the technology, beginning
in January 2006. The company will carry out tagging reviews with them this
coming spring. Langford says that these suppliers will not be asked to tag
cases and pallets shipped to all 12 DCs and 600 stores at the start of next
year but instead to the three DCs and 140 stores that currently RFID-enabled.
"If a supplier wants to ship to all 600 stores, we won't hold

them back," Langford says. "Some are eager to move quickly. The perception
of RFID is changing. Certainly, the next 200 suppliers have more support and
are probably more educated and are in better shape that the first 100, who
were the trailblazers. The technology companies, integrators and consultants
have learned a lot and are in a better position to help the next 200 suppliers."
Langford says he's very pleased with the 98 percent read rate Wal-Mart
has been achieving as goods arrive at the store receiving docks and as they
are brought out to the retail floor. It's too early to say what impact RFID is
having on product availability for the tagged cases, but Langford says, "The
really exciting thing is we're starting to work more efficiently already.

RFID AT PATNI COMPUTERS
Dilip Dhanuka, Vice-President and Head, Products and Technology Group,

Patni, tells ABOUT that Patni's RFID team engaged `Romeo and Juliet'
devices to track livestock.
How big is the RFID market and how is Patni targeting it?
In 2004, the RFID market was $1.49 billion and it is expected to reach $6
billion by 2007. Through automatic identification, RFID opens the doors to a
gamut of applications. Patni's SmartVISION for RFID adoption offers solutions
in verticals such as manufacturing, pharmaceuticals, retail, aerospace and
defence, healthcare, product engineering and software vendor solutions.
Our customers leverage our product to gauge the impact of RFID, measure
returns, evaluate the technology and deploy it in an end-to-end manner. We
also partner with organisations looking to deploy radio frequency
identification.
Our team provides solutions not only on RFID, but also on converging it with
other applications areas such as sensors and mobility, which we believe will
be the future.

On the application of RFID in the context of mad cow disease...
The outbreak of mad cow and foot and mouth diseases have cost the US and
Europe livestock industry billions of dollars. India too was hit by the recent
outbreak of avian influenza. To provide reassurance on the safety of human
food, the unique identification of all animals intended for human consumption
has become very important. Patni has developed an RFID-based solution for
the traceability of meat from the farm to the plate. This solution was used
successfully during the mad cow scare in the US.
First of all, all animals in a farm were tagged with unique electronic-IDs, which
served as the unique identification purpose.
There is a hand-held device (Romeo), which can be used by the farmer to

capture the animal data in his farm. Using the Radio Frequency `read' feature
of the hand-held device, one can read the electronic-tag of a particular animal
and can register data for that animal - such as date of birth, breed specifics,
health records, treatment modes, etc. At regular intervals, the hand-held
device is docked on another desktop device (Juliet) for data synchronisation.
All new/modified data from Romeo is transferred to Juliet, and Juliet will
synchronise its data with a central server. The central server consists of
animal data from all farms across the country. Thus, from any part of the
country one can view animal data on the central server.
When animals move from one farm to another, or from farm to abattoir, data
such as the date of movement, vehicle-information carrying this animal batch,
etc, is recorded. At the abattoir, the RFID is converted to barcode
identification and put on the meat package, providing complete traceability of
the meat from the farm to the plate.
RFID experts suggest a solution that can allow the health department to
monitor the health of the flock and the flow of products from any part of the
country. Health officials can get alerts in real time, allowing for tracking of all
meat, from the livestock stage to the final frozen food stage, and can trace
irregularities at any point of time.

Traceability has a host of applications. Where do you see it being

deployed?
Based on the costs, standards, and technology maturity, RFID can deliver
quick, reasonable return on investment (ROI) mainly in closed-loop
applications, such as manufacturing process control, especially for
configurable, high-value products such as automobile engines and bodies and
parts, and mobile asset management for assets such as trailers, containers,
pallets, and trolleys. It can also be used in security and access control and
distribution management of high-value items.
As standards evolve and the technology matures, RFID will start playing a key
role in open-loop applications too, in helping reduce costs and increasing
efficiencies. These include the complete distribution chain, right from the
manufacturing warehouse to the retail shelf. And in counterfeit prevention, by
creating a trail of product movement history with defined and recorded
handovers.
As RFID continues to evolve...
RFID is an evolving domain. Hardware quality is bound to undergo

improvisation and the cost of tags and readers is likely to come down over a
period of time. In short, RFID hardware is going to get better and cheaper.
Areas such as systems integration, process engineering and automation play
a very crucial role in deploying RFID and are also very complex.
Organisations should ensure that they provide equal attention to these areas
as ultimately it is the `Systems' and `Processes' that are impacted by RFID
application.

Chapter 6: Problem statement & Research objectives
PROBLEM STATEMENT
“To study about advantages and implementation intricacies of RFID

in logistics management for retail industry”, is the problem statement of
this research project.
RESEARCH OBJECTIVES
The ultimate aim of carrying out this research project is to answer the
following research objectives which eventually give solutions to the project
problem statement.
• Which strategies and best practices will lead to success in the RFID
market?
• How can RFID technology help organizations improve their Logistics
management?
• What are the challenges in implementing RFID and how can they be
overcome?
• Who are the RFID leading vendors?

Chapter 7: Research design
Delphi may be characterized as a method for structuring a group

communication process so that the process is effective in allowing a group of
individuals, as a whole, to deal with a complex problem. To accomplish this
"structured communication" there is provided: some feedback of individual
contributions of information and knowledge; some assessment of the group
judgment or view; some opportunity for individuals to revise views; and some
degree of anonymity for the individual responses, As we will discover, there
are many different views on what are the "proper," "appropriate," "best,"
and/or "useful" procedures for accomplishing the various specific aspects of
Delphi.
It is not, however, the explicit nature of the application which
determines the appropriateness of utilizing Delphi; rather, it is the particular
circumstances surrounding the necessarily associated group communication
process: "Who is it that should communicate about the problem, what
alternative mechanisms are available for that communication, and what can
we expect to obtain with these alternatives?" When these questions are
addressed, one can then decide if Delphi is the desirable choice. Usually, one
or more of the following properties of the application leads to the need for
employing Delphi:
• The problem does not lend itself to precise analytical techniques but
cart benefit from subjective judgments on a collective basis
• The individuals needed to contribute to the examination of a broad or
complex problem have no history of adequate communication and may
represent diverse backgrounds with respect to experience or expertise
• More individuals are needed than can effectively interact in a face-to-
face exchange
• Time and cost make frequent group meetings infeasible
• The efficiency of face-to-face meetings can be increased by a
supplemental group communication process

• Disagreements among individuals are so severe or politically

unpalatable that the communication process must be refereed and/or
anonymity assured
• The heterogeneity of the participants must be preserved to assure
validity of the results, i.e., avoidance of domination by quantity or by
strength of personality ("bandwagon effect")
Those who seek to utilize Delphi usually recognize a need to structure a
group communication process in order to obtain a useful result for their
objective. Underlying this is a deeper question: "Is it possible, via structured
communications, to create any sort of collective human intelligence
capability?" This is an issue associated with the utility of Delphi that has not
as yet received the attention it deserves.
Characteristics of the Delphi
Usually Delphi undergoes four distinct phases. The first phase is

characterized by exploration of the subject under discussion, wherein each
individual contributes additional information he feels is pertinent to the issue.
The second phase involves the process of reaching an understanding of how
the group views the issue (i.e., where the members agree or disagree and
what they mean by relative terms such as importance, desirability, or
feasibility). if there is significant disagreement, then that disagreement is
explored in the third phase to bring out the underlying reasons for the
differences and possibly to evaluate them. The last phase, a final evaluation,
occurs when all previously gathered information has been initially analyzed
and the evaluations have been fed back for consideration.

Chapter 8: Research limitations
• Research investigation is restricted to selected key personnel of the

organization. This may at times be their personal view as opposed to
the view of the company as a whole.
• As the perception level of the respondents has not been tested, it is
assumed that all of them have perceived the questions in the correct
way.
• The ever changing world with rapid change in technology may actually
be able to cause the present research study obsolete any time faster
but it’s the way the world we live in..!
Despite of the limitations, maximum care was exercised to make the study
scientific & meaningful.

Chapter 9: Data analysis and inferences
The purpose of the Delphi technique is to elicit information and

judgments from participants to facilitate problem-solving, planning, and
decision-making. It does so without physically assembling the contributors.
Instead, information is exchanged via mail, FAX, or email. This technique is
designed to take advantage of participants’ creativity as well as the facilitating
effects of group involvement and interaction. It is structured to capitalize on
the merits of group problem-solving and minimize the liabilities of group
problem-solving.
The Delphi technique requires a Coordinator to organize requests

for information, information received, and to be responsible for communication
with the participants.
The Delphi technique requires an efficient communication channel to
link the Coordinator with each of the participants. We have used email which
can decrease the time required for completing a Delphi technique.
Nevertheless, the Coordinator’s job took substantial time.
Process
1. Identify the issue and solicit ideas.

Prepare and send the first questionnaire, which asks each participant to
engage in individual brainstorming so as to generate as many ideas as
possible for dealing with the issue.
2. Response to first questionnaire.

Each participant lists his/her ideas (Questionnaire #1) in a brief, concise
manner and returns the list anonymously to the Coordinator. These ideas
need not be fully developed. In fact, it is preferable to have each idea
expressed in one brief sentence or phrase. No attempt should be made to
evaluate or justify these ideas at this point in time.

3. Create and send Questionnaire #2.

The Coordinator prepares and sends a second questionnaire to
participants that contains all of the ideas sent in response to the first
questionnaire and provides space for participants to refine each idea, to
comment on each idea’s strengths and weaknesses for addressing the issue,
and to identify new ideas.
4. Response to second questionnaire.

Participants anonymously record their responses to Questionnaire #2
and return them to the Coordinator.
5. Create and send Questionnaire #3.

The Coordinator creates and sends a third questionnaire that summarizes
the input from the previous step and asks for additional clarifications,
strengths, weaknesses, and new ideas.
6. Continuation of the process.

If desired, the Coordinator performs iterations of the preceding process
until it becomes clear that no new ideas are emerging and that all strengths,
weakness, and opinions have been identified.
7. Resolution. Resolution may occur in one of two ways.

If dominant, highly evaluated ideas emerge via consensus, the
exercise is declared finished. The end product is a list of ideas with their
concomitant strengths and weaknesses.
The Coordinator conducts a formal assessment of the group’s opinions of

the merits of the ideas. There are a number of ways to conduct a formal
evaluation. In one method, the Coordinator prepares a questionnaire that lists
all the ideas and asks participants to rate each one on a scale. For example, a
7-point scale could be used that ranges from 0 (no potential for dealing with
the issue) through 7 (very high potential for dealing with the issue). If this

approach is used, participants send the rating forms to the Coordinator, who
compiles the results and rank-orders the ideas based on the evaluations.
A second approach for evaluating the ideas is that which is used in the
Nominal Group Technique for “voting.” With this approach, the Coordinator
asks each member to identify the top five ideas and assign five points to the
most promising idea, 4 points to the next most promising, and 3, 2, and 1
points to the third, fourth, and fifth-best ideas. These votes are returned to the
Coordinator, who tallies the results and prepares a report. The report notes
the rank order of the ideas based on the total number of points received and
indicates the number of people who voted for each idea.
QUESTIONNAIRE #1
The purpose of this questionnaire is to elicit your ideas regarding the following
issue:
What are the advantages and implementation intricacies of RFID in

logistics management for retail industry?
Please engage in individual brainstorming so as to generate as many

ideas as possible for dealing with this issue. Please list each idea in a brief,
concise manner and email your response to me. Your ideas need not be fully
developed. In fact, it is preferable to have each idea expressed in one brief
sentence or phrase. No attempt should be made to evaluate or justify these
ideas at this point in time. Your ideas will be anonymously included in the next
questionnaire.
Idea #1:
Idea #2:
Idea #3:
Idea #4:
Idea #5:
Idea #6:
Idea #7:
Idea #8:

Idea #9:
Idea #10:
QUESTIONNAIRE #2
The purpose of this questionnaire is to report all of the ideas sent in response
to the first questionnaire and to solicit new ideas for dealing with the issue:
What action could be taken to successfully implement RFID in logistics

management of retail companies?
Please refine ideas already received by clarifying them where desired and by
listing the strengths and weaknesses you associate with each. Please list any
new ideas at the bottom of the questionnaire and comment on each new
idea’s strengths and weaknesses for addressing the issue. Your ideas will be
anonymously included in the next questionnaire.
Idea #1. .................................

• Your clarification (if any):
• Strengths:
• Weaknesses:
Idea #2. .................................
• Strengths:
• Weaknesses:
Idea #3. .................................
• Strengths:
• Weaknesses:
Idea #4. .................................
• Strengths:
• Weaknesses:
.
.

BALLOT
The purpose of this ballot is to solicit votes for the five ideas that best deal
with the issue:

The following are all of the ideas that have been submitted by participants.
Please identify the top five ideas and assign five points to the most promising
idea, 4 points to the next most promising, and 3, 2, and 1 points to the third,
fourth, and fifth-best ideas. Vote for only five ideas. Your ideas will be
anonymously included in the next questionnaire.
Idea #1: .................
I would give this idea (0, 1, 2, 3, 4, 5) points.
Idea #2: .................
Idea #3: .................
Idea #4: .................
Idea #5: .................

VOTING RESULTS
The following reports the results of votes cast for ideas submitted on the
issue:

Please note the rank order of the ideas based on the total number of points
received.
Also indicated are the number of people who voted for each idea.
Idea #6 received 22 points. 5 people voted for this idea.
.
.RATING SHEET
The purpose of this questionnaire is to report strengths, weaknesses, and
clarification of all ideas submitted in response to the third questionnaire for
dealing with the issue:

Please assess the merits of all ideas listed below using a scale that ranges
from 0 (no potential for dealing with the issue) through 7 (very high potential
for dealing with the issue). Please email your evaluation to me. After all rating
forms have been returned, I will compile the information, rank-order the ideas
based on the evaluations, and send you the results. Your ideas will be
anonymously included in the next report.
Idea #1: .....................................
This idea has (0,1,2,3,4,5,6,7) potential for dealing with the issue.
Idea #2: .....................................

Idea #3: .....................................

Idea #4: .....................................
Idea #5: .....................................
.
RESULTS
The following reports the results of points that participants assigned to the
ideas submitted on the issue:

Please note the rank order of the ideas based on the total number of points
received.
Idea #4 received 66 points, for an average rating of 3.3
.

Chapter 10: Summary of major findings of research
Four Elements for successful RFID implementation
1. Establish clear objectives
First and foremost you should tackle your RFID project based on a clear set
of objectives. Whether you are complying with a retailer mandate or deploying
RFID to meet asset tracking needs you must define your desired outcomes.
This creates a framework for your decision making. Trade off decisions will
certainly arise in your process design, software selection, RFID hardware and
solution scope. A clear set of objectives helps keep your team focused on
what is most important and separate "must have" from "nice to have" scope
elements.
2. Get the physics right
The first point of success and therefore the first point of failure in any RFID
system is tag and reader communication. If the reader cannot communicate
with the tag, your RFID system will not work properly no matter how elegant
your software and processes. Tags must be able to successfully transmit data
to the readers for the RFID solution to work properly. However, the
effectiveness of tag/reader communication is governed by RF physics. While
most implementers will employ trial and error by waving a tag and asking "can
you see it now," this invariably leads to poorly performing systems.
One should employ a scientific approach to tag selection and reader

optimization in order to maximize your read performance over time. Utilize a
lab with licensing and extensive RFID testing and field implementation
experience to ensure proper equipment selection and deployment
specifications.

3. Get the process right
If anyone suggests that you can implement an RFID solution without

modifying your processes, you can be sure they are not experienced
implementers. If you are not tagging product today, then you surely need to
add processes to apply and verify tags and most likely to track movement of
goods or assets.
One should first base his process design on meeting their business
objectives. The next step is to modify the new processes where appropriate to
increase the read performance. Yes. Process can help improve your read
performance. It is one of the variables you have at your disposal to ensure
your RFID system can meet your objectives. One may also want to adjust
their process to account for constraints of the RFID middleware to reduce
implementation, time, complexity and cost. RFID technology ultimately should
support the business objectives and processes and not the other way around.
4. Get the systems right
Users need to interoperate with their RFID software. Devices and enterprise
systems need to integrate with the RFID software. The biggest delay in most
RFID implementations can be attributed to RFID software configuration and
integration. Once you have determined the hardware needs and configuration
specifications your RFID infrastructure should not be a bottleneck as long as
you employ an experienced implementation team. However, from a systems
standpoint, every RFID implementation is somewhat unique. RFID
middleware also happens to be the least mature component of any RFID
solution stack.
End users should take great care designing their RFID systems architecture
and selecting RFID middleware. No one RFID middleware vendor can meet
all client needs well, so trade offs are an inevitable part of finding a good fit for
your needs. As a testament to the variability of end user requirements, ODIN
technologies has worked on RFID implementations with six different RFID
middleware solutions, none of which could have worked well across all of the
solutions. It is worth extra time to make sure that the RFID middleware you

choose can meet your platform, workflow, rules, user interface, device
support, data management and integration requirements.
FIG 8: TIMETABLE FOR RFID DATA INTEGRATION
The main advantages of RFID implementation in logistics management

are:
• Keep track when stock is running low on shelves or when items have
been stolen
• The movement of inventory can be tracked,
• Goods can be received and shipped faster,
• Ease of predicting product demand,
• Shoppers can save time,
• Shoppers get a better deal as system becomes more efficient,
• The right products are available at the right stores at the right time,
Ultimately, giving the organization competitive advantage over its rivals and
chance to serve the customers more efficiently.

The major hurdles associated with implementation of RFID technology

are:
• No RFID standard has been set yet. The Auto-ID center has worked
with standard bodies Uniform Code Council and EAN International to
come up with electronic product code, but it is not yet considered a
standard.
• The smart tag technology is yet to be perfected , today on an average
20% of the tags do not function properly
• Physical limitations like reading through liquid or metals still exist
• Accurate read rates on some items can be very low
• Increase in expenses - the suppliers will have to equip their
warehouses and transport vehicles with readers. These readers have
to be connected to the computer networks for exchange of information.
All these mean additional costs related to hiring technical consultants
and additional hardware.
• Inventory networks are burdened with the task of handling data of
billions of their products. The company has to hence invest in
extremely sophisticated system to process the data properly.

Some of the major vendors of RFID technology.
Large enterprise application vendors

Microsoft
Oracle
Infrastructure vendors
IBM
Sun Microsystems
Integration vendors
WebMethods
Tibco
Ascential Software
Teradata
DataMirror
Database software vendors

Sybase
ObjectStore
Supply chain software vendors

SAP
Manugistics
Manhattan Associates
Descartes
ClickCommerce
Red Prarie
Chip vendors
Intel
Texas Instruments

Chapter 11: Recommendations
• RFID will become critical to most supply chains within the next 10-20
years with the market conservatively projected to be worth $15 billion
by 2010.
• Despite spending $35 billion on supply chain software major retail
companies had more than $2 trillion of inventory sat idle at the end of
2005.
• RFID tags need to reach the five-cent-per-chip price point, which is
considered to be the threshold where RFID will really take off.
• Consumer privacy fears could be allayed by the recycling and re-use of
RFID tags. However this could make RFID a less powerful means of
data collection than frequent flyer schemes, loyalty cards, bank cards,
and mobile phone bills.
• Integration is the biggest concern for RFID buyers, and as a result
customers tend to rely on trusted traditional technology partners rather
than approaching niche specialists.

Chapter 12: Conclusion
RFID offers a first mover advantage to companies as moving early in this

space will influence the standards and evolution to suit their needs better. The
rest of them can wait and watch and perish while RFID implementation
pioneers can ride the wave of operational excellence.
RFID technology is being touted as one of the high potential technologies

over the horizon that holds immense value for various businesses. It will
become the invisible link between the physical world and the information
network.
In terms of technological enhancement, RFID has certainly come a long way

from identifying friendly allied planes for Britain in World War II to tracking fast
moving consumer goods in the supply chain in the present scenario. But the
process of evolution for commercial suitability is still continuing with revision in
standards for tags, reader, air interface and data handling by the hour. This
phenomenon coupled with the lack of relevant RFID expertise in industry
poses risk to all the multiple factors ranging from understanding of business
need, technological requirement and the like. To mitigate these risks, an
organization should seek assistance from an organization which has
knowledge of the business process in that vertical, RFID technology and its
limitations and has experience in developing custom applications so that the
data generated by RFID infrastructure is utilized to provide maximum benefits
to the organization.
“Can anybody remember when the times were not hard and
money not scarce?”………..

Scope for further study
• Will profitability eventually decrease if the status quo is maintained?

• Will the company lose a potential competitive advantage?
• Will the company eventually lack sufficient accurate information about
its processes or inventory to effectively manage its business?
• Will customers' perception of the company suffer?
• Will the company be able to catch up once competitors implement
RFID?
• Will existing inefficiencies become unmanageable as the pace of
business continues to increase?
• Will RFID enhance your company's ability to serve its customers?
Improved customer service and customer loyalty are sometimes
difficult to quantify. Sometimes it is easier to look at the negative side
to understand the value of customer service. In other words:
• What is the cost of losing a customer to a competitor that offers better
service?

Bibliography
• Retail biz – magazine

• The Economist - magazine
• Hindu business line –newspaper
• Business standard – newspaper
• Economic times – newspaper
• AC Nielsen RFID trends & insight report
Company reports and white papers of

• Tata consultancy services
• Hewlett Packard
• Patni computers
• IBM
• Manhattan associates
• Cognizant technology
• TESCO
• METRO
• www.wikipedia.com
• www.google.com
• www.network magazine.com
• www.express computer.com
• www.ac-corporation .com
• www.tutorial-reports.com
• www.walmart.com
• www.ficci.com
• www.rfidjournal.com
• www.aimglobal.org

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RFID ADVANTAGE IN LOGISTICS MANAGEMENT

A STUDY ON RFID ADVANTAGE IN LOGISTICS

A DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF

Under the guidance of

M.P.BIRLA INSTITUTE OF MANAGEMENT

M P BIRLA INSTITUTE OF MANAGEMENT 1

I hereby declare that this dissertation entitled “A STUDY ON RFID

M P BIRLA INSTITUTE OF MANAGEMENT 2

I hereby certify that this dissertation entitled “A STUDY ON RFID

M P BIRLA INSTITUTE OF MANAGEMENT 3

I hereby certify that this dissertation entitled “A STUDY ON RFID

M P BIRLA INSTITUTE OF MANAGEMENT 4

I would like to express my sincere gratitude to my research guide Prof.

Special thanks to the founders of GOOGLE, I really wonder how people

M P BIRLA INSTITUTE OF MANAGEMENT 5

SL.NO CONTENTS PAGE NO

3 Chapter 2: An overview of implementation of 6

4 Chapter 3: Profile of the Industry 13

5 Chapter 4: Profile of the respondents 35

13 Chapter 12: Conclusion 61

14 Scope for further study 62

M P BIRLA INSTITUTE OF MANAGEMENT 6

Radio Frequency Identification (RFID) is set to become the bedrock of

M P BIRLA INSTITUTE OF MANAGEMENT 7

movements automatically, and provide the data in real time to asset

This Research is an attempt to study the advantages and intricacies of

M P BIRLA INSTITUTE OF MANAGEMENT 8

Mandated use of Radio Frequency for automatic Identification (RFID) of

Barcodes are factual with the existing automatic identification

M P BIRLA INSTITUTE OF MANAGEMENT 9

A basic RFID system has three components:

FIG 1: RFID TAG

Tags that contain internal batteries are “active” tags. Tags

M P BIRLA INSTITUTE OF MANAGEMENT 10

How RFID works…

FIG 2 : RFID WORK CYCLE

M P BIRLA INSTITUTE OF MANAGEMENT 11

Chapter 2: An overview of implementation of RFID in retail

FIG 3: RFID IMPLEMENTATION HURDLES MATRIX

M P BIRLA INSTITUTE OF MANAGEMENT 12

M P BIRLA INSTITUTE OF MANAGEMENT 13

PRESENTATION AND MANAGEMENT

M P BIRLA INSTITUTE OF MANAGEMENT 14

in managing the information and providing a manual means of manipulating

The adoption of RFID, along with an ease of management invites a series of

• INCOMPLETE PACKAGES AND INFLEXIBLE SOLUTIONS

Organizations having partial packages - supporting functionality in chunks

• NEED TO INTEGRATE LEGACY

While RFID is being integrated, organizations would want to re-use their

• NEED TO INCORPORATE NEW FUNCTIONS

Even while organizations are looking only at the identification aspect of

M P BIRLA INSTITUTE OF MANAGEMENT 15

• DIVERSITY IN TECHNOLOGICAL STANDARDS

The ERPs and SCMs within organizations can be proprietary as well as

• INCOMPATIBILITY IN BUSINESS PROCESSES

• COMPLEX TECHNOLOGY WITH HETEROGENEOUS PLATFORMS,

Distributed computing environments and the advent of Internet brought in

M P BIRLA INSTITUTE OF MANAGEMENT 16

FIG 4: RFID INTEGRATION ROADMAP

While RFID is being promoted as an applied science to provide real-time

M P BIRLA INSTITUTE OF MANAGEMENT 17

M P BIRLA INSTITUTE OF MANAGEMENT 18