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LONDON SCHOOL OF COMMERCE UNIVERSITY OF WALES INSTITUTE CARDIFF MASTER FOUNDATION PROGRAM FEB 2006 ASSIGNMENT IN INFORMATION ANALYSIS ALI OZAN PEKINER 174JCJCWCF06 TABLE OF CONTENTS Introduction A) Supply Chain 1) Evolution of Business Enterprise 2) Supply Chain Management B) Radio Frequency Identification System 1) Mechanism of RFID Technology 2) Advantages of RFID Systems 3) Disadvantages of RFID Systems Recommendations References Bibliography 1 2 2 2 4 4 5 6 7 9 10 Introduction Until 1960s and 70s, a typical company owned all the activities related to the production, from acquisitions of raw materials -even it had owned mines or heavy industries to supply themselves- to conversion of these materials into finished goods. The same firm was delivering the final product directly to the consumer. With the increasing globalisation and advance in information technologies, businesses have faced the change and have been trying to adapt to these new conditions of the marketplace by changing their organisations and implementing new and approved technologies. Because of the increasing competition and need to efficiency, millennium companies are looking for more flexible structures and low costs. Rather than staying in fully vertical integration model, they are reducing their extra-weight by different strategies, like outsourcing, mergers and acquisitions, dot.com companies, etc. They focus their motivation to their core competencies and specialities, and leave the rest to their trade partners in supply chains. Today, businesses are operating globally integrated with each other. Supply chains have replaced old structures of supplying materials or components, and have extended their limits to after-production activities, like distribution, stocking and storing. As they cover all activities from supplying raw materials to delivering final products to consumer, the supply chain systems became the object of cost-cutting activities. Companies are trying to build fast, accurate and error free chains to decrease their costs and relatively their prices, which is a strategic factor in competition with others. Radio frequency identification systems (RFID) ...read more.


The type of communication that allows this exchange between the tag and the reader is called "backscatter". Because the wave sent by the reader hits the RFID tag, and the tag then scatters back a wave at a different frequency with the chip's information11. As to the tag, it is made of a chip which stores a series of numbers and responds the signals transmitted by the reader, and an antenna which enables the chip to receive power and to communicate. There are two types of tags. The first one is active tags, which own their battery to communicate. These tags are larger, faster and can store more information in their chip, but their lifetime is limited. The other type of tag is passive tags. They communicate when they are in the close presence of a reader's electromagnetic field. Those are most commonly used tags, because they are cheap, small and have unlimited lifetime. The two RFID technologies are not competitive, but complementary in their ability to be customized for specific uses12. Active RFID tags contain not only a battery to broadcast over greater distances, but a memory for product information and the ability to call managers without being asked. 2) Advantages of RFID Systems Tracking products by RFID system offers business insights into their inventory, which enables companies to control costs and reduce investments on inventory, which means lower prices and better competition13. Thanks to this technology, companies know how much inventory is still in the warehouse, how much is on its way to distribution centres and stores, how much is currently on the shelves or sold to customers. They can also measure product consumption, and see buying trends by this information. A radio frequency identification system has several attributes which lead to make savings on time, costs or errors14. The first attribute is serialised data. Every object in the supply chain has a unique identifier or serial number. ...read more.


This traction will finally serve to fight against loss and theft in the warehouse. In our distribution activity, RFID technology will enable us to track the product. It will tell us whether if it left the warehouse, if it is in a truck on its way to distribution centre, or if it has already been delivered to retailer. We can also scan the contents of a container ship which goes to another continent, with the help of a global positioning system connected to our RFIS system. This will give us the visibility and the capacity to take sudden decisions and make appropriate changes in real-time. Finally, this technology is going to procure us the opportunity to track our products in our retailers' inventory and sales places. We can see in real-time changes in quantity of our products on shelves, buying trends and consumer motivations. The traction with RFID also allows maximum security in stores against theft. After experiencing the results of RFID technology in the post-production part of our supply chain, we can analyse and consider its potential impact in the procurement and production part of our supply chain. It is certain that implementation of this technology will increase the efficiency and the effectiveness of our supply chain. Besides saving time and allowing higher throughputs, RFID will also enable to increase the quality of our production process. Each material and component will have its own tag, with a unique serial number, containing information about the product. This will allow us to define the source of any problems. But on the other side, as we are producing low cost audio and video electronics, the procurement of materials and components has not a strategic importance. And also, the price of RFID tags is almost the same with some of the materials used in production. So it would be better to first implement the RFID system in the post-production part of our supply chain, and keep waiting for further developments of this technology to implement it in the first part of our supply chain. ...read more.

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