Radio Frequency Identification in the Smart Supply Chain

Introduction

It is undeniable that the introduction of barcodes and their acceptance by all industry several years ago resulted in a revolution in the supply chain. We are now facing a similar transformation with the introduction of Radio Frequency Identification (RFID). The use of RFID allows the introduction of an additional level of intelligence in the management of products as they move through the different steps in the supply chain. Of particular interest are the possibilities to track inventory on real time as well as to introduce techniques to detect and prevent counterfeited products. These two characteristics in turn, result in a decrease of losses and a reduction in processing time and labor.

The goal of this chapter is to provide the reader with an introduction to the basic principles of RFID as well as to illustrate how this technology is being currently used to increase the efficiency in the supply chain as well as to fight the counterfeit of products that are critical to our society.

The counterfeiting of goods is an increasingly widespread problem through the industrialized and developing world. Recent estimates put the effect of counterfeiting between 5% to 7% of total world trade (Kim and Kim, 2005). The US defines counterfeiting as an item that is a copy or a substitute of a legal item without the right to do so, or whose materials, performance or characteristics are knowingly misrepresented by the manufacturer, supplier or vendor (US Department of Energy, 2004). While counterfeiting evokes the image of products imitating luxury watches, designer purses and other high-end items, the real impact of counterfeited items is more serious and may have extreme consequences. This is especially important as counterfeited products are increasingly appearing in critical systems such as the electronic components used for defense systems, pharmaceutical products and parts used for repair and maintenance of aircraft.