Radio Frequency Identification chips for real-time tracking

System would help food suppliers reduce wastage, improve efficiency and save more capital

Faran Mahmood October 09, 2016
System would help food suppliers reduce wastage, improve efficiency and save more capital. PHOTO: BLOOMBERG

ISLAMABAD: According to an estimate, food and drink supply chain wastes now cost billions of dollars every year and the figure for the United Kingdom alone has gone past £5 billion.

The much-hyped sustainability agenda, which was previously seen as a top-down conspiracy sponsored by the United Nations (UN), is now as real as it gets. Governments around the world are now looking for new policy options to leverage ICT in their on-going ‘sustainability’ efforts.

One of such success stories in the pipeline involves the use of Radio Frequency Identification (RFID) chips - that have become a technology of choice for real-time tracking, inventory management and for improving production-decision processes.

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Super stores like Wal-Mart and Tesco are in process of deploying these RFID-based product tags that not only results in waste reduction and improved efficiencies but also in more capital savings and a smaller carbon footprint.

Unlike barcodes, that identify a specific product type, the RFID tag has sufficient data capacity to store any information including the Electronic Product Code (EPC). The EPC is used for looking up information such as a product price, expiry date, weight and other specifications from a database.

The RFID tagged product is tracked individually throughout during various stages of supply-chain till it ends up in the hands of a customer.  RFID systems consist of smart tags, embedded into labels and communicate wirelessly with RFID transceivers, or readers, responding with identification information that is associated with arbitrary data records.

Companies are finally positive to find the “Holy Grail” of supply chains allowing a demand-based planning (pull) instead of traditional “push” strategies.

RFID is also playing a greater role in carbon tracking of various operations of firms. Manufacturers can keep track of various products as they move through various facilities and into the production line.

Wal-Mart’s former Chief Information Officer Rollin Ford said in ‘RFID Journal LIVE Conference that, “RFID can allow us to perform a root-cause analysis and make real-time forecasts, which leads to sustainability.”

According to UN Food and Agriculture Organization (FAO), about 33% of the global food production worldwide is lost or wasted - totalling to about 1.3 billion tonnes every year. RFID with embedded sensors could in fact be a game changing technology - improving efficiencies across the entire food supply chain and translating them directly into lower costs and lesser food waste.

These tags help improve transparency as one can look into conditions to which perishable products are exposed while in transit. Growers are capable of recording temperatures of pallets while being transported as RFID tags could be read conveniently without a need to remove tags. Some RFID systems transmit temperature data over GSM network during transit.

So, say if the temperature inside a truck approaches limiting levels, the shipping company will receive a real-time alarm and can alert the truck driver to remedy the problem. Vendors and supply chain partners use RFID to improve efficiencies leading to fewer errors, lesser wastes, lower energy consumptions and lower CO2 footprint.

But as RFID becomes more pervasive in society, issues surrounding privacy and data security legislation become more important. RFID tags can store personal data, and can also be used to track the movement of people or monitor their behaviour.

According to surveys, consultations and wider international bodies, public awareness and understanding of RFID is limited and this lack of awareness limits the ability to assert choice with respect to privacy issues.

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Washington State passed a law protecting consumer privacy in 2008 by making it a felony to maliciously scan someone’s identification remotely without their knowledge and consent. The law applies to RFID chips in identification cards, cell phones and even running shoes, like those that Nike coupled with iPods so that runners can log their mileage, pace, and calories burned.

The European Commission issued a recommendation in May 2009 on the implementation of privacy and data protection principles for RFID tags. In that recommendation, the commission established some guiding principles such as keeping customer data separate from inventory-management data instead of ‘fusing’ them.

Despite global social and political controversies, RFID technology is already making a difference. Mission Foods that manufactures tortillas and chips, switched from cardboard boxes to reusable totes embedded with RFID tags at just one of its many US warehouses. Doing so has saved the company more than $1 million since 2009, thanks to better visibility and lesser waste. It is expected that the overall cost savings for the industry are 11% to 18% by reducing theft losses, 5% by cutting logistic delays, and 9% to 14% by decreasing out-of-stock merchandise.

The writer is a Cambridge graduate and is working as a management consultant.


Published in The Express Tribune, October 10th, 2016.

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