RFID Leveraging Global Commerce With Tracking & Tracing Technologies
Trend Report 2005
CENTER FOR DIGITAL TECHNOLOGY & MANAGEMENT
Trend Report 2005 RFID – Leveraging Global Commerce With Tracking & Tracing Technologies
Supported by Unisys
Trend Report 2005: RFID – Leveraging Global Commerce With Tracking & Tracing Technologies Edited by: Uwe Sandner, Bernhard Kirchmair, Philip Mayrhofer, Maximilian Zündt Copyright 2006 Center for Digital Technology & Management Arcisstraße 21 80290 München, Germany E-Mail: info@cdtm.de Web: http://www.cdtm.de ISBN 3-9808842-5-2 The Center for Digital Technology & Management (CDTM) is a joint institution of the Technische Universität München (TUM) and the Ludwigs-Maximilians-Universität München (LMU). This report was created by CDTM students and is one element of a comprehensive research project, sponsored by Unisys. The CDTM is part of the Elitenetzwerk Bayern (ENB). Board of Directors: Prof. Dr. Dr. hc. Manfred Broy, Chair for Software & Systems Engineering, TUM Prof. Bernd Brügge, Ph.D, Chair for Applied Software Engineering, TUM Prof. Dr.-Ing. Klaus Diepold, Institute for Data Processing, TUM Prof. Dr.-Ing. Jörg Eberspächer, Institute for Communication Networks, TUM Prof. Dietmar Harhoff, Ph.D., Institute for Innovation Research, Technology Management and Entrepreneurship, LMU Prof. Dr. Heinz-Gerd Hegering, Chair for Communication Systems and Computer Networks, LMU Prof. Dr. Thomas Hess, Institute for Information Systems and New Media, LMU Prof. Dr. Helmut Krcmar, Chair for Information Systems, TUM Prof. Dr. Dres. h.c. Picot, Institute for Information, Organisation and Management, LMU
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Preface
Emerging tracking & tracing and ubiquitous computing technologies, most notably RFID, promise to change today’s business and society in various ways. These new technologies hold powerful potentials to boost process efficiency in logistics, security, health and many other areas by reducing errors and counterfeiting, superseding media breaks and accelerating processing speed, going far beyond the boundaries of existing barcode based applications. The gap between the real world of physical objects and the virtual information space is more and more diminished, the flow of goods and the flow of data approach parallelism, enabling companies to get a more precise view of their internal assets to better control and manage their processes. The connection between a physical good and its manufacturer through the whole product life cycle enables enterprises to sell interlocked services and solutions, increase customer lock in and follow new business models. Value added services provide vast benefits for consumers and make life easier and more secure. The standardization of product related data facilitates the exchange of information between companies all along the supply chain. This trend report shows the work and visions of 20 students of the Class of 2007 of the Center for Digital Technology and Management. Their work represents a starting point in understanding where tracking and tracing is today and where students envision its further development. The book is split into two parts: Part one presents six research reports looking at the state of the art of tracking and tracing technologies from several perspectives. First, you will find an outline about the social and legal framework, followed by an overview of the current RFID market and existing applications. Then the technical aspects are described, starting from ERP applications over the EPCGlobal standard to hardware aspects. Part two is visionary. Five student teams present tracking and tracing applications that in their opinion will reshape the future. RFID will impact the flow of goods and data in the smart supply chain and change manufacturing processes in the factory of the future. The discussion around RFID certainly leads to privacy questions but also raises the question what’s in for the consumer. The next team envisions the application of smart RFID road signs for more efficient and safe traffic. The chapter ends with a discussion how public safety can be improved by using RFID. Please enjoy reading this interesting booklet, maybe some ideas will inspire you to future activities in the field of tracking & tracing. Dietrich Schmitt Vice President and Managing Director Germany Howard Barrett Vice President and Managing Partner Global Commercial Industries UKEMEIA
Munich, February 2006
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Preface
This trend report is part of a comprehensive research project of the CDTM, supported by Unisys. For more information about the CDTM and RFID related projects, please visit www.cdtm.de, for more information on Unisys please visit www.unisys.com.
Table of Contents
Part 1: Research Report Social and Legal Framework ................................................................... 3 Laura Dietze and Rebecca Ermecke 1 Introduction....................................................................................................... 3 2 Barriers and Implications on Society ............................................................... 3 2.1 2.2 2.3 2.4
Introduction......................................................................................... 3 Positive Implications........................................................................... 3 Negative Implications ......................................................................... 4 Conclusion .......................................................................................... 7
3 Why Are Standards Necessary? ....................................................................... 8 3.1 Standards as the Motor for Development............................................ 8 3.2 The Current Situation.......................................................................... 8 4 Existing Standards and Regulations................................................................. 9 4.1 EPC ..................................................................................................... 9 4.2 Frequency Regulations...................................................................... 10 5 Other Regulations Affecting the Development of RFID............................... 11 5.1 RFID Specific Regulations in Germany and in the US ..................... 11 5.2 Critical Values for Electromagnetic Fields ....................................... 12 6 Summary......................................................................................................... 12 References............................................................................................................. 13
RFID Market ........................................................................................... 17 Susann Gr채mer, David Holzmann, and Jakob Keller 1 Introduction..................................................................................................... 17 2 Overview......................................................................................................... 17 3 Market Segmentation...................................................................................... 18 3.1 RFID Applications and Their Market Relevance.............................. 18 3.2 Market Potentials .............................................................................. 18
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3.3 Drivers and Restraints for RFID Usage ............................................ 19 3.4 The RFID Market – Revenues and Sales .......................................... 20 4 RFID Market Players...................................................................................... 21 4.1 RFID Vendors ................................................................................... 21 4.2 Demand for RFID Technology ......................................................... 24 5 Outlook ........................................................................................................... 27 References............................................................................................................. 27
Current Track and Trace Applications................................................. 31 Sophie Ahrens, Tobias Assmann, Julia Gebele, and Andrea Socher 1 Introduction..................................................................................................... 31 2 Supply Chain Management ............................................................................ 31 3 Status Quo: Auto-ID Systems ........................................................................ 33 3.1 3.2 3.3 3.4
Traditional Technologies .................................................................. 34 Fields of Auto-ID Application .......................................................... 35 Benefits of Auto-ID Systems ............................................................ 36 Problems ........................................................................................... 37
4 RFID Technology........................................................................................... 38 4.1 4.2 4.3 4.4 4.5 4.6
Differences Between RFID and Barcode .......................................... 38 Solving the Problems with Barcodes................................................. 38 RFID Applications and Benefits ....................................................... 40 Other Applications ............................................................................ 44 Problems of RFID ............................................................................. 47 Solutions ........................................................................................... 48
5 Conclusion ...................................................................................................... 48 References............................................................................................................. 49
RFID Integration into ERP Systems ..................................................... 53 Veronika Gamper, Sebastian Kraiker, Jing Li, Johannes Wust 1 Introduction..................................................................................................... 53 2 ERP Systems................................................................................................... 53 2.1 2.2 2.3 2.4
Overview........................................................................................... 53 Example Process ............................................................................... 54 Example ERP System: SAP R/3 ....................................................... 54 Issues on Implementing an ERP System........................................... 55
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2.5 Integration of Different ERP Systems............................................... 56 3 Integrating RFID Data into ERP Systems ..................................................... 57 3.1 RFID Offers New Potentiality to Improve Effectiveness of ERP System....................................................................................... 57 3.2 Technical Requirements and Application Integration Structure ....... 57 4 Software Vendor’s Current Approaches Towards RFID Integration............ 60 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8
Vendors’ Profiles .............................................................................. 60 Implications of the Early Market ...................................................... 61 Oracle................................................................................................ 62 SAP ................................................................................................... 63 Microsoft........................................................................................... 64 Sun Microsystems ............................................................................. 65 Seeburger .......................................................................................... 67 Other Vendors ................................................................................... 68
5 Conclusion ...................................................................................................... 68 References............................................................................................................. 69
The EPCglobal Network™..................................................................... 73 Stefan Hudelmaier, Dominik Schmidt, Philipp Torka, and Nino Ulsamer 1 Introduction..................................................................................................... 73 2 Overview......................................................................................................... 73 2.1 2.2 2.3 2.4
Motivation......................................................................................... 73 Status................................................................................................. 73 Network Structure and Components ................................................. 74 Taking Advantage of Distributed Applications................................. 75
3 Electronic Product Code................................................................................. 75 3.1 Characteristics................................................................................... 75 3.2 Components ...................................................................................... 76 4 EPC Middleware............................................................................................. 77 4.1 4.2 4.3 4.4
Terminology...................................................................................... 77 The EPC Middleware Component .................................................... 77 The Savant......................................................................................... 78 Application Layer Events (ALE) ...................................................... 78
5 Name Services ................................................................................................ 80 5.1 Object Name Service......................................................................... 80 5.2 EPC Discovery Service ..................................................................... 83
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6 EPC Information Service................................................................................ 83 6.1 6.2 6.3 6.4
Classification..................................................................................... 83 Architecture....................................................................................... 84 Security ............................................................................................. 85 State of Development........................................................................ 85
7 Physical Markup Language............................................................................ 86 7.1 Classification..................................................................................... 86 7.2 Basic Principles................................................................................. 86 7.3 The PML Core .................................................................................. 86 8 Conclusion ...................................................................................................... 87 References............................................................................................................. 88
Physical Layer of RFID Systems............................................................ 91 Zoltan Elek, Jinjing Gong, Karl Janker, and Florian Rohrmüller 1 Introduction..................................................................................................... 91 2 Components and Basic Principles of RFID Systems..................................... 91 2.1 Components of RFID Systems.......................................................... 91 2.2 Three Possible Principles to Transfer Data Through the “Air Interface”................................................................................... 92 3 Frequency Ranges and Working Environment.............................................. 94 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8
Introduction....................................................................................... 94 13.56 MHz RFID Systems ................................................................ 95 868/915 MHz UHF RFID Systems ................................................... 97 2450 MHz RFID Systems ................................................................. 97 Short Summary ................................................................................. 98 System Components.......................................................................... 99 Reader – Tag Interface ...................................................................... 99 Network – Reader Interface ............................................................ 104
4 RFID Hardware ............................................................................................ 104 4.1 4.2 4.3 4.4
Tags................................................................................................. 104 Manufacture .................................................................................... 107 Reader ............................................................................................. 109 Outlook ........................................................................................... 109
References........................................................................................................... 110
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Part 2: Trend Reports The Smart Supply Chain ...................................................................... 115 Julia Gebele, Jingjing Gong, Andrea Socher, and Johannes Wust 1 Introduction................................................................................................... 115 2 Scenarios....................................................................................................... 115 2.1 In-Transit Routing of Perishable Goods.......................................... 115 2.2 Selling Perishable Goods In-Transit................................................ 119 3 A New Market .............................................................................................. 120 3.1 Risks in Supply Chain Management ............................................... 120 3.2 The Trend Towards RFID in the Supply Chain .............................. 120 3.3 The New Market ............................................................................. 122 4 The Evolution of the Market ........................................................................ 123 4.1 4.2 4.3 4.4 4.5
Product Tagging.............................................................................. 123 Synchronous Flow of Material and Information ............................. 124 Data on Network ............................................................................. 125 Visibility of Supply Chains ............................................................. 126 Participants...................................................................................... 127
5 Technology Enablers .................................................................................... 130 5.1 Standardized Data Structures and Interfaces................................... 130 5.2 RFID Technology............................................................................ 131 5.3 An Internet of Products ................................................................... 132 6 Technology Challenges ................................................................................ 138 6.1 Challenges in RFID Technology..................................................... 138 6.2 Challenges in Data Network ........................................................... 140 7 Market Drivers.............................................................................................. 141 7.1 Manufacturers ................................................................................. 141 7.2 Retail Business ................................................................................ 143 7.3 Automotive Industry ....................................................................... 144 8 Emergence of the New Market .................................................................... 147 8.1 8.2 8.3 8.4
Supply Chain Institutions................................................................ 147 Consolidated Property Rights.......................................................... 147 Transaction Costs ............................................................................ 148 The Supply Chain Network............................................................. 151
9 Financial Analysis ........................................................................................ 153
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10 Conclusion .................................................................................................... 156 References........................................................................................................... 157
The Factory of the Future .................................................................... 161 Zoltan Elek, Susann Grämer, Jakob Keller, and Nino Ulsamer 1 Introduction................................................................................................... 161 2 Overview....................................................................................................... 161 3 Advantages of RFID..................................................................................... 162 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 3.10 3.11
Identification Advantages ............................................................... 162 Localization Advantages ................................................................. 162 Smart Sensors and Smart Sensor Networks .................................... 163 Smart Tags ...................................................................................... 165 Divisions of a Factory ..................................................................... 166 Goods Receipt and Goods Issue...................................................... 166 Storage ............................................................................................ 168 Production ....................................................................................... 169 Plant and Equipment Management.................................................. 171 Human Resources............................................................................ 172 Quality Assurance ........................................................................... 173
4 Trends ........................................................................................................... 174 4.1 4.2 4.3 4.4 4.5
Automation...................................................................................... 175 Mass Customization ........................................................................ 175 Virtualization and Simulation ......................................................... 178 Networking, Outsourcing and off-Shoring...................................... 182 Virtual Factory ................................................................................ 184
5 Vision............................................................................................................ 186 6 Evaluation of Vision..................................................................................... 193 7 Conclusion .................................................................................................... 195 References........................................................................................................... 196
Leveraging Global Commerce – What’s in for the Consumer?........ 199 Sophie Ahrens, Rebecca Ermecke, Karl Janker, and Philipp Torka 1 Introduction................................................................................................... 199 2 Vision............................................................................................................ 199
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3 Assumptions ................................................................................................. 211 3.2 Economic ........................................................................................ 211 3.3 Legal ............................................................................................... 211 3.4 Social............................................................................................... 212 4 Adoption and Diffusion................................................................................ 212 4.1 Diffusion ......................................................................................... 212 4.2 Decision Making and Control ......................................................... 219 4.3 Assumptions About the Consumer.................................................. 221 5 RFID Applications........................................................................................ 223 5.1 5.2 5.3 5.4
Analysis of Consumer Applications................................................ 223 Global Identification (GlobalID)..................................................... 228 Smart Shopping and Cooking ......................................................... 235 Personal Fashion Adviser................................................................ 240
6 General Advantages and Disadvantages for Consumers............................. 243 6.1 Advantages...................................................................................... 243 6.2 Disadvantages ................................................................................. 243 7 Conclusion .................................................................................................... 244 References........................................................................................................... 245
Smart RFID Road Signs ....................................................................... 247 Tobias Assmann, Laura Dietze, Sebastian Kraiker, Jing Li, and Dominik Schmidt 1 Introduction................................................................................................... 247 2 Smart RFID Road Signs ............................................................................... 248 2.1 General Idea .................................................................................... 248 2.2 Players............................................................................................. 250 3 Application Scenarios................................................................................... 252 3.1 3.2 3.3 3.4 3.5
Introduction and Differentiation...................................................... 252 General Technology ........................................................................ 253 Static Smart RFID Road Signs........................................................ 255 Dynamic Smart RFID Road Signs .................................................. 263 Advanced Smart RFID Road Signs................................................. 271
4 Market and Competition............................................................................... 279 4.1 Legal Framework ............................................................................ 279 4.2 Market Size ..................................................................................... 281 4.3 Analysis of Similar Concepts.......................................................... 281
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4.4 User Acceptance ............................................................................. 284 5 Marketing...................................................................................................... 285 5.1 5.2 5.3 5.4
The Product ..................................................................................... 285 Target Groups ................................................................................. 286 Marketing Goals.............................................................................. 286 Strategy: Long-Term Versus Short-Term ....................................... 287
6 Business Model and Economic Success ...................................................... 289 6.1 Business Processes .......................................................................... 289 6.2 Business Model ............................................................................... 290 7 Vision............................................................................................................ 293 7.1 Co-Operations ................................................................................. 294 7.2 Technical Development .................................................................. 296 7.3 Different Possible Applications ...................................................... 297 8 Conclusion .................................................................................................... 299 References........................................................................................................... 299 Appendix: Financial Calculations...................................................................... 302
Improving Public Safety by Using RFID ............................................ 307 Veronika Gamper, Florian RohrmĂźller, David Holzmann, and Stefan Hudelmaier 1 Introduction................................................................................................... 307 2 Food Safety................................................................................................... 308 2.1 2.2 2.3 2.4 2.5 2.6 2.7
Introduction..................................................................................... 308 Current Situation ............................................................................. 309 RFID Solution ................................................................................. 312 Scenario – The Cheeseburger.......................................................... 314 Applicability & Market ................................................................... 315 Spin-off Applications ...................................................................... 317 Conclusion ...................................................................................... 317
3 Theft Prevention ........................................................................................... 317 3.1 3.2 3.3 3.4
Introduction..................................................................................... 317 Software Copy Protection ............................................................... 318 Car Tracking ................................................................................... 330 Conclusion ...................................................................................... 343
4 Tracking of Criminals and Surveillance of People in Danger..................... 344 4.1 Introduction..................................................................................... 344
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4.2 4.3 4.4 4.5
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Current Situation ............................................................................. 345 Surveillance of People in Need for Protection ................................ 345 RFID Solution ................................................................................. 346 Conclusion ...................................................................................... 352
5 Conclusion: Can RFID Improve Public Safety?.......................................... 352 References........................................................................................................... 353
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