Business Information Systems: Working Principle, Problems, Limitations, Implementation, and Future Prospects

This report discusses the working principle of RFID, technical and business problems solved by RFID, limitations of RFID, one organizational implementation of RFID, and RFID's future prospects and success. It also includes a case study of Wal-Mart.

Running head: BUSINESS INFORMATION SYSTEMS
Business Information Systems
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction.............................................................................................................2
1. Working Principle of RFID..................................................................................2
2. Technical and Business problems solved by RFID............................................3
3. Limitation of RFID...............................................................................................3
4. One organizational implementation of RFID: Wal-Mart......................................4
5. RFID’s future prospects and success.................................................................5
Conclusion..............................................................................................................5
References..............................................................................................................7

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Introduction
Technologies play a major role in business operation across the world. One such
technology is RFID or Radio Frequency Identification Technology. Radio frequency
identification can be termed as a form of wireless communication that mainly
incorporates the use of electromagnetic coupling in order to uniquely identify the
different a specific object (Bhattacharya, 2012). Therefore, RFID helps in locating and
identifying an object with the help of radio waves. The basic form of RFID can be
employed with the help of a microchip and an antenna. The technology of RFID is
somewhat similar to the BARCODES. The report evaluates the working principle of
RFID and the technical and business problems that can be solved by making use of
RFID. The report further discusses the limitation of RFID technology and cites an
example of the organization that uses RFID in its business.
1. Working Principle of RFID
RFID makes use of the radio waves in order to detect the nearby RFID enabled
devices. An RFID system comprises of an RFID tag, a RFID reader and an antenna.
The main component of RFID tag is an integrated circuit and an antenna (Dwivedi et al.,
2013). This antenna is used to transmit the data in the RFID reader. The tag reader in
turn converts the received radio waves into a usable data form. Since RFID use
electronic tags for storing data, it is also known as electronic label. The name is
electronic label as RFID helps in automatic identification of the different packages,
products and machineries (Chunli & Donghui, 2012,).
Broadly classified, there are two major types of RFID system, which are active
RFID and passive RFID. In Passive RFID, the RFID tag does not contain an internal
power source or a battery and the power is supplied by the reader. Active RFID on the
other hand possess a power source in form of internal battery. Active RFID has long
range and is used to track high valued goods. However, the battery source is needed to
be replaced from time to time for its effective operation.
Radio Frequency Identification is mainly used to obtain the real time location of
different objects and assets. Therefore, the most common use of RFID is to identify the

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different individual products. The working of RFID is similar to bar-coding in an object or
a device with a tag.
2. Technical and Business problems solved by RFID
RFID provides easy and wireless identification of different objects are devices
that are incorporated with the RFID tags. Therefore, it helps in easier identification of
inventory items; in turn, reducing the cost and tagging each item manually. Therefore, in
manufacturing and supply chain business, RFID increases the accuracy of the sales
and record keeping of the inventory and sold items. The major advantage of using RFID
tags as the identification of different object is that it needs no human intervention in the
entire process. Thus it reduces human errors or erroneous data entry. This is
particularly beneficial for a business and it cuts down the employment cost to a
considerable amount.
This type of technology is not new in practice has business had been using
BARCODE and QRCODE for some time. However, RFID differs to a large extent from
the other two technologies. The working principle of RFID is completely different from
BARCODE and QRCODE (Barrera, Mira & Torroba, 2013). Even BARCODE requires
manual tagging and therefore, RFID is generally preferred over BARCODE. On the
other hand, the QRCODE can be read only with the help of a QR reader.
Although RFID solves several business problems, the cost of implementation of
RFID in business is very high. However, the major problem with the business that is
asset tracking can be effectively solved by RFID and therefore, many business
organizations are implementing this technology in order to keep a track of the real time
location of a particular asset or an object.
3. Limitation of RFID
Although RFID technology is beneficial to the business, there are certain
limitations associated with this technology. The major limitation of this technology is as
follows-

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1. The major issue associated with RFID is the cost of implementation of this
technology in different business operation. Therefore, it is not generally adopted by
small business as tagging a low cost material with a RFID tags will not be cost effective.
2. There is certain reusability issues associated with RFID and therefore, it may
not be a cost effective solution for some small or medium sized business (Expósito &
Cuiñas, 2013).
3. There is always a possibility of passive tags being read multiple times by the
readers, which is another major issue associated with implementation of RFID in
business.
4. There is certain security issues associated with the RFID as the tags can be
rad by anyone who possesses an RFID reader.
5. Furthermore, RFID tags possess certain physical limitation as it cannot be
read through liquid or metals.
The new problem that arises with the implementation of RFID is the security
issue which is one of the major limitations associated with the technology. RFID tags
are considered to the dumb devices as there is a risk of unauthorized access and
modification of the tag of the data. Therefore, RFID is often termed as dumb devices as
it only listens and responds to the signal, no matter who sent it.
4. One organizational implementation of RFID: Wal-Mart
Many business organization have been using RFID in their daily business
operation, one such example of implementation of RFID in business is the world’s one
of the largest retailers, Wal-Mart. Wal-Mart first embarked on use of RFID devices back
in the year 2003 (Shin & Eksioglu, 2014). In the year 2003, the world’s largest retailers
Wal-Mart has sent out a request to its top 10 suppliers to make use of RFID tags in
different pallets of consumer goods. This was done as the out of stock items that carried
RFID tags could be replenished much faster. With the use of RFID in its operation,
Wal-Mart efficiently maintains its supply chain (Heller, 2017). The inventory items could
be easily tracked with the help of the RFID tags and Wal-Mart was able to develop a

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smooth business chain by use of modern technology in streamlining its supply chain,
one of such technology is radio Frequency Identification. With the implementation of
RFID technology, the movement of goods across the inventory of Wal-Mart could be
easily tracked. The retail store further uses RFID in keeping their shelved stocked with
as it provides the real time information about the items stocked or in inventory
(Bhattacharya, 2012).
5. RFID’s future prospects and success
The use of RFID is not only limited to supply chain management and in retail
marketplace but also finds its usage in antitheft car keys, automated tool booths and
can often be implanted in pets for easy identification (Jia et al., 2012). Apart from this,
RFID has wide usage in the retail marketplace. It helps in proper visibility of logistic and
helps in obtaining error free data.
Not only in retail sector, RFID is used in medical and health care as well. This is
used to reduce the medical errors by real time monitoring of the location of the patient in
the hospital (Manzoor, 2016). This can reduce or eliminate the risk of ineffective patient
monitoring. The real time data of the patient that is obtained from RFID helps in
responding to the patients more easily and effectively (Chang, Lai & Chen, 2012).).
Apart from this, RFID technology is used in banking sector as well that enhances
the services provided to the customers. Card enabled with RFID chip makes the
process of wireless payment even more effective. The bank card embedded with RFID
chip is provided to the customer for facilitating the process of wireless payments.
Furthermore, RFID can be used in tracking the IT asses of a company. The real
time data provided by RFID helps in proper monitoring of the IT assets present in the
organization. Use of radio Frequency identification is therefore widespread in the market
and is adopted by many different organizations as well.
Conclusion
From the above discussion, it can be concluded that RFID provides a number of
benefits in different business sectors. The main principle of RFID is wireless tracking of

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the goods and machineries which is achieved by the tag and the associated antenna.
The report discusses in brief the working principle of the radio frequency identification in
order to understand the process by which an item is tagged. The major advantage of
the use of RFID is that it eliminates the risk of erroneous data entry in the inventory. The
report further discusses how RFID differs from BARCODE and QRCODE technology.
One of the business sectors that make use of RFID technology is Wal-Mart. The report
discusses the how Wal-Mart makes use of RFID in enhancing their business processes.
RFID is a leading technology that is used in different business sectors be it retail, supply
chain or healthcare. However, there is certain security issues associated with RFID that
is needed to be kept in check.

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References
Barrera, J. F., Mira, A., & Torroba, R. (2013). Optical encryption and QR codes: secure
and noise-free information retrieval. Optics express, 21(5), 5373-5378.
Bhattacharya, M. (2012). Impact of RFID on the retail value chain: An exploratory study
using a mixed method approach. Journal of technology management &
innovation, 7(4), 36-49.
Chang, C. H., Lai, Y. L., & Chen, C. C. (2012). Implement the RFID position based
system of automatic tablets packaging machine for patient safety. Journal of
medical systems, 36(6), 3463-3471.
Chunli, L., & Donghui, L. (2012, April). Application and development of RFID technique.
In Consumer Electronics, Communications and Networks (CECNet), 2012 2nd
International Conference on (pp. 900-903). IEEE.
Dwivedi, Y. K., Kapoor, K. K., Williams, M. D., & Williams, J. (2013). RFID systems in
libraries: An empirical examination of factors affecting system use and user
satisfaction. International Journal of Information Management, 33(2), 367-377.
Expósito, I., & Cuiñas, I. (2013). Exploring the limitations on RFID technology in
traceability systems at beverage factories. International Journal of Antennas and
Propagation, 2013.
Heller, F. (2017). Technological innovation applied to walmart and tesco’s supply
chain (Doctoral dissertation).
Jia, X., Feng, Q., Fan, T., & Lei, Q. (2012, April). RFID technology and its applications in
Internet of Things (IoT). In Consumer Electronics, Communications and
Networks (CECNet), 2012 2nd International Conference on (pp. 1282-1285).
IEEE.
Manzoor, A. (2016). RFID-Enabled Healthcare. International Journal of Information
Communication Technologies and Human Development (IJICTHD), 8(2), 26-46.

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Shin, S., & Eksioglu, B. (2014). Effects of RFID technology on efficiency and profitability
in retail supply chains. Journal of Applied Business Research, 30(3), 633.
Zhong, R. Y., Huang, G. Q., Lan, S., Dai, Q. Y., Chen, X., & Zhang, T. (2015). A big
data approach for logistics trajectory discovery from RFID-enabled production
data. International Journal of Production Economics, 165, 260-272.
Zhu, X., Mukhopadhyay, S. K., & Kurata, H. (2012). A review of RFID technology and its
managerial applications in different industries. Journal of Engineering and
Technology Management, 29(1), 152-167.