1) Literature Review

1.1. Introduction
Improvement of Supply Chain Efficiencies has assumed unprecedented importance in
modern business environment. This is because ensuring customer satisfaction is
increasingly becoming the one method of building sustainable competitive advantage
amongst companies (Ariba, 2007). According to Jackson & Mandal (2010), making sure
that customers get ordered quantity of goods, in perfect condition and within time
deadlines are parameters of good customer service. An agile and timely response to
constantly changing customer requirements further results in customer delight (Ariba,
2007).
Thus management is increasingly focusing on improving all the operations involving
supply chain activities (Hongwei & Lilan, 2007). These include vendor management,
procurement, planning of manufacturing activities, warehousing and customer service. A
good supply chain is one which seamlessly integrates all of these activities resulting in
quick movement and reduction of inventories, increased return on investments, improved
customer service and an hence increase in the brand value of the organization (Jun,
2008).
According to Nikitin & Rao (2009) Supply Chain Efficiencies are secured primarily by
improving the critical task of tracking of goods. This has traditionally been done by use
of bar codes. However bar codes suffer from various deficiencies such as read only tags,
manual scanning operations, data errors and duplication all of which compromise
organizations ability to efficiently track goods.
According to Roberts & Munroe (2009) Radio Frequency Identification (EFID)
Technology is a good alternative to bar codes. With RFID, wireless technologies facilitate
automated data entry regarding product type and product location within the warehouse.
Dynamic tracking is enabled. Since it does away with manual entries, errors are

dramatically reduced; data synthesis and product identification tasks are simplified
(White et al., 2007)
RFID also reduces cost of labour and logistics which are the two major costs impacting
an organizations bottom-line today (White et al., 2007). Automation results in optimal
labour requirements while logistical operations get streamlined. RFID can be seamlessly
integrated with ERP systems providing real time information on order bookings,
payments and inventory status. It dramatically improves tracking of inventory, thereby
making inventory forecasting more efficient. Losses on account of robberies or
counterfeit products are reduced (White et al., 2007).
However despite these manifold benefits, initial investments in RFID technologies are
very high (Mandal & Sarpeshkar, 2007). According to Marroco (2008) these costs can be
justified only in very large warehouses which manage high frequency movement of very
large inventories of high value. Moreover the RFID equipment needs to be stationary or
in a fixed position for management. Hence it is the intention of the author to postulate
an RFID technology that is flexible enough to be extended to larger possibilities. This
includes tracking goods which are in transit using Mobile RFID technology. This new
and latest technology incorporates RFID along with GPRS and mobile technologies to
produce an offering with vastly increased efficiencies as compared to stationary RFID
infrastructure (Jones & Hoare, 2009).
This thesis considers the feasibility of implementation of Mobile RFID technology in a
cross docking section of Hollister Logistics, UK. Hollister provides logistical support for
clients primarily in the automobile and transportation sectors. Mobile RFID has been
experimentally implemented to check if operational and business efficiencies can be
substantially increased. Based on this experiment, the advantages and disadvantages of
this new technology are then presented and discussed.
1.2. Warehousing
According to Alessio & Bonni (2009) integral to the proper functioning of every
organizations supply chain is efficient warehousing infrastructure. This is because

warehouses connect the manufacturer with his client / customer. An essential measure of
customer satisfaction is the service he is rendered by the warehouse (Derbek et al., 2006).
Efficient Warehousing operations render excellent customer service at minimal cost to the
manufacturer. The warehouse is however just part of the overall logistical operations of
the company and its primary function is to store goods which includes raw materials,
portions of the finished product, partially finished goods as also the fully finished product
(Derbek et al., 2006). Transporting these goods from point of manufacture / production
to point of consumption also falls within the ambit of warehousing operations.
1.3. Various Kinds of Warehouses
The most common kind of warehouse is one in which goods are stored en masse
(Deighton & Lee, 2010). This kind of warehouse is located at an intermediate point
between manufacturing point and consumption point. However some production facilities
market their goods directly to clients. These organizations do not need warehouses at all
(Derbek et al., 2006).
Another warehousing concept is cross docking (Balachandran & Barnett, 2009). Here,
goods are sent to the warehouse by the manufacturing facility. However before being
stored, they are first broken up into smaller portions. Each portion corresponds both in
terms of size & quantity of individual units to client / customer orders. These portions are
then stored prior to being shipped to the customers (Balachandran & Barnett, 2009). The
cross docking concept is important from this thesiss perspective since mobile RFID
technology will be tested at the cross docking facility of Hollister Logistics.
1.4. Types of Warehouse Operations
The traditional warehousing function is for mass storage of goods and then to deliver
them to customers in such a way that minimal costs are incurred and customer
satisfaction is ensured. However a modern warehousing operation also includes
consolidation of products, bulk breaking as also dissemination of data to manufacturers &
clients (Hawkins & Stonewall, 2009). These aspects focus on the movement of goods to
and from the warehouse rather than storage only. According to Hawkins & Stonewall

(2009) quick, efficient movement of goods combined with real time and correct data
about goods in transit as also goods in storage are the hallmarks of a good modern
warehousing facility. Thus the primary functions of a warehouse are:
Manage Flow of Goods
Storage of Goods
Data Management
Manage Flow of Goods
1.4.1. Manage Flow of Goods
The management of flow or movement of goods is subdivided into the following tasks:
Receipt of Goods
Transferring Goods or Put Away
Selection of Units or Order Picking
Cross Docking
Shipping
Receipt of Goods
This activity includes unloading of goods from the transport vehicle, data entry into the
warehouse inventory database, quality checks and cross verification of goods quantity
against shipping and order transfer invoices (Ricci et al., 2010).
Put Away
This activity includes movement of goods inside the warehouse for storage. Put Away
also includes movement of goods to areas within the warehouse for specific tasks such as

consolidation or bulk breaking as also to the shipping area to be sent to end customers
(Ricci et al., 2010).

Order Picking
This is one of the most essential activities and involves breaking up of the bulk goods
into portions which match in terms of quantity and categories individual customer orders
(Nikitin & Rao, 2007).
Cross Docking
A fundamental concept in modern warehousing is Cross Docking. This is a goods
management and distribution concept that eliminates the need for storage function of
warehousing (White & Robertson, 2007).
It is variously defined as
Immediately matching items between incoming and outgoing shipments (Ricci et al.,
2010).
A logistical procedure used to match items from incoming shipments on the loading
dock with outgoing shipment requirements and transferring them to outgoing vehicles
(White & Robertson, 2007).
Under Cross Docking, products from different suppliers that arrive at the warehouse
centre are sorted and then so distributed amongst various transportation vehicles that each
vehicle leaving for a given destination are loaded with goods from various suppliers.
Its utility lies in its ability to reduce handling and warehouse expenses. It results in
reduction of inventory levels, optimal utilization of resources and more nimble operations
at the warehouse (White & Robertson, 2007).
Shipping

This is the last activity which involves shifting goods packed as per customer orders into
transport vehicles, making the necessary adjustments in inventory database and cross
checking of goods being shipped to ensure compliance with customer orders.

1.4.2. Storage
The Storage Function can be either temporary or partially permanent. Temporary storage
is for goods required for normal inventory replenishment and is required irrespective of
real inventory movements. Partially permanent is a buffer of goods maintained over and
above that required for normal restocking (Yang & Chi, 2008).
1.4.3. Data Management
This function occurs concomitant with data flow
and storage. It involves flow of data to the
manufacturer, warehouse administrators and the
client. The data processed is with regard to stock
levels, input and output quantities, storage
locations, customer orders etc. While barcode
technologies have largely replaced paper work
involved, the latter method is still utilized quite frequently (Saunders & Wu, 2007). RFID
technology is the latest technology to efficiently manage data and is an alternative to
barcode technologies.

1.5. Data Collection

Data collection refers to the process of collation of data received from various sources.
Originally warehouse data was collated manually and included tasks such as filing of
handwritten purchase orders. Modern methods include data capture through scanners
which are then fed to a central computer. A data collection process is said to be efficient if
it captures data accurately at their sources (Roberti, 2006). According to Stoner et al.,
(2007) it should be time bound, automated as far as possible and in an ERP compatible
form.
1.5.1. Auto ID
Data in a warehouse refers primarily to information on movement of goods into and out
of the facility (Roberts & Munroe, 2009). Manual entries included repeated data entries
which is costly and prone to errors. With the development of technology this process has
been automated. However the basic task remains the same, i.e. identification of goods
handled by the warehouse. Automatic Identification is a collective term used for various
technologies used to perform the task of object identification in an automatic fashion
(Karthaus & Fisher, 2010).
Auto ID functions by identifying the unique identifiers located on each item of inventory.
These identifiers are so configured that they can be linked to data systems throughout the
database (Karthaus & Fisher, 2010).
One of the most common Auto ID technologies used is that of bar codes.
1.5.1.1. Bar Codes
Bar Codes may be defined as a series of light and dark bars of different lengths
configured as per industry specifications (Detters & Karnad, 2005). These codes form the
unique identifiers which are used by Automatic ID technology to identify items in a
warehouse. Optical machines or scanners then scan each code and translate bar code
language called symbologies into a format which can be used by software used in the

warehouse to process data. There are nearly 230 barcode symbologies but the most
commonly used ones include the Universal Product Code (UPC) and the Maxi Code
(Karthaus & Fisher, 2010).
The uniqueness of each bar code is obtained by subtle differences in the size, height,
width of the individual bars as also their spacing from each other (Detters & Karnad,
2005).

Bar Code is an enormous improvement over manual identification and registration

techniques. It is quicker, more accurate, cheap and can be used across various industries.
Eg. While typing in 10 bits of data takes 5 seconds, automated scan of a 12 bit bardcode
takes just 0.3 seconds (Falconi & DAmico, 2009). While typing in data has an error
tolerance of 1 in every 300 bits of data, barcode errors are in the order of 1 for every
16000 (Glidden & Bockorick, 2010). Hence it is currently the most commonly used Auto
ID tool.
The bar code itself is only part of a larger whole. Other components in the system include
scanning and decoding devices, specially trained personnel who operate specialized
software (Dehghani & Atarodi, 2008).
According to Hawkins & Stonewall (2009) barcodes suffer from some disadvantages.
These include:
Pricing discrepancies which occur on special discounts / offers
Damaged Labels cannot be read correctly by scanners
Cost initial investments are high

 Training costs are high

Printing of good bar codes involves the use of expensive high quality printers
Operationally the biggest disadvantage is that different suppliers utilized different barcoding systems (Hawkins & Stonewall, 2009). Hence end to end tracking of goods
becomes more difficult.
1.5.1.2. RFID Technologies
RFID technology, first incorporated for industrial and commercial use in the 1980s is
today postulated as an efficient alternative for barcodes since they do away with the
disadvantages of the latter technology (Harris & Grisanti, 2009). RFID carries
identification data for each unit in tags which is then retrieved using wireless technology.

Hence manual operations and its attendant disadvantages are reduced to the minimum
(Harris & Grisanti, 2009). RFID exists in varied formats but share some common
features. These include three main elements:

Tags
All tags consist of an antennae and a micro chip.
The micro chip stores identification data w.r.t. the goods unit to be identified. The
Antennae transmits this ID data to the reading device. Tags are also equipped with an
internal battery. Tags offer several advantages over barcodes being small in size,
inexpensive, have high reliability, minimal maintenance costs and can be embedded into
goods to be tracked (Hawkins & Stonewall, 2009). They can be programmed differently

as per functionality requirements. These can be read only which then cannot be changed
or read / write which offers the advantage of more flexibility.

Readers
Readers act as an interface between the tags and the data collecting application. Readers
include transmitting and receiving devices
Software Application
Software Applications that collate and manage data transmitted by the Reader.
1.5.2. Bar Codes versus RFID
According to Kocer & Flynn (2010) RFID promises to be as much of a revolution in
logistics management as bar code technologies when the latter was first introduced. This
is because of the significant advantages offered by RFID versus Bar Codes (Kocer &
Flynn, 2010). These include:
Size of data scanned by bar codes is maximum 100 KB while RFID can scan upto
64000 KB
Density of data management in bar codes is low while in the case of bar codes it
is high.
While bar codes offer limited readability to humans, RFID is virtually impossible
to decipher. Higher confidentiality is thus maintained.
Any dirt or dampness or damage to the Bar Code sticker renders it unreadable,
while these have no effect on RFIDs.
Any covering on Bar Codes renders it unreadable, while RFIDs continue to
function.

 Direction and position of placement of goods have no effect on RFID

functionalities, while they do influence bar code scanner functioning.
While Bar Codes have significant operating costs in terms of printers, these
technologies are not used by RFIDs resulting in cost savings.
Bar Code data can be manipulated but this is impossible in RFIDs.
Reading Speeds of Bar Codes is of the order of 3 seconds while RFID speeds are
0.5 seconds.
While a distance of at least 50 cms has to be maintained between the goods and
the scanner in the case of bar codes, in the case of scanners this is reduced to 0-5
microwaves.
1.5.3. Business Utility of RFID
The benefits of implementing RFID are very varied and depend on the type of usage in a
supply chain process. Generally costs involved in manual activities and transparency
issues are reduced resulting in higher savings over a longer period of time (Malinowski &
Moskwa, 2007). This thesis will explore the benefits that accrue from RFID at a cross
docking station.
These benefits include:
Increased product touching.
Product Touching refers to the number of goods scanned or identified in a particular time
frame (Watters et al., 2007). Use of Bar Codes involves manual scanning of good units
which is very time consuming. However number of goods scanned within a time frame is
directly proportional to cost savings, i.e. more the goods scanned, larger the savings
(Watters et al., 2007). RFID technology is able to identify / track a very large number of
goods as compared to bar codes and hence the savings are significantly higher in the
former case.

Savings Potential due to Automation of Processes.

A company with a high level of manual operations will save costs due to RFID
implementation more than a company whose systems and processes have already been
implemented, i.e. the more the sophistication level, the lesser the cost benefits and vice
versus of RFID implementation (Zhihua & Xuguang, 2007).
Cost of Labour
The four areas where RFID technology improves labour costs are in replenishment, order
entries, put away and checking in. This is because all these activities required manual
scanning of bar codes which is done away with through RFID (Watters et al., 2007).
Filling of Order Rate
Errors in terms of faulty picking of goods will be eliminated through RFID automation.
Lesser errors mean no refilling of orders and hence larger cost savings.
Shorter Lead-times
RFID technologies can reduce lead times in the following areas:
Flexibility when taking readings

Goods can be positioned anywhere and still be tracked / identified. Thus the
elimination of the need to be in sight of the scanner results in more flexibility
Increased Accuracy and Reliability of Reading
RFID technology result in highly accurate and reliable readings obviating the
necessity of re readings resulting from faulty data readings.
Multi-read capability
RFID technology is able to read several goods items at the same time
Improvements in the above three result in shorter lead times and a more efficient supply
chain process.
Transparency
RFID provides a highly transparent information flow system that provides all the
stakeholders in the supply chain with accurate and real time data which can be used for
making decisions.
Durability
Bad Weather conditions such as rain, dirt on labels, damaged labels result prevent
effective functioning of bar code scanners. These problems are eliminated with RFID
technology
All of the above make RFID technology most suited for used in warehousing particularly
in cross docking applications which involves processing of large amounts of varied forms
of data, efficient tracking, loading and unloading mechanisms.
1.6. Disadvantages of RFID Solutions
According to Nakamoto & Yamazaki (2009) despite their manifold advantages, RFID
technology does suffer from significant disadvantages. These include:

 High Costs
The cost of implementing an RFID solution in a warehouse with no significant levels of
automation can go upto a quarter of a million US dollars. Such high investment is
justified only in larger warehouses handling high volumes of goods traffic. Smaller
warehouses will have to seek ways to derive maximum return on investment.
Limited Visibility
Deploying of RFID read centers currently offers only two options. Stationary
infrastructure installed at choke points such as docking doors at the receiving station or
handheld devices for instant readings. This results in limited visibility since movement of
goods whilst in transit or within the warehouse cannot be tracked.
Limited Inventory Information
Since RFID readers only track goods at few choke points, this technology can provide
data only on amount of stocks inwarded or outwarded. It provides limited information on
in situ stocks. Hence quick replenishment, order fulfillment, out of stock data etc is not
possible. This in turn adversely affects customer service levels.
Non Utilization of Full Potential of RFID Technology
Because of stationary infrastructure the true potential of RFID technologies remain
underutilized.
1.7. Mobile RFIDs
Mobile RFIDs represent the latest evolution of traditional RFID technologies. It
combines the benefits of RFID with GPRS technologies that allow for anytime
anywhere tracking and identification of goods (Kocer & Flynn, 2010). It consists of a
mobile device that can read RFID tags and an application in the device that provides real
time data to customers and to the warehouse facility through GPRS technology. The
solution also incorporates special RFID tags that can be attached to moving vehicles,

anywhere in the warehouse, mobile carts etc and connected to the reader through a
special server.
According to Pillai & Henrich (2009) benefits accruing through Mobile RFIDs include
the following:
Improved & Flexible Technologies
Wireless Connectivity in Real Time
Small and Compact size designed to fit anywhere
Flexible read times to handle goods at different locations
Efficient batteries incorporated on the device.
The devices can be operated by themselves or through interface with other
devices and applications. This allows for use of varied kinds of with extended
data processing abilities.
Rugged & Strong design these devices are rugged, can withstand rough
treatment and extreme environments. Hence they can be used in various
conditions.
Improved Inventory Visibilities
Mobile RFID devices provide real time data on the movement and location of goods.
Information on reduced inventory levels can be instantly obtained leading to
replenishment and hence prevent loss of sales and improved customer service. Mistakes
in put away, picking and shipments are also reduced. Better stock planning is enabled.
Increase Automation leading to Improved Productivity
A mobile RFID is an extension of RFID technologies enabling increased automation of
more and more supply chain processes. This eliminates paperwork. Stock taking, order
tracking, deliveries, inventories etc can all be automated with Mobile RFIDs with
minimal error increasing productivity levels.

Improved Management of Assets

All assets or goods with RFID tags can be quickly tracked or located. This allows for
quicker identification, loading, transfer timelines and improved overall asset
management.
Utilization of Existing Technology
While installation of Mobile RFIDs is a large investment, it can leverage on existing
infrastructure already in place at the warehouse. Eg. An existing Wireless LAN can be
used for the transmission of RFID data from the mobile RFID reader to the centralized
server. This improves ROI of existing technologies.
Good Return on Investment
There are various ways in which Mobile RFIDs provide good ROI.
While stationary RFIDs can be used only for certain times in a day, Mobile RFIDs can
be used all the time increasing usage efficiencies of both readers and the whole system.
The number of goods that can be read per second increases dramatically.
Multipurpose Utility
Mobile RFIDs are designed for use anywhere in the enterprise. Hence they can be used
across different devices / areas unlike fixed RFID systems.
Low Cost of Implementation
Mobile RFID devices are self-contained units that do not incorporate any wiring, cables,
antennae etc. Hence maintenance costs are reduced to a minimum. Moreover they
incorporate various mechanisms like Velcro that permit quick installation across different
locations in the warehouse.

Less Management & Support effort

Since the Mobile RFID is a self contained unit incorporating WLAN, power and
transmitting technologies. This results in reduced cost and time needed to manage and
support the devices.
Reduced Total Cost of Ownership
Since Mobile RFIDs offer high performance, low maintenance and installation
capabilities, their total cost of ownership is reduced.

Improvement in Strategic Business Value

Real time data provided by mobile RFIDs can be used to reduce inventories. This in turn
positively impacts capital investments, improves inventory turns and overall profitability.
Reduction in inventory increases the storage areas of warehouses allowing expanded
resource allocation capabilities (Rao & Nikitin, 2008).
Thus with the plethora of operational and ownership benefits, Mobile RFIDs hold the
potential to become the next technology of choice in warehouses.
1.8. Challenges in Mobile RFID Implementation
Despite their advantages, large scale implementation of Mobile RFIDs is fraught with
challenges. The primary challenge is the management of these devices. Since they are
used throughout the facility, all the time, they have to be constantly monitored
(Balachandran & Barnett, 2009). Breakdowns if any have to be serviced. Updated
technologies have to be incorporated on them to increase efficiencies. All of these have
significant cost implications.

Implementation of Mobile RFIDs places significant demands on the infrastructure

requirements of a facility (Deighton & Lee, 2010). This can result in complications if not
properly handled. Management of two radio frequency technologies involved, Wireless
LAN and RFID calls for specialized technical knowledge.
Moreover organizations with expensive RFID technologies already in place need to
determine the worth or feasibility of implementing Mobile RFIDs. Whether mapping
flow of goods in currently non visible areas will result in significant business value needs
to be first determined (Deighton & Lee, 2010).

1.9. Summary of the Literature Review

Delivering good Customer Service helps companies build sustainable competitive
advantage which is important in an increasingly competitive business scenario.
A measure of good customer service is prompt delivery of goods to clients
Hence supply chain efficiencies are receiving increased focus by management
Warehousing forms an important part of supply chain management.
Critical to the proper functioning of the warehouse is the efficient tracking and
identification of goods.
Hitherto a manual operation, tracking of goods is currently done by bar codes.
Bar Codes while an improvement over manual operations suffer from
disadvantages such as high lead times, inaccuracies, manual operations etc.
RFID technologies offer significant advantages over bar codes. They allow for
faster identification and tracking of goods, data collation and management, lean
lead times, lesser costs and improved productivities.

 RFID technologies are however expensive to implement. Moreover their use is

limited to docking gates or to the unloading/ unloading stations. This results in
limited visibility and formation of dead zones in the warehouse.
Mobile RFID technologies are the latest technologies that combine RFID
technology with GPRS that allows for anytime anywhere tracking of goods.
This facility extends the existing capabilities of RFID technologies as also
increasing operational and business capabilities of the warehouse.
However implementation of Mobile RFIDs is still at a nascent stage. Companies
have to justify the expense of implementation and successfully tackle challenges
such as providing adequate maintenance and technological support.

The Gantt Chart

Significant Milestones

Identification of Research Topic

Collection of Literature Sources
Determining Aims and Objectives of the Dissertation
Evaluation of Current Performance Levels at Hollister Logistics
Conducting Experiment to determine Feasibility of Mobile RFID Implementation
Analysis and derivation of conclusion
Publishing of Results in Dissertation

Tasks Completed till Date

The Main Research Question, Aims and Objectives of the Dissertation have been
identified. The initial proposal has been okayed by the supervisor.
Data Sources have been collected and a summary literature review prepared.
The advantages and disadvantages of RFID have been obtained through
theoretical study. The advantages of Mobile RFIDs have also been listed.

 The Challenges inherent in Mobile Implementation have been identified.

Tasks to be Completed
The current RFID operations at Hollister are to be studied and the shortcomings
highlighted
Experiment to determine Feasibility of Mobile RFID implementation to be
conducted
The Operational and Business Advantages that can accrue on account of Mobile
RFID implementation to be studied
The challenges in Mobile RFID implementation to be ascertained in practical
situations, i.e. w.r.t. Hollister Logistics.
The findings of the experiment to be summarized and published in the
dissertation.

GANTT CHART
August 11

September 11

October 11

November 11

December 11

Approximate Time-line
Early
Identification of Research
Topic, Determination of
Aims & Objectives.
Collection of Literature
Sources
Writing of Introduction,
Research Question, Aims &
Objectives, Literature
Review.
Configure the experiment
set up at Hollister
Logistics. Study the current
RFID implementation.
Identify advantages &
disadvantages
Conduct Mobile RFID
feasibility experiment at
Hollister Logistics. Collect
Data, Analyse, Derive
Conclusions.
Publish results of
experiment in Dissertation.
Write out conclusion and
recommendations about the
feasibility of Mobile RFID
implementation in
Warehouses

Mid

End

Early

Mid

End

Early

Mi
d

End

Early

Mid

End

Early

Mid

End

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