Cloud Computing Solution and Services for RFID Based Supply Chain Management

Advances in Internet of Things, 2013, 3, 79-85

http://dx.doi.org/10.4236/ait.2013.34011 Published Online October 2013 (http://www.scirp.org/journal/ait)

Cloud Computing Solution and Services for RFID Based

Supply Chain Management

S. M. Khalid Jamal1*, A. Omer1, Asiya Abdus Salam Qureshi2

1Department of Compu t e r Scie nce, UBIT, University of Karachi, Karachi City, Pakistan

2Department of Compu t e r Scie nce and Software En gi n e e r in g , University of Hail, Hai l, KSA

Email: *s.m.khalid@uok.edu.pk

Received July 31, 2013; revised September 5, 2013; accepted September 23, 2013

cense, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

ABSTRACT

Deploying and Implementing RFID Systems for tracking and controlling products in supply chain management is not

affordable for small and midsized companies due to its complexity, cost, and difficulties pertaining data management

and maintenance. Cloud computing can be used to mitigate the risks associated with the implementation and deploy-

ment of RFID based on system in su pply chain management because the complex system for data filtering, management

and maintenance can be implemented on the cloud that otherwise requires the purchase of new hardware, staff and pro-

fessional services.

Keywords: Cloud Computing; RFID; Tags; Readers; Barcodes

1. Introduction

Radio Frequency Identification (RFID) is a prevailing

technology that uses radio waves to monitor and control

the products in supply chain management. Each product

has a tag affixed to it during manufacturing process

which contains a unique identifier that can be used to

uniquely identify a product by all supply chain partici-

pants. The deployment as well as implementation of

RFID systems has been a challenging task for small and

medium sized enterprises (SMEs). In this paper, we pro-

pose cloud computing solution to overcome these chal-

lenges. The supply chains can install RFID solution

much faster by using the cloud implementation while

avoiding many of the expensive infrastructure cost re-

quired for pre-cloud systems.

RFID technology has been introduced across a range

of industries, including public sector as well as inretail

and manufacturing. For example, RFID has been used by

Harley-Davidson and Toyota to monitor parts for their

motorcycles and automobiles, respectively. Furthermore,

baggage at Las Vegas Airport is tagged to enhance and

improve loading procedures as well as the tracking of

passengers’ baggage. The US Department of Defense

and Wal-Mart hosted RFID technology a decade ago, and

required their suppliers to make all supplies RFID en-

abled, in order to ease its inventory management. For

organizations of all types, the ability to quickly locate

and enumerate products may facilitate business value of

supply chain management [1].

Small and midsized companies are unable to afford the

costs and risks associated with the implementation and

deployment of RFID systems. Therefore, we propose a

cloud computing solution so that the capital investment

and the return-on-investment risks associated with the

new technology of RFID can be mitigated. Cloud-base

services are designed in such a way as to eliminate the

hardware and software infrastructure requirements whose

implementation is time consuming as well as expensive.

Moreover, it provides abstraction to its users by hiding

all the complex details of the system. Users can only use

the provided services by interacting with application

software responsible for receiving inputs and providing

outputs. The inner workings are completely invisible [2].

1.1. Motivation

According to an estimate, the annual savings of US lead-

ing retail Wal-Mart using RFID are $8.35 billion. This

huge amount is divided as follows: it saves $600 million

by meeting timely deliv ery of goods due to real-time and

rapid information that RFID systems provide; inventory

shrinkage saves $180 million; $575 million are saved by

controlled tracking and monitoring of the products that

*Corresponding a uthor.

S. M. K. JAMAL ET AL.

prevents theft, mistakes and buyer fraud; pallets and the

need to scan each product individually which reduces the

labor cost as well as time. By implementing RFID, the

total of $3 billion annual investment is made by Wal-

Mart as opposed to $8.35 billion made earlier. The an-

nual savings in different heads are represented in the Bar-

Graph 1.

Due to its speed, accuracy and improved inventory

management, RFID technology has been widely adopted

and recognized as an emerging and affective technology

in industry and businesses. An RFID system is made of

up to following three arrangements:

 An RF subsystem, which uses wireless communica-

tion of RFID tags and readers to perform wirelessi-

dentification of tagged items over a network [3].

 An enterprise subsystem, that stores, processes and

manages the data received from the RF subsystem

through software applications designed for this pur-

pose and that makes the RFID data more powerful.

 An inter-enterprise subsystem, through which multi-

ple enterprise subsystems are connected in order to

share information among supply chain networks [4].

All RFID systems have an RF subsystem where the

tags are read in and almost all RFID systems also in-

clude some form of an enterprise subsystem. An in-

ter-enterprise subsystem is used when the information

needs to be shared across the enterprise boundaries.

Graph 1. Annual savings by Wal-Mart in different heads.

The RF subsystem is composed of two basic compo-

nents in order to iden tify the tagged items.

 RFID tags also called transponders are small elec-

tronic chips that are either attached to items or em-

bedded within them. All tags can be uniquely identi-

fied by an identifier assigned to them. These devices

may have their own storage space containing addi-

tional information about the tagged item and sensors

attached to them to monitor temperature for example

or other environmental and status conditions.

 RFID readers are dev ices that are used to retrieve the i n-

formation stored on RFID tags and i dentify each tag uni-

quely by wirelessly communicating wit h the tags [5].

Tags can be active, having their own source for power

supply or passive, depending upon the RFID reader to

supply the power necessary to transmit signals. The sig-

nal can be a simple identification number, or a complex

data stream stored in the tag’s memory. These tags can

contain information such as the expiry date, date of

manufacturing, built in sensors to track temperature or

other data [6] .

1.2. RFID in Supply Chain Management

The most data rich and intensive RFID application is the

supply chain management systems in which a tagged

product is tracked from manufacture to final purchase,

throughout its life cycle. In addition to pro cess data, data

information is also maintained in these systems, such as

the formats in which it is stored and transmitted by the

supply chain in various organizations and the database

network addresses that contains data about different

tagged items.

Supply chain management is also used in monitoring

and product control from manufacture to retail sail in-

cluding its distribution. It is typically a collection of dif-

ferent kind of application types, which includes asset

management, process control and tracking and payment

systems.

In supply chain systems, the information about the

product can be stored at every phase in the supply chain.

Tags are attached to products during manufacturing proc-

ess or soon after it to these products in id eal situation. As

the product progresses through the supply chain, the in-

formation on these tags can be altered by the supply

chain participants. Moreover, larger objects such as pal-

lets and containers can be tracked and monitored by these

systems using active tags. These tags which are affixed

on the pallets can store information about the items

shipped in each of the container. When the products are

moved out from the container the information which the

tags carry are automatically upgraded to reflect the new

information. An electronic history is also generated for

each item in the container which ensures the buyers

about the item’s freshness, enabling them to identify

S. M. K. JAMAL ET AL. 81

whether it’s useful, has expired or not [7].

Objects are automatically identified with the help of

fully utilized EPC data. It can also be used in monitoring

location and movement, and trigger events. Operational

efficiencies could be gained by a near real-time view

throughout th e supply chain, such as improved inventor y

control, increasing throughput and lowering cost of the

products [8] .

1.3. Benefits of Using RFID

 Time spent in ordering products is minimized.

 Less number of employees required for inventory

control.

 Manual entries in the inventory document might be-

come prone to errors, whereas using RFID technology

the entries are automatic and hence more accurate.

 Sales reports are created automatically.

 Overstocking in warehouses is minimized.

 Forecasting the demand for products can be per-

formed more accurately because real time data is used

for estimation of demand.

 Improved communication between suppliers and cus-

tomers.

 Reduction in costs for labor needed for database

management in inventory.

1.4. Electronic Product Code (EPC)

The Electronic Product Code (EPC) is a unique identifier

stored on the tag that can be used to retrieve more infor-

mation about the tagged item from a database. EPC is

standardized by EPCglobal (a non-profit organization)

and acts as a replacement to UPC (Universal Product

Code) numbers when barcodes are used as identifiers on

products. However, unlike UPC barcodes that refer to a

class of products, EPC refer to a specific instance of

product. A unique EPC serial code that is sav ed in th e tag

is transferred back to the reader when an EPC tag is read

by RFID reader. The product is identified through inter-

net using the facility of Object Naming Service (ONS).

The ONS matches the specific EPC code to the corre-

sponding entry on the internet that provides additional

information about the product. EPC Information Services

(EPCIS) are then used to communicate available infor-

mation in real time via EPCglobal Network. The real

time data that is exchanged on EPCglobal Network al-

lows for the tracking and monitoring of products. Unlike

the identification of classes of products as with barcodes,

EPC allows us to uniquely identify an instance of a

tagged product. A serial number embedded within the

EPC is used to uniquely identify a tagged product. The

set of EPCs within the domain of a person is referred to

as his “EPC cloud”. This EPC cloud can be used to

monitor thefts within the supply chain [9].

2. Challenges Faced in RFID

Implementation

One of the major challenges in RFID implementation is

the high cost associated with its implementation. This

includes the cost of installation of the new hardware and

software as well as the hiring of new staff for profes-

sional services required for the integration of the new

system. According to an estimate, an RFID-enabled

warehouse would cost in excess of $2 million which

makes it unsuitable, especially for Small and Medium

sized Enterprises (SMEs), to implement a fully-fledged

RFID system.

Another challenge is the lack of understanding of

RFID technology and the approaches required to inte-

grate the RFID technology into the current IT infrastruc-

ture. Capturing, exchanging and managing data from

RFID readers and integrating the data into EPCIS and

sharing data among enterprises can become a challenging

task. This makes the deployment and maintenance of

RFID systems a time consuming and complex operation.

According to a survey, two-thirds of all respondents said

they are still learning about the technology; while 26.3

percent said they have an intermediate level of knowl-

edge. The automotive industry recorded a slightly higher

level of intermediate knowledge, at 33 p ercent, while the

transportation market, at 28 percent, was slightly higher

than the average for all industries. Therefore, the low

awareness and lack of understanding of RFID systems

among stakeholders is a critical factor preventing its

adoption [10].

Another problem in RFID implementation is the heav y

volumes of data that it generates that are hard to handle.

According to an estimate, Wal-Mart produces 7 terabytes

of operational RFID data per day. Moreover, supply

chain monitoring and real time tracking requires storing

additional data that the traditionally designed databases

cannot manage. This implies additional hardware costs

needed to manage the large volumes of data generated by

RFID systems. According to an estimate, RFID based

solutions and services are expected to be adopted over

the next 18 - 24 months due to the prevailing acceptance

of cloud computing [11].

3. Proposed Cloud Computing

Implementation

Cloud computing is a prevailing technology in which

computing infrastructure, hardware, software and ser-

vices are provided wherever and whenever needed. With

the proposed cloud computing architecture shown in

Figure 1, data from the scanning system is provided to

the EPC Information System that is implemented on

cloud as SaaS (Software as a Service). The transmitted

ata is stored and managed on the cloud and is made d

S. M. K. JAMAL ET AL.

Figure 1. Cloud-based architecture.

available in a reliable manner to any application that re-

quests it. The proposed cloud computing architecture

sufficiently reduces the maintenance and support cost,

which is one of the implementation barriers, while in-

creasing overall system consistency and flexibility. Sup-

ply chains can now deploy RFID much faster while re-

ducing the time consumption and complexity of the

newly deployed system. Furthermore, the EPC Informa-

tion System can also be used to implement additional

functionality such as data warehousing.

ated. Whenever an RFID tag appears within the range of

RFID reader, RFID data is produced. The data that is

acquired by the RFID reader is then sent to the front-end

software application containing the user interface and

application program connecting the front-end and the

back-end layers in order to gain access to more services

and information that are stored and processed on the

Cloud. Since, RFID systems generate huge amount of

new data specially from sensor based active tags sending

data through cellular network, this data needs to filtered,

stored and processed before being used. A Cloud com-

puting backend-end layer is used in order to achieve all

of these objectives that is connected to front-end layer

over a network. The cloud helps supply chains to manage

heavy volumes of data. In addition, there are numerous

advantages achieved by supply chain operators and cus-

tomers which include the reduction in IT cost, removal of

the costly infrastructure necessities, elimination of the

complex technology, professional services and software

updates required leading to faster path to return on in-

3.1. Front-End Layer

The front-end portion of the proposed architecture in-

cludes the hardware implementation of RFID tags and

readers over a network, the computers with sufficient

capabilities for data storage and management as well as

the front end software applicatio n that links the p roduced

data with the cloud computing system. The front end

begins to work when RFID tags and reader communicate

over a network as a result of which RFID data is gener-

S. M. K. JAMAL ET AL. 83

vestment.

All the read EPCs are fed into the scanning system,

that will search for those EPCs in Object Naming Service

(ONS) and acquires the required information through

EPCIS (EPC Information System) implemented on Cloud.

The scanning system may be installed for example at a

retail store’s exit to scan all the products the customer

purchases and the products that customer already had

with him before purchase of new products. Since, EPCs

are affixed within the product they need not be scanned

individually as with barcodes and as EPC network stores

information about individual products, these EPCs depict

consumer habits and contribute to the business value.

The cloud-based architecture allows the IT staff to con-

centrate more on other projects rather than dedicating a

significant amount of time on RFID deployment and

management.

3.2. Enterprise Sub-System

The enterprise subsystem provides a communication pat h-

way for RFID readers and the computers that are running

the front end application. The data obtained from RF

subsystem is stored, processed and managed on these

computers. For example, a retail garments store may

have RFID system installed in which a unique identifier

is read through RFID readers that uniquely identifies the

product. The enterprise subsystem acts as a middleware

that matches the identifier to the product’s record stored

in the database. The database records information about

the product such as its price, the brand name or the

manufacturing date. The proposed architecture consists

of two layers the front-end layer composed of the scan-

ning system and the hardware implementation of tags

and readers, and the back-end layer containing EPCIS

over Cloud [12].

3.3. Back-End Layer

The proposed cloud computing architecture (presented in

Figure 1) contains back end layer which includes EPC

Information System, data storage systems, computers and

servers. The Cloud filters the data from RFID depending

upon a particular application of interest. Th is filtered data

uses the required SaaS services on the Cloud and is then

stored on a specific server. The cloud computing system

includes the relevant protocols and middleware that al-

low the networked resources, including RFID tags and

readers, to communicate with each other.

The system traffic and system is managed by a server.

Since RFID systems produce a huge amount of data, a lot

of storage space is needed in the cloud computing system

to store all the relevant information. Therefore, a copy of

all RFID information is stored on the Cloud computing

system. These copies are stored on backup machines and

the backup data can be retrieved by the central server

thus providing backup and restoration facility that was

not otherwise available on traditional systems. The huge

amount of data which was lost earlier at initial stages

because of bearing low priority due to lack of storage

space and available hardware may now be preserved and

managed on the cloud to depict more intense business

decisions as a result of using cloud computing. Moreover,

the existing resources can be more efficiently utilized

instead of demanding a need for new services and infra-

structure deployment. Cloud based RFID system pro-

vides real-time data and powerful software tools. Typi-

cally the cloud offers its users additional functionalities

such as warehouse and inventory management depending

upon the needs of an enterprise where the client pays

only for the services that are of critical importance.

3.4. Potential in the Desired Work

According to a study conducted at the end of 2012,

15,000 IT professionals have been approximated to use

cloud based services and cloud computing which is esti-

mated to increase rapidly in 2013. 61% of those queried

were reported to use some form of cloud computing,

whereas 39% of the respondents were not using any form

of cloud services. The statistics are presented in a Pie-

Chart, i.e. Graph 2.

Furthermore it is estimated that the companies spend-

ing in cloud computing will rise to $241 billion by 2020

from currently $40.7 billion. Recognizing the benefits of

Software as a Service and Infrastructure as a Service,

41% of small businesses plan to invest in cloud by the

end of 2014 relieving the company of the need for costly

capital investment and maintenance of software thus sav-

ing the costs by up to 90%. IBM’s Chief Technology

Officer reports the decrease in labor cost by 50% when

cloud services are used. 58% of the companies report that

cloud has offered them an improved control of data. Fig-

ure 2 shows the analysis conducted by Cisco Internet

Business Solutions Group (IBSG) of the Small and Me-

dium Businesses (SMB) total expenditure that is adopt-

able by cloud services (shown on the left hand side). The

Adoption of clo ud servi ces

Adopted

N ot adopted

Graph 2. Pie-chart representing cloud adoption.

S. M. K. JAMAL ET AL.

Figure 2. Between 2010 and 2015, US SMB cloud spending will increase from 16% of cloudable spending to 44%, or $16 bil-

deploy

 Since, RFID produces large volumes of data that is

ata can be stored and

oviding backup and restoration

e space and available hardware may

ided are always flexible. More

supply chains where condition based informatio n is of

lion, driven by tax and accounting applications and we b hosting.

ght hand side of the figur e depicts the rates when cloud ri

services are adapted to the spending on the left [13]. The

query regarding what proportion of today’s spending in

IT services will ultimately move to a public cloud is un-

answerable since the cloud offers on demand and flexible

expenditure in contrast to the fixed contract in usual

business scenario. Cisco IBSG research also depicts the

high consideration of SMB towards the migration to

cloud based servi ces [ 14] .

Analysis by Cisco IBSG shows that th e total SMB ex-

penditure on cloud adoptable services will rise from $31

billion in 2010 to $36 billion in 2015 whereas the ex-

penditure on actual cloud based services will rise from $4

billion to $16 billion within the same period of time [15].

3.5. Benefits of Cloud Based Architecture

 One of the biggest challenges faced in RFID -

now be preserved and managed on the cloud to depict

more intense business decisions as a result of using

cloud computing.

 Furthermore, cloud computing provides the facility of

elastic capacity which means that the storage capacity

and services prov

ment is its associated cost. The proposed cloud com-

puting solution provides its clients the facility to use

on-demand and pay as you go services. Thus, clients

will be able use RFID technology without having to

make a huge investment on the fully fledged infra-

structure. Small and Medium sized businesses that

cannot afford the cost of deployment and implemen-

tation of new technology can benefit from cloud

computing solution [1 6] .

 The clients need not invest in the hiring of new staff

or training of the current staff for the operation and

maintenance of the new complex system as it will be

provided as a service on cloud.

difficult to store and manage in traditional database

systems, this large volume of d

managed on the cloud on a specific server and is fil-

tered appropriately.

 The copies of RFID data are stored on backup ma-

chines and the backup data can be retrieved by the

central server thus pr

facility that was not otherwise available on trad itional

systems [17].

 The vast amount of data which was lost previously at

initial stages because of bearing low priority or due to

lack of storag

server resources can be allotted as and when the de-

mand increases. When the demand decreases, there is

no need to pay for the unused resources or storage

space. This way the companies that are newly adopt-

ing the techno logy can initiall y demand less resources,

thereby reducing the risk of return on investment on

the RFID system. Then depending on the ROI, either

more resources are acquired or the allotted resources

are returned if the project fails [18].

 Cloud based RFID architecture is of importance to

S. M. K. JAMAL ET AL. 85

central importance as these systems provide real time,

rapid and meaningful information sharing [19].

ovide on-demand information to

y chains can more efficiently and ac

A Smart Card Website. http://www.smart.gov/

[2] K. Finkenzeller, “RFID Handbook: Fundamentals

Applications irds and Identifi

tion,” 2nd Edons Ltd., Munich,

e Later,” Information Week, 2005.

ntati

Fourth Paradigm:

ft Research,”

letins/

.epcglobalinc.org/

ology,

,” Proceedings of

ervices and Solutions,” RFID J our -

idden Market,” Cisco

ud Com-

Development Trend,” Proceedings

4. Conclusion

This paper discusses how cloud-based solutions can be

coupled together with RFID-based sensing and monitor- http://www.fcc.gov/oet/info/documents/bul

ing systems to pr

ganizations. Suppl or-

- [9] EPC Global. http://www

[10] NIST Computer Security Guideline Publications.

curately trace products and monitor condition-based in-

formation such as expiration dates, temperature and de-

livery status thereby allowing the stakeholders to opti-

mize their supply chains and use real-time information to

make business decisions. The cloud computing solution

can benefit small and medium sized enterprises (SMEs)

because they can use RFID technology without making a

major financial investment on new hardware and soft-

ware purchase needed for data storage and management.

Since lack of understanding is one of the biggest hurdles

in RFID implementation, the proposed solution relieves

its users from the complex infrastructure requirement.

Cloud computing solution for RFID-based systems bears

the ability to revolutionize the supply chains by cutting

IT costs, overstocking and efficiently manage consumer

goods.

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