RFID is increasingly used in logistics. Discuss its advantages and Essay

RFID is increasingly used in logistics. Discuss its advantages and disadvantages from a global perspective - Essay Example On an average more than one third of a non IT company’s revenue comes from the products and services that did not exist even five years ago (Nambisan, 2009). This data is quite shocking as most of the IT companies do not even depend heavily on IT services (Tan, 2002). In the mid 1990s the introduction of IT services has enhanced the product development process of the manufacturing companies (Nambisan, 2009). The operational efficiencies of the companies are mainly due to the effective contribution of IT services. Issues related to innovative design for manufacturing units, supplying goods, schedule optimization and production process can be solved easily. The second transformation in industries took place with the invention of internet and digitization of products and services. IT has increased the revenue of companies which deal in sales of products and services and reduced their problems. IT has reduced the communication gap between customers and companies (Nambisan, 2009). Different types of IT tools have been invented to support project management and product development. ... Introduction to logistics Logistics means the organized movement of goods, services and employees. The scenario of logistics industry has transformed because of globalization. The logistics system includes inventory, warehousing, facility site location, protective packaging, cargo insurance, handling of payments etc. Initially logistics was used for military purposes but now it is used for commercial activities. Trade and commerce has increased rapidly due to logistics system. Cost associated with logistics is known as transport and insurance costs. In logistics, channels are the most important component. Distribution channel help in physical movement of goods whereas transactional channels help in contracting and trading of goods (Wood, 2004). Importance of logistics The logistics are of economic and governmental importance because it facilitates trade and balance of payment. The success of a company usually depends on the successful operation of its logistic company. (Ailawadi and Singh, 2005). Logistics is also important for defence purposes because it helps in carrying defence equipments. It has helped in planning and coordination of activities in companies. It also helps in lowering and reduction of warehousing and storage costs of the company. Therefore, we can conclude that logistics plays an important role in developing and integrating an economy (Wood, 2004). Introduction to Radio Frequency Identification (RFID) RFID is a gadget that uses wireless data to identify data from tagged objects, people and animals. RFID is a cost effective technology used by many companies to enhance the efficiency levels of the workers. The technology was incorporated by companies like Walmart and Department of Defense (DoD). In 2003, Walmart introduced this