Forces and Trends in Business

January 15th, 2012 by admin No comments »

The corporate environment is characterized by a number of variables: competition, dynamism, turbulence, complexity and change. All organizations must develop ability to continuously and consciously transform themselves and their contexts. Such contexts include restructuring for optimum effectiveness, reengineering key processes and streamlining functions that are able to provide a source of competitive advantage. The aim is to adapt, regenerate and most important, survive. (McLean, 2006).

For a company to thrive today, strategists must find ways to increase the organization’s ability to read and react to industry and market changes. They must know their goal to boost the company’s strategic flexibility by recognizing disruptions earlier and responding faster.

Strategic flexibility or adaptability can be defined as the organization’s capacity to identify major changes in its external environments, quickly commit resources to new courses of action in response to such changes, and to recognize and act promptly when it is time to halt or reverse existing resource commitments. Being adaptable means leaders must not get stuck in a too-rigid way of looking at the world. The organization must view change as an inevitable and essential part of an organization’s growth, in order to achieve this adaptability.

When there is uncertainty or unpredictability in the environment, managers tend to focus almost all their energy on successfully executing the current strategy. What they also should be doing is preparing for an unknown future. Flexibility stems from the ability to learn; managers tend to overlook the negative and emphasize the positive. They need to understand not only what led to the positive outcomes but also what led to the negative ones. This will optimize their learning experience. According to Ford (2004) four points to foster and maintain adaptability include challenging complacency, giving all employees a voice, encouraging participative work and driving fear out of your group.

The companies chosen for this task vary by industry: a famous automobile manufacturer (Ford) a bank going through a merger (Compass) and a start-up software company (DawningStreams). Ford and Compass have been in business for a long time; it is likely they have changed their strategic plan based on changing forces and trends. DawningStreams is new (established in 2005 and incorporated in 2007). Even though they have not had their first sale and have no staff, the owners have devised several iterations of their strategy.

There is a diversity of stakeholders all that are interested in the activity of business organizations. Emphasis must be placed on their adaptability in strategic analysis and their adaptability in strategic management of business organizations. The organization must have a strategic management model.

Each company might scan the same areas, but for different reasons. Considering technological advances, Ford would prepare itself to lead the market by having various electronic equipment in their vehicles, as well as robotic equipment with which to build them and the supply chain technology to keep all in check. Compass Bank is going through a merge and expanding globally; therefore they will need to keep abreast of communication technology. DawningStreams is a software company; they will need to monitor those companies who would be their competition to ensure their product offers better functionality. All three companies would make sure potential customers would be able to get good information from internet websites and advertisement, which encompasses yet another area of technology the organizations may need/want to scan. In this instance, many members of the organization must be enrolled: upper management and finance, who will determine budgetary factors; the IT department, who will be responsible for the implementation and maintenance of some of the technology; the staff who must be trained to use the technology; a sales force who will sell the technology.

To the outside observer, it may seem unnecessary for any but Ford to scan the (actual) environment when it comes to issues such as emission control, fuel efficiency and hybrid cars. That is true however; Compass Bank and DawningStreams can plan a strategy to be friendlier to the environment (and their pocketbooks) by practicing paper reduction (through the aforementioned technology). Lastly, DawningStreams’ product may be useful as a file sharing service to environmental groups.

With regard to the legal environment, all three must be acutely aware of laws, which affect their respective industry among others. To Ford, legal applies, among other areas, to environmental protection laws and department of transportation safety laws. To Compass Bank, they would abide by the rules of the Federal Reserve (www.federalreserve.gov) and the Federal Insurance and Deposit Corporation (www.fdic.gov). DawningStreams must follow laws as they pertain to the transfer of files, which have intellectual property and also the export of products, which have algorithms. All three companies are global and will need to monitor those laws in other countries, which could effect the strategic planning.

At one company after another–from Sears to IBM to Hewlett-Packard to Searle, strategy is again a major focus in the quest for higher revenues and profits. With help from a new generation of business strategists, companies are pursuing novel ways to hatch new products, expand existing businesses, and create the markets of tomorrow. Some companies are even recreating full-fledged strategic-planning groups. United Parcel Service expects to spin out a new strategy group from its marketing department, where strategic plans are now hatched. Explains Chairman Kent C. Nelson: “Because we’re making bigger bets on investments in technology, we can’t afford to spend a whole lot of money in one direction and then find out five years later it was the wrong direction.”

In such a world we need a planning model that allows us to anticipate the future and to use this anticipation in conjunction with an analysis of our organization–its culture, mission, strengths and weaknesses–to define strategic issues, to chart our direction by developing strategic vision and plans, to define how we will implement these plans and to specify how we will evaluate how well we are implementing these plans. The fact that the world is changing as we move forward in the future demands that the process be an iterative one.

Ford Motor Company – Socio-cultural

Ford Motor Company embraces the socio-cultural changes taking place to allow the company to move in the right direction with respect to attitudes in the society. Two areas that stand out in terms of socio-cultural attitudes would be that of fuel economy and smaller cars. The growing concern by the public for better fuel economy has influenced the company’s introduction of the Ford Escape Hybrid and Mercury Mariner Hybrid. The organization is committed to the hybrid to improve fuel economy as a global strategy to meet customer demands. The increased demand in society for such environmentalism has assisted in the decision for Ford Motor Company to look forward to adding the hybrid feature to the Ford Fusion and Mercury Milan and continue in such a strategic planning direction.

The customers that use these vehicles get a substantial break on their insurance in many states and a tax credit as well while enjoying the increased mileage of a vehicle that runs on gasoline and capabilities for 100 percent electric power. The environmental scanning by Ford Motor Company has allowed the company to be knowledgeable of the fact that the people in the United States are buying more small cars today than any other type of vehicle segment. The lifestyles changes have been monitored and there is good data that shows that such a trend will continue in this direction and the expected growth in this segment will continue. The company has redesigned the inside and outside of the Ford Focus to set the car apart from the competitors in the small car segment while increasing upgrades and features to experience positive outcomes. The direction that the company is taking is based on a competitive advantage and being a leader in the industry. The vehicle line has both a sedan and a coupe to attract targeted markets including younger buyers at an entry level to build upon brand loyalty and customer retention. Ford Motor Company will continue to use the socio-cultural factors to drive the business and enjoy future success.

Ford Motor Company – Legal –

Ford Motor Company with regard to the Environmental Protection Agency adheres to the legal aspect of environmental scanning. Ford Motor Company accepted an award in March 2007 from the Environmental Protection Agency called the Energy Star 2007 Partner of the Year Award in Energy Management. The company is the first automaker to have ever been awarded the award two years in a row. The award has come to be presented due to the commitment made by the company to increase energy efficiency and to reduce the greenhouse gas emissions from all of the facilities in the company.

The organization is committed to the responsible use of resources and energy efficiency. The leadership realizes that the environmental protection laws are of great importance and use the environmental scanning to move in the right direction to obtain future success in the company. In 2006 alone the company has improved the energy efficiency in the United States operations by five percent and saving approximately $25 million with enough energy saved to equal 220,000 homes. The effective energy management protects the environment and reduces the greenhouse emissions. Some of the actions taken by the company include replacing lighting fixtures that use 40 percent less energy and using different low-energy, long-lasting compact fluorescent lamps in the properties to include the plants, corporate offices, distribution centers, and research and development campuses. Due to the environmental scanning that takes place at Ford Motor Company the company will use the information that is collected and continue in this direction. New projects for the company include Fumes-to-Fuel that is a system that converts paint fumes into electricity that is being performed with Detroit Edison along with attempting to consolidate the application of primer, base and clearcoat paint applications into a single application to eliminate the need for separate applications and ovens. In addition to the paint booth emissions Ford Motor Company will continue to rely on alternative energy sources such as landfill gas and wind and solar technologies to power their manufacturing facilities.

Ford Motor Company – Technology –

Another environmental scanning tool that Ford Motor Company monitors and uses would be the technological portion. The company has invested $1 billion in the latest technology for flexible manufacturing. The technology that is involved is in many forms to include wireless technology that is installed on the delivery trucks with supplies to the plant as a monitoring status and improved efficiency to reduce inventory. The flexibility of products in the same plant allows the organization to use the same machinery and process for all areas from body assembly, paint facility, and final assembly. The improved efficiency at the manufacturing facility allows for several vehicle platforms to be built on the same line to produce multiple models and quickly change the vehicle mix, the volume, and options based on customer demand.

The technological changes that are being embraced by Ford Motor Company through environmental scanning enables the company to experience huge cost savings through new product launches and 50 percent reductions in cycle changeovers along with waste reduction. Robots are among the technological changes that are being experienced within the organization to include the 400 from the project that are used to weld and assemble the metal body of the vehicle for stamping and assembly. Artificial intelligence in the form of advanced visions systems and laser tracking systems are used to ensure quality through accuracy and dimension abilities. A multi-million dollar training facility is used to ensure that the workforce has the knowledge, skills, and ability to reap the benefits from the new technology that is being used by the company. The training that is administered includes the new servo-electric weld gun system that identifies the perfect center for welding that has replaced the older and loud air-powered system that used a less sophisticated spring system. The environmental scanning of technology that is performed by Ford Motor Company has allowed the company to have positive outcomes in efficiency while remaining a competitive company in the industry through cost savings and continuous improvement.

Compass Bank- Political -

On February 16, 2007, Compass Bancshares, Inc., the parent company of Compass Bank, announced the signing of a definitive agreement under which Banco Bilbao Vizcaya Argentaria, S.A. (NYSE: BBV Madrid: BBVA) (”BBVA”) will acquire Compass for a combination of cash and stock. Compass will become a wholly owned U.S. subsidiary of BBVA and will continue to operate under the Compass name. The transaction is expected to close during the second half of 2007, pending customary closing conditions, including necessary bank regulatory approvals in the U.S. and Spain and the approval of the stockholders of both Compass and BBVA.

BBVA, which operates in 35 countries, is based in Spain and has substantial banking interests in the Americas. The transaction will facilitate BBVA’s continued growth in Texas and will create the largest regional bank across the Sunbelt. Upon completion of the transaction, Compass will rank among the top 25 banks in the United States with approximately $47 billion in total assets, $32 billion in total loans and $33 billion in total deposits. In addition, the combined company will rank fourth in deposit market share in Texas with $19.6 billion in total deposits and 326 full-service banking offices.

Compass is a $34 billion Southwestern financial holding company that operates 415 full-service banking centers in Alabama, Arizona, Colorado, Florida, New Mexico and Texas. Compass provides a broad array of products and services through three primary lines of business – Corporate Banking, Retail Banking and Wealth Management. Compass is among the top 30 U.S. bank holding companies by asset size and ranks among the top earners of its size based on return on equity.

Under the terms of the definitive agreement, which has been approved by the board of directors of Compass and the relevant bodies of BBVA, Compass will become a wholly owned subsidiary of BBVA. After closing, BBVA intends to merge its U.S. based banking affiliates – including the former operations of Texas Regional Bancshares, State National Bancshares and Laredo National Bancshares – with Compass.

The aggregate consideration is composed of a fixed number of approximately 196 million shares of BBVA common stock and approximately $4.6 billion in cash. The merger is subject to customary closing conditions, including necessary bank regulatory approvals in the U.S. and Spain and the approval of the stockholders of both Compass and BBVA. The transaction is expected to close in the second half of 2007.

The merger between both companies will be determined by the political factors ranging from implications of laws and regulations to the state of world politics including the consideration of wars which may be going on in different parts of the world. New laws, regulations, tax programs and public policy create forces and trends, which may provide challenges and barriers or opportunities for any company or organization.

Compass Bank – Technology –

Ford is in the process of implementing a laser marking system on its production line to ensure the highest standard on each transmission assembled. The system will be checking for quality on different points on the assembly line. Ford is teaming up with a company called MECCO to implement this process and a trial run of the new system will last for 3 months. MECCO is a leader in its industry when it comes to laser technology. The decision to implement this new laser marking system came because it is more cost- effective and safer than previous ways of marking checkpoints for quality.

Although this process at Ford has not officially been implemented yet, Compass Bank can learn a few different things. It may be a good idea for Compass Bank to do a short trial of online cell phone banking to see how popular it becomes and if it worth all the time and effort, being spent to get it launched. Compass Bank should also consider investing into a company who is the best at what they do, is in the same time zone, and can meet their demands in a timely manner, not simply because they may be cheaper. Finally, Compass Bank can learn that they need to consider what will be most cost-effective and in the best interest of the company over time. Organizing a time line and a list of costs and potential risks would also be beneficial to Compass Bank so they know what to expect and when with the implementation of online cell phone banking.

When completing the global scan one looks for emerging new technologies which may impact any business in any industry. At one time the emergence of the Internet was a technology that was becoming an emerging trend across all industries. Today very new technologies are used to develop information systems at a fraction of the cost and time of processes that were used five years ago. Wireless is a telecommunications technology that may have moved from a trend to a force in revolutionizing the way information is stored, accessed and used across all industries around the world. Some, if leveraged by a company within an industry before competitors use it, may even provide a competitive advantage.

Compass Bank – Competition –

Although mergers may be costly and rather difficult, the value it creates in the end is the desired outcome companies seek. The eagerness to merge is based on several beliefs, those beliefs are, that the performance gains are greater, expenses are reduced, market power is increased, and shareholder’s wealth is also greater than before. The value of a merger is enhanced when the overall benefit is more valuable than the aggregate of two separate pre-merger companies.

In the end, both John and Bernard should consider this before finalizing a decision. When Zion’s purchased Stockmans, there overall value increased by 43 branches. These branches will help performance and brings much more power to the financial market. In the Journal of Money article, Pilloff states “Companies are more willing to acquire others to avoid being acquired themselves.” Keeping this in mind, companies must figure out a cross border strategy.

As part of the broad environmental scan, it is important to identify the internal capabilities of the organization. There are various models for defining capabilities. Most focus on the broad set of intangible assets such as brand, human capital, organizational capital and even relationship capital. Others include the more concrete assets such as available capital, the organization structure, current technologies and information technology infrastructure. In addition to doing a broad environmental trend, Compass Bank needs to do a more detailed capability assessment using any of the models available.

DawningStreams – Competitors –

Business activities are becoming more and more complex to manage, because of distance, time zones, number of parties involved in projects, number of tasks to achieve, multiple prioritizations, lack of general synchronization, insufficient secure and confidential communication channels and growing complexity of IT infrastructures. The use of task list managers has become very common. It is becoming more difficult to keep teams synchronized, to follow and to implement new business processes and to exchange sensitive information confidentially. The DawningStreams software application is aiming at increasing the practicality of daily executive activities. The types of business, which will most probably be interested in our product, are construction (size of network), consulting (need for synchronization), pharmaceutical research (secure exchange of information) and the software industry (complexity of manufacturing).

Many companies have already developed software applications that enable secured communications and file sharing. However, most, if not all, are relying on Microsoft technologies, which prevent them from expanding to Mac or Unix users. DawningStreams is developed in Java, which can be used on any platform, including Mac and Unix. Microsoft has acquired the Groove Company and has released a new version of the product, which can perform many of the functionalities of DawningStreams, but not generic activities (http://office.microsoft.com/en-us/groove/default.aspx). This is our closest competitor by far. More recently, we found, merely by accident, a company called Shinkuro (www.shinkuro.com), which offers the file sharing aspects of DawningStreams but lacks other capacities.

Although DawningStreams will face competition from many existing players, the fact that it will combine a super-set of functionalities in one application, for a very reasonable price, will give it some leading edge over other competitors. If the US patent is granted, the position of DawningStreams will become a niche. Even if the patent were not granted, it would take a profound architectural redesign of Groove (or other competitors) to include generic activities and match the offer of DawningStreams. As a strategy we will monitor the activities of those companies’ websites and understand what they offer in terms of similar functionality and try to ensure we match or best those functionalities to the best of our ability and resources

DawningStreams – Political -

Maintaining the secrecy of information is the fundamental function of encryption items. Persons abroad may use such items to harm US law enforcement efforts, as well as US foreign policy and national security interests. The US Government has a critical interest in ensuring that persons opposed to the United States are not able to conceal hostile or criminal activities, and that the legitimate needs for protecting important and sensitive information of the public and private sectors are met. Since 2000, US encryption export policy has been directed by three fundamental practices: technical review of encryption products prior to sale, streamlined post-export reporting, and license reviews of proposed transactions involving strong encryption to certain foreign government end-users and countries of concern. US encryption policy also seeks to ensure that American companies are not disadvantaged by the European Union’s “license-free zone.” (Bureau of Industry and Security, 2007).

DawningStreams will contain cryptographic functions. Any reliable and efficient cryptographic system requires a central authority to avoid identity theft. Cryptography is a key functionality of DawningStreams. All specialists insist on designing systems using well-studied algorithms and fully tested protocols; novelty is considered a source of risk. The cryptographic layer of DawningStreams will rely on a dual public-private key system. The private key encryption system will implement Rijndael, the Advanced Encryption Standard (http://csrc.nist.gov/CryptoToolkit/aes/rijndael/), the public key system will implement RSA (www.rsa.com) and the hashing function will implement the 256 bits version of the Secure Hash Algorithm (http://secure-hash-algorithm-md5-sha-1.co.uk/ ).

Encryption products can be used to conceal the communications of terrorists, drug smugglers, and others intent on harming U.S. interests. Cryptographic products and software also have military and intelligence applications that, in the hands of hostile nations, could pose a threat to U.S. national security. The national security, foreign policy, and law enforcement interests of the United States are protected by encryption export controls. These controls are consistent with Executive Order (E.O.) 13026, which was issued on November 15, 1996, and the Presidential Memorandum of the same date. (Bureau of Industry and Security, 2007).

DawningStreams also plans to be an international company, as offices now exist in the Netherlands and the US. As part of the strategy, we will ensure we remain compliant by registering our product with any necessary agency and allowing those agencies access to the processes if they feel there is a threat. We will be responsible to monitor (as best as we can) our client base and to put the proper verbiage in our contracts that illegal activities will not be tolerated. We will continue to monitor the BIS site mentioned in previous paragraphs and also sites in the European Union such as the Crypto Law website of legal expert Bert-Jaap Koops (http://rechten.uvt.nl/koops/)

DawningStreams – Technology/Intellectual Property –

The management of organizational strategy requires a comprehensive assessment of the macro environment of the business. Intellectual Property (IP) refers to the original ideas and innovations evolved by an organization in order to haul up its systems and processes. Creation of ideas requires large investments. This necessitates the protection of IP. Benchmarking is the continuous process of measuring products, processes, and systems of an organization against those that are rated best in the industry. It helps in uncovering weaknesses and flaws in the organizational systems, processes, and products. (Watson, 2003)

The study of the global research conducted by McAfee Inc. and MessageLabs Ltd. on security threat in small businesses in the U.S. reveals that 80 percent of small-and-medium-sized businesses (SMB) believe that an information technology (IT) security failure would be damaging in attaining their business priorities. Yet, only few are courageously making steps to fight against infringements due to resource limitations from other business related priorities. The research implies that company size plays an essential part in the way senior management views security. Among the challenges that SMBs face include keeping up-to-date with security solutions and keeping costs low. Small-to-medium businesses’ behavior towards security is very tactical and meets only immediate requirements. (unknown, 2007)

DawningStreams’ relevance to these forces is two-fold. We are a software company—there is an opportunity for us to lose the intellectual property by those who would download and attempt to modify the code. We have competitors who offer functionality similar to ours, however we offer an additional functionality the others do not. It is this ‘specialty functionality’ for which we applied for a patent the United States Patent and Trademark Office. If the patent is granted, there is less likelihood of software piracy or the loss of our IP. Environmental scans should show us if there are other companies trying to do this.

The functionality, which most resembles our competitors’, is the ability to share files. That brings in a different concern with intellectual property- the possibility someone else’s IP could be sent from one of our users to another, as this could seriously damage our reputation, as what happened with Napster. (www.napster.com).

Conclusion

References

Bilek, E. (n.d.) Compass Bankshares to be Acquired by Banco Bilbao Vizcaya Argentaria, S.A.,

Investor Relations. Retrieved from the Internet on March 31, 2007 at

http://media.corporate-ir.net/media_files/irol/77/77589/bbvarelease.pdf

Cole, Jim. Zions makes small deal, cites growing Arizona market. American Banker, 171(175), 1-1. Retrieved March 31, 2007 from Proquest Database.

Ford Motor Company (2006). Ford Motor Company. Retrieved March 2007,

from the World Wide Web, Web Site: [https://ford.com]

Ford, S. (2004) Adapted from 13 Skills Managers Need to Succeed, Harvard Business School

Press. Retrieved March 31, 2007 from EBSCOHost Database.

Hockenberry, Todd. (2006). Ford implements advanced laser marking. Industrial Laser Solutions, 21(4), 6-7. Retrieved March 31, 2007, from EBSCOhost database

Jacobs, P. (2005) Five Steps to Thriving in times of Uncertainty. Negotiation (p.3) Retrieved

April 1, 2007 from EBSCOHost Database.

McLean, J. (2006) We’re going through changes! British Journal of Administrative Management

54. Retrieved March 30, 2007 from EBSCOHost Database.

Pearce, J. & Robinson, R, (2004). Strategic Management: Formulation, Implementation, and Control. [University of Phoenix Custom Edition e-text]. The McGraw-Hill Companies. Retrieved March 2007, from the University of Phoenix, Resource, MBA 580-Strategies for Competitive Advantage Course Web Site: https://ecampus.phoenix.edu/secure/resource/resource.asp

Author Unknown, Strategic Planning, After a decade of gritty downsizing, Big Thinkers are back in corporate vogue. (2006) Retrieved from the Internet at http://www.businessweek.com/1996/35/b34901.htm

Unknown (2007) 80% of Small-to-Medium Sized Firms Fear a Security Threat. Computer Security Update 8 (4). Retrieved March 30, 2007 from EBSCOHost Database.

Unknown (2006) Strategic Planning, After a decade of gritty downsizing, Big Thinkers are back

in corporate vogue. Retrieved from the Internet at

http://www.businessweek.com/1996/35/b34901.htm

US Department of Commerce (2007), Encryption (ch.10, section 742.15). Retrieved March 27, 2007 from the Bureau of Industry and Security Website at http://www.bis.doc.gov/news/2007/foreignpolicyreport/fprchap10_encryption.html

Watson, G. (2003) Business Environmental Scans for Intellectual Property Strategy (PowerPoint Presentation). Retrieved March 28, 2007 from the Oklahoma State University website at http://www.okstate.edu/ceat/msetm/courses/etm5111/CourseMaterials/ETM5111Session3Part2.ppt#260,1,Business Environmental Scans for Intellectual Property Strategy

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Pros and Cons of RFID Technology

December 31st, 2011 by admin No comments »

I. RFID Advantages

Radio Frequency Identification provides a valuable service that is capable of revolutionizing the way companies track products. There are many benefactors of this technology: the military, retailers, suppliers, consulting firms, producers of the technology, and consumers. RFID provides companies with a better alternative to bar-coding because no line-of-sight is needed to read a pallet, a carton, or a product with a RFID tag. RFID tags also contain information on the product that is easily readable and accessible for the reader. RFID will also begin to automate company’s supply chain, reducing labor costs, human error and time spent checking in products.

In 2005, manufacturers and suppliers requesting new bids from the military must be RFID compliant on four different levels: packaged operational rations, clothing, tools, and weapon system repair parts and components. The military requires that all cartons and pallets are shipped with a Military Shipping Label which displays shipping data. The Department of Defense has created the RFID Military Compliance Solution as a way to help suppliers and manufacturers meet the military’s new standards for RFID. The program is run by Avery Dennison Retail Information Services, and they were commissioned by the RFID Military Compliance Solution. Avery Dennison Retail Information Services sells the RFID tags to companies which must be affixed close to the Military Shipping Labels to comply with Department of Defense regulations.

The U.S. military is saving an enormous amount of money by using active and passive RFID systems. By using RFID for communication and transportation systems in Iraq and Afghanistan, the military is able to diagnose and fix problems much faster than before. The implementation of RFID in just this area will save the military close to half a million dollars this year. The U.S. government has contracted IBM to do research on the current RFID being used currently in the military and the potential future applications for RFID in the military. The military has been successful in creating better visibility throughout their supply chain increasing their productivity and stability.

Retailers and other companies that have a demanding supply chain can gain an advantage on the field by using RFID in the supply chain. By demanding that all levels of their supply chain be RFID capable is a sizable investment. The productivity increase that follows the initial investment and implementation for companies will pay for their investment. Wal-Mart was the first retailer to use RFID in their distribution centers and warehouses, prompting many companies to follow in their footsteps once Wal-Mart’s success was realized.

RFID is very successful with retail companies because it improves productivity, saves on human labor costs, and gives companies real-time visibility with all their products. RFID tags use an Electronic Product Code (EPC) which is an upgrade and a replacement for the Universal Product Code (UPC) system. “EPC has a 96-bit code that has digits to identify the manufacturer, product category and the individual item. Manufacturers obtain registration numbers & assign them to products. Each number is unique to a given item.”

The cost of a tag is anywhere between twenty-five to fifty cents. In the next five to ten years it could be reduced to five cents per tag. At some point in the near future tags could fall to one cent tempting companies to use RFID tags on every product in a store. Wal-Mart says that since their stores now have RFID, it makes it easier to keep store shelves stocked allowing employees to interact with customers.

Target was able to save on their investment for implementing RFID, following in Wal-Mart’s footsteps as Wal-Mart had already paved the way and suffered the pitfalls of implementing a new technology. In addition to the lower implementation costs, many of Target’s suppliers had already begun preparing for the switch over to RFID assuming Target would follow Wal-Mart. Target as a large retailer knows how important it is to be able to provide real-time data on pallets, cartons and shipments up and down-stream through their supply chain.

A break-through in RFID technology was made by Intermec, Inc. in May of 2006, with new rugged and reusable RFID tags. These tags can be written thousands of times; it can handle hazardous chemical exposure, and withstands temperatures from -50 degrees Fahrenheit to 250 degrees Fahrenheit. In October of 2006, Intermec released a new version of the rugged, reusable RFID tag, including wide-band antenna that can be used on any surface in any part of the world.

RFID makes the business world seem like a smaller place, even companies like Wal-Mart who are very big and have a large integrated supply chain. RFID enables companies to be more efficient with their time and space. Companies that combine some newer supply chain technologies with RFID could see great results. Combining auto-picking with RFID would reduce man-power needed, time needed to move pallets and cartons around a warehouse, and time needed to send pallets to their proper destination. The goal of a company’s supply chain should be to reduce time needed to be productive, by automating as much of the supply chain as possible. It reduces human error, and machines are capable of running twenty-four hours a day and cost less than human labor. The

application of RFID for a large company like Wal-Mart or Target, as well as smaller retail stores can ensure a better shopping experience with more in-stock items and a more knowledgeable store.

The RFID market is booming and many technological companies have gotten in the game producing RFID parts and systems. In many cases being a producer of RFID components and systems also allows you to become a consulting firm for the technology. Hewlett Packard (HP) is one of the largest companies developing RFID systems. HP’s goal is to make it as easy and affordable as possible for a company adopting RFID technology. HP has experience in the RFID field, as they were one of the early adopters of the technology and have been very successful integrating it into their business. HP began with two larger clients, Hasbro (produces children’s toys) and Conros (a large Wal-Mart supplier). Hewlett Packard has created two RFID Centers for Excellence, one in California and one in Taiwan, to demonstrate new potential uses for the technology, as well as how it can be implemented into a business. More centers are slated to be opened throughout the world, including Great Britain, Singapore, and Tokyo RFID Centers for Excellence.

The RFID market sits at roughly one billion dollars in 2006 and has varying estimates as to the growth potential of the market. Estimates of RFID market size in 2008 vary anywhere from $1.3 billion by IDC, to $4.2 Billion by the Yankee Group. As shown in Figure 1 in the appendix, most of the industry is made up of sales of hardware, tags, readers and other physical products of RFID. Roughly 20-25% of the market is made up of consulting work for the technology and the last 5% is made up of software for RFID. The two biggest areas firms are concentrating on are the production and consulting sides of RFID.

The biggest challenges for producers and consultants alike are the reliability and durability of RFID systems and products. It is hard to simulate the wear and tear a product will experience over time. HP has made testing RFID products one of their benchmarks, providing intense field-testing of RFID to ensure its durability and quality. A competitor of HP is IBM, who according to AMR Research is the market leader in RFID. IBM has over eleven years experience working with RFID, and like HP, they were an early adopter of RFID technology. The advantage that IBM has over HP is there world-renowned consulting services, coupled with their immense networking capabilities. IBM’s services promise more results than HP’s RFID systems mainly because of IBM’s consulting expertise. IBM works with companies to locate the best avenues to implement RFID, attempting to maximize Return on Investment (ROI) by reducing one person per shift from manually tracking products allowing them to focus on value-added manufacturing activities. IBM also focuses on other ways to improve ROI including, offering a one-time savings of $230,000 in operating costs, continuous fabrication line operations, better customer service providing real-time information on products, and less errors and delays cause by human error.

RFID began to take off once companies like Wal-Mart and Target, and the U.S. military demanded that their top 100 suppliers must adopt RFID technology. Many suppliers were not ready for a move like this, a move that would completely retrofit their current operations at a high cost to the supplier. There were some suppliers that welcomed the change in technology and already began implementing RFID in anticipation of Wal-Mart and the U.S. military’s demand that their suppliers adopt the new technology. Wal-Mart demanded that their top one hundred suppliers would need to be RFID ready by January 2005, and to Wal-Mart’s surprise, twenty three extra suppliers have volunteered to make the change to RFID. There is a new generation of tags that hit the market in 2005, called the Gen 2 Standard, which make RFID more appealing to suppliers who have no RFID systems in place. The Gen 2 RFID improves on the first generation of RFID by increasing read times, increasing read ranges, and read tags more accurately.

Suppliers and manufacturers will notice the benefits of implementing RFID into their organizations streamlining parts of their operations. Return on Investment is the most important factor for a business implementing RFID. Suppliers will see their ROI increase as human labor hours are decreased, human errors are decreased and interoperability is increased. RFID increases the visibility of the suppliers so they can do their job in real time, assuring that the correct package is sent to the correct location. It also saves money in the long-term for manufacturers and suppliers because RFID will save time spent inventorying and tracking products. An advantage for suppliers and manufacturers using RFID is customization of products in a shorter period of time. Smaller suppliers and manufacturers will have a harder time implementing RFID, as costs range from $100,000 to $5 million to implement the technology, but as costs go down more companies will adopt RFID.

RFID does have another potential benefit for suppliers that could give them invaluable information. For Wal-Mart suppliers, readers are set up at the back door so suppliers know when their shipments have arrived increasing visibility for both entities. A second reader is placed at the entrance to the sales floor so the supplier can see what is on-hand on the sales floor and in the stock room. This will allow the supplier to see which products sell better than others so that they can be replaced, and it also allows the supplier to develop more accurate sales forecasts. A secondary benefit of RFID is that the promotions that merchandisers spend a lot of money to set up are often left in the stock room for too long or are improperly placed. Now merchandisers and vendors can make sure their promotions are being handled correctly. Suppliers and manufacturers have the potential to save money on production costs, while making money on customized products.

Consumers should be the ultimate winner with RFID being implemented throughout a company’s supply chain. In the long-run, stores will save money throughout their supply chain, thus bringing down costs to consumers. Consumers should also expect to find more helpful and more informative customers service with companies that have RFID. These companies now have real-time data to share with the customer. A consumer complaint about retail stores has always been that there are too many out-of-stock items; however, with RFID in place many of these stores should see a significant decrease in out-of-stock items. Having RFID tags on certain products can also make people’s lives much easier, such as a microwave that is a reader and recognizes the tag of the food you put in and will automatically cook it according to the directions on the tag. It also helps environmentally because companies will use resources more efficiently, benefiting everyone. Once RFID tags are able to be used on food products it will make a recall on a certain item much easier and it could potentially save lives.

Consumers use RFID everyday and many do not realize the benefits they are receiving from the technology. Contactless payment is a developing technology, the card being used contains a tag and the payment area contains a reader. Mobil and Exxon use a “Speedpass” as their contactless form of payment allowing customers to wave the card in front of a reader to pay for gas or anything in the convenient store. Visa and Mastercard are the two biggest developers of this technology, claiming that it will benefit everyone from consumers to businesses. It allows people to have preset money on a card (either debit or credit) which decreases waiting time at check-out stands and increases loyalty to companies that offer this feature. Another use of smart cards is keyless entries, which is becoming a popular trend in America, using just a card and swipe it over the sensor to allow entry. RFID is a beneficial technology for consumers saving time and offering conveniences traditional bar codes, credit cards and keys cannot offer.

RFID contains many advantages over traditional ways of coding pallets, boxes and products. It allows for non-line of sight reading of the tag which stores all the product information. RFID reduces human labor costs and human errors through the supply chain saving companies money, as well as reducing theft in the store and warehouses. RFID can save lives as well if there is a recall and the recalled food item or product is tagged, then it would be easier to collect all the units.

II. Disadvantages

Radio Frequency Identification has been around for over fifty years, but it has been the rapid development and deployment of the technology over the last five years that has raised people’s awareness and understanding of the technology. While there are many potential benefits for RFID, there are many pitfalls as well. Every level that could benefit from RFID can also reap negative rewards from the technology.

The U.S. military was one of the early adopters of the technology using it for over ten years in a limited area of their operations. In 2003 they upgraded their usage of the technology by demanding that all suppliers must affix a RFID tag to every pallet, carton and big-ticket item being shipped to the military. The biggest problem the military faces is an issue of security. With complete product information on a tag it is easy for an enemy of the United States to pull information off a tag. This could result in loss of life of U.S. soldiers or even U.S. civilians if the wrong product ended up in the wrong hands. The tags could inform enemies of potential weaknesses and strengths of our military and give them a view on how to attack us at our weakest points.

Large companies like Wal-Mart and Target who use RFID face many potential problems with the technology. RFID has no proven infrastructure making it difficult for suppliers to keep up with these company’s demands to become RFID-ready. If the suppliers cannot effectively implement RFID into their business, then retailers cannot fully view their supply chain. If retailers cannot get all their information in real time across their entire supply chain, then the issues they are trying to solve will remain problems. Out-of-stock items, first-in-first-out products and last-in-last out products will still cause problems for these large retailers.

EPCGlobal is a start to an international standards body for RFID. It has yet to be approved by the International Organization for Standardization (ISO) and there is still not a global frequency standard. While 900 MHz appears to be the best frequency due to its long read-range capability, 13.56 MHz is still used delaying the standardization of global frequency for RFID. High costs of RFID implementation is the reason many mid-size and smaller retailers have not adopted the technology. The short-term outlook for companies who use RFID isn’t impressive, although long-term benefits will be realized.

Privacy issues are the number one pitfall for RFID and retailers. As long as the tags are only affixed to pallets and cartons then the retailers would not have any specific information on the consumer. However, when RFID tag prices fall, companies like Wal-Mart and Target plan on using RFID tags on individual products which they can trace consumer’s buying habits and other information consumer’s wish to keep private. It was privacy issues that force Benetton to cease their pilot RFID system. They wanted to embed a tag in articles of clothing to stop theft, determine consumer buying habits and keep their inventory at an acceptable level. Privacy advocate groups such as the Consumers Against Supermarket Privacy Invasion (CASPIAN) fight companies using RFID to track consumer behavior. A study showed that up to 78% of America was against RFID based solely on privacy issues. It will be difficult for companies in the future to tag individual items without a public outcry without some form of protection for the public’s privacy rights.

Consumers have the largest disadvantage of any other entities involved with RFID technology. There are five privacy issues that consumers must try to protect themselves from: Hidden placement of tags, unique identifiers for objects worldwide, massive data aggregation, hidden readers, and individual tracking and profiling. Hidden placement of tags by companies is an easy way to get information from consumers. The consumer will feel safe buying a product with no knowledge of an RFID tag embedded in their clothing. These tags theoretically could track a person around the world if there were readers in specific locations throughout the world. Personal information may also be embedded in these tags giving information as detailed as your medical history. Prada and Swatch use embedded tags in their clothing, and Benetton did as well, but a boycott of Benetton was successful and they removed their tags. There is no law against companies embedding tags, and only California and Utah have made official requests to change the situation.

Companies who use RFID can compile massive amounts of data on consumers, including product likes or dislikes, buying power or even prescription history. RFID makes it easy to amass this data and to designate correlations. If a corporation owns many stores they can combine data between companies and create new data on buying habits.

Hidden readers violate people’s privacy much the same way hidden tags do. Gillette and Accenture are introducing “silent commerce” which embeds tags on people’s products and readers in strategic locations without the consumer’s knowledge. These companies have experimented with different reader locations ranging from secret carpet locations to shelve locations and even hidden in floor tiles. Readers could even be installed in doorways on street lights, anywhere that people have to pass through, and instantly all information embedded in the tag is broadcast to the reader. If this were to happen privacy would be impossible because you would never know if the products you have contain tags, and you never know when you are within proximity to a reader.

The disadvantages of RFID hinge mainly on privacy concerns, technological imperfections, cost of the technology and no proven way to set up an RFID system for a company. The government and corporations are the two groups that offer the most concern for privacy issues. Hidden tags and readers threaten to take away human mystery, offering a world where people see, feel and hear only what the government and large corporation want people to.

III. Future of RFID

The future of RFID is uncertain, however, the technology is here to stay. Companies have many obstacles to overcome to make the technology a feasible option to be implemented. Privacy issues and will persist, although cost for RFID systems will decrease. In order for RFID to be successful, companies must work with privacy advocate groups to develop a fair way to implement RFID without alienating their customers.

Technology will continue to develop for RFID and many new applications will be realized. Automation will be a side-effect of RFID development, in the supply chain and in everyday activities. Contactless payment methods are already available, as well as automatic keycards to open doors. RFID tags installed in cars with readers on the roads and freeways will alert the authority if you are breaking the law. Supermarkets will eventually be able to realize their shopping cart checkout system once prices fall to a more affordable price. Fresh foods, metals and liquids will all be RFID compatible in the near future. If privacy issues are not watched closely, people will become tagged and there will always be someone watching and analyzing every person’s decisions.

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POWERVAR Solutions.flv

December 28th, 2011 by admin No comments »

POWERVAR originated the concept of The ABCs of Power Conditioning to simplify the process of understanding power protection and to help customers determine which power conditioning elements are parts of the power protection products they are using or evaluating. All of POWERVAR’s product model numbers start with one or more of the ABCs. For example, our model ABC201-11 tells you that the product is a power conditioner containing a surge diverter, an isolation transformer, and a noise filter. Our model ABCE600-11contains these same elements in addition to a battery backup – in other words, it’s a fully power conditioned uninterruptible source of power. We’ve always used the ABCs so that customers may clearly see which protection elements are found in the solutions we manufacture. POWERVAR is a global provider of power management systems, headquartered in Waukegan, Illinois, with international sales and distribution offices in the United Kingdom, Germany, Brazil, Canada, and Australia. In North America, the company markets its products through a network of independent factory sales representatives and distribution business partners. The company’s primary products include transformer-based power conditioners and uninterruptible power supplies (UPS). POWERVAR is ISO 9001:2000 registered and continues to lead the industry by creating higher standards for power quality to support the increasing use of technology in business, government and nonprofit sectors. To learn more about …

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Acetal Spur Gear 24P 20 Degree Pressure Angle, 40 Teeth x 5/16″ Bore x 1.666″ Pitch Diameter

May 3rd, 2011 by admin No comments »

Acetal Spur Gear 24P 20 Degree Pressure Angle, 40 Teeth x 5/16″ Bore x 1.666″ Pitch Diameter

Acetal Spur Gear 24P 20 Degree Pressure Angle, 40 Teeth x 5/16″ Bore x 1.666″ Pitch Diameter Feature

Acetal Spur Gear 24P 20 Degree Pressure Angle, 40 Teeth x 5/16″ Bore x 1.666″ Pitch Diameter Overview

Delrin Spur Gears have the advantage of being quiet, non-corrosive, lightweight and shock resistant. Useful for both continuous movement and in static control systems where only a quarter or half turn is made. They may be used in train with brass, steel or cast iron gears. Furnished with bored hub – but not drilled for pin or tapped for set screw. Color: Natural.