Reducing Theft and Diversion of Electronic Devices

Oct 22, 2012On Oct. 11, RFID Journal hosted RFID in High Tech 2012, our first conference and exhibition focused on applications of radio frequency identification in the high-technology sector. It's somewhat ironic that we've been hosting events focused on RFID's use in health care for five years, and are only now starting to zero in on a sector that one would think would have embraced the technology long ago. But it's clear to me that RFID will deliver value in the electronics sector, and one key way in which this will happen will be by reducing the incidence of theft and diversion.

Shahrokh Shahidzadeh, Intel's senior principal technologist, described the embedded RFID platform that his company developed for the Microsoft Windows 8 platform and various devices (see A New Tool for Electronics Companies). One of the most important use cases for the platform that he described involved locking devices in transit. This would enable companies to reduce supply chain theft and diversion by rendering tablets, laptops and desktop PCs useless until a retailer unlocked them at the point of sale.

This application will not eliminate supply chain theft overnight. It will take time for retailers to deploy passive ultrahigh-frequency (UHF) readers at the point of sale (and for thieves to realize there's no point in stealing useless items). That's a significant investment, but another use case Shahidzadeh described might encourage them to do so. This involved creating custom special offers for consumers. A retailer could work with a content provider, such as Netflix, to enable a discount or trial offer on a device without ever opening the box. The promotional value might encourage retailers to move more quickly toward the use of RFID at the point of sale than they might otherwise have done.

I spoke to a woman at the event who was keenly interested in reducing supply chain threats by tracking parts with serialized data. Her company, like many other large electronics firms, produces a great deal of product in Asia. Truckloads of product sometimes end up missing, and wind up in street markets in Bangkok or Hong Kong. She said she would like to be able to trace these goods and prove they were stolen.

To my surprise, she explained that organized crime in Asia would sometimes purchase electronics in large quantities in order to launder money. She was not entirely clear on how this is accomplished, but I assume an organized crime group would pay a distributor for a container full of tablets, and then perhaps set up its own electronics distribution firm and sell the tablets to retailers at, say, a 20 percent discount.

An attendee from the aerospace sector told me that his company wanted to track individual components on printed circuit boards, because individual chips could yield more revenue sold separately than as a completed board. It's not easy to put RFID transponders on individual components, but I suggested that by tracking the boards and associating the chips' serial numbers with those boards, the aerospace firm might be able to determine which partners were stripping the boards and selling the components. All it would need to do would be to find components on the market, trace each part's serial number back to a specific board, and determine to whom that board was sold.

RFID technology cannot solve every problem in the electronics industry—there will always be rapid swings in demand and product obsolescence, for instance—but it seems clear that theft and diversion is one area in which it can deliver some real benefits.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.