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RFID technologies are about to permanently revolutionize value added and logistic processes in production and trade. To fully benefit from this new technology, the current closed internal organization of firms needs to switch to a more inter-corporate set-up. The required change can be facilitated by the RFID technology itself, but necessitates a structured and detailed definition of the organization. Concerns arising from the use of such technology namely, misuse of data, transparency and security, are well founded and must thus be dealt with. A possible solution focuses on the existing trust and cost structures of the partners in the network. The distribution of cost, utility, and risk among the partners has to be based on clearly defined criteria, specified beforehand in the contractual agreements.

The Ko-RFID project, funded by the German Ministry for Labor and Economics (lifespan from 09/2006 until 09/2009, circa 5 million Euros in funding), deals with the aforementioned issues using an economic and game theoretical approach. The potential role of IT and logistic service providers as that of a go between is to be researched along with the possible strategic re-alignment of the industry. Other areas of research concern the efficient storage and retrieval of the sensor data and related security and privacy issues: To what extent and frequency should data be stored on the network? What kind of data should be made available in an aggregated form? How should security and access rights be administered so that data protection is ensured? Which forms of data mining can be used without compromising sensitive data?

Ko-RFID addresses these questions in close cooperation with firms that are forerunners in the use of RFID based logistic systems in Germany. These include SAP and IBM as IT producers and service providers, Tricon and Gerry Weber as integrators, and DaimlerChrysler and Wellmann (kitchen fittings) as users. Based on the analysis of existing value chains in the textile, automobilel and kitchen furnishing industries, the relevant technical standards, interfaces and logistic applications are to be developed for RFID-based value chains. The ultimate goal is to develop a benchmark and a best practice model.