Manageme

nt
informatio
n system

Radio Frequency
Identification Tags for
the shipments of Tiles
globally.

Instructor: Parkash
Lohana

Shahzaib Raza
BBA 7D
1311309

Turnitin Originality Report

Shahzeb_MIS_Final_Project_1311309.docx by Anonymous
From FALL 2016 (FALL 2016)

Processed on 03-Dec-2016 10:00 PKT

ID: 746822232

Word Count: 1403

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Internet Sources:
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sources:
1% match (publications)
"House of Habib.(Industrial Pakistan 1997: Industrial Groups)", Economic Review, July 1997 Issue
1% match (Internet from 21-Oct-2010)
http://www.pongsak.hoontrakul.com/papers/090722_Alcohol_No_Ordinary_Commodity_Its_Tax_Policy_Impl
ications_for_Thailand_by_Pongsak_Hoontrakul_&_Bunchon_Songsumphan.pdf
1% match (Internet from 31-Aug-2016)
http://www.patrickmorin.com/1070-niv4-interior-finish-flooring-ceramic-thresholds.html
< 1% match (publications)
"Section 86(3) of the Companies Ordinance, 1984 Circular to be sent to Members Alongwith the Notice O",
PPI - Pakistan Press International, April 9 2011 Issue

Contents
1.

INTRODUCTION:.................................................................................................... 3

2.

SHABBIR TILES AND CERAMICS LIMITED................................................................3

Practical Study of Shabbir Tiles:....................................................................................... 3

3.

REVIEW OF THEORETICAL AND PRACTICAL SITUATIONS.........................................3

4.

MERITS, DEMERITS, DEFICIENCIES AND STRENGTH.................................................4

Merits:....................................................................................................................... 4
Demerits:.................................................................................................................... 4
Strengths:................................................................................................................... 4
Deficiencies:............................................................................................................... 5

5.

SOLUTION............................................................................................................. 5

6.

REFERENCE:.......................................................................................................... 6

1. INTRODUCTION:
The main area covered in this topic is about a company that supplies ceramic floor tiles to different stores
and home depots. The task assigned is to install an RFID (radio frequency identification) in the company
in order to keep track of cases of tiles that are sent to customers such as home depot and stores like Lowe.
The main area that needs to be covered in this question is to whether the company should install RFID
system or not and what are some of the key decisions in determining the adoption of this technology.
For this a company need to be selected and based on practical as well as theoretical study, the whole
costing needs to be done for installing this technology. So for this question the company that have been
selected is Shabbir Tiles and Ceramics Limited. Shabbir Tiles exports ceramic, tiles and installation
materials to various countries including Srilanka, Afghanistan, Oman and UAE.

2. SHABBIR TILES AND CERAMICS LIMITED

Practical Study of Shabbir Tiles:
Shabbir tiles and ceramics limited is a subsidiary company of House of Habib and was founded in
1978. Shabbir tiles and ceramics is the market leader in tiles and ceramics industry of Pakistan. Shabbir
tiles and ceramics is listed in Stock exchange and supplies their products in Pakistan as well as exports to
various companies including South Africa, UAE, Oman, Srilanka, Afghanistan and some other countries.
The company have over 350 authorized outlets in Pakistan. The company sells its wide range of products
under the brand name of STILE. Shabbir tiles and ceramics have technical collaboration with many
international companies and the distribution system of the company is very strong.
The company have wide range of products that includes Inkjet Wall tiles, Ceramic floor tiles, Porcelain
floor tiles, Stile Bond and many others.
Corporate clients of Shabbir Tiles includes Bank al-habib, Askari bank, Pakistan army, Pakistan navy,
dow university, dolmen mall and others.

3. REVIEW OF THEORETICAL AND PRACTICAL SITUATIONS

As per theoretical situation, the company is not using any RFID system to track their assets and
everything is done manually, all the inventory is recorded on books manually by the employees and there
are many employees dedicated for this task.
RFID basically keeps track of all assets and records every inflow and outflow of inventory. A small chip
is attached on the inventory that contains data such as asset ID and many other things. Whenever an asset
moves it is read by a reader and the details of inflow or outflow is sent to the central system.

There are two different types of RFID; one is active RFID and the other one is Passive RFID. In active
RFID the chips attached to inventory boxes are powered internally and a central reader such as at the door
of warehouse can read and send data of inflow or outflow of thousands of assets at same time. Passive
RFID chips are not powered internally and a separate reader is needed to read each set of inventory
coming in or out of warehouse.
A passive RFID chip costs around 10 cents USD each and a metal passive chip costs around $1 USD
each. Both passive chips requires human involvement and there are chances of error in it. On the other
hand an active RFID chip costs around $15-$20 USD each but an active RFID does not requires any kind
of human involvement and reads 100% accurately.
Now a fixed passive RFID reader costs around $10000-$20000 for hardware, installation and
configuration. An active RFID room locator costs around $150-$200 each, it works with active RFID tags
and tracks an inventory and tells the precise location of assets. Now depending on the number of rooms or
warehouses these active RFID readers can be installed.

4. MERITS, DEMERITS, DEFICIENCIES AND STRENGTH

Merits:
The most important benefit of installing this technology will be better warehouse management, inventory
management that includes the complete tracking of inventory from very first step to the end customer.
Some other benefits of this technology will be less manual work, less cost, better planning and improved
efficiency, fast locating of products, better accuracy. RFID will also help in reducing the distribution cost
and the speed of delivery will also improve.

Demerits:
The company might need to change some infrastructure for this technology and bringing a big change is
often not so easy. It takes some time for the company, the employees and other stake holders to get use to
new change. The company might need to kick some employees out because technology will take over the
manpower. Some of the demerits can be that the suppliers or the customers might not be ready for the
change and the company does not get the return on this investment.

Strengths:
Strengths of the company that can support the company in terms of new technology adaptation includes
high brand awareness of company. Stile is the market leader in tiles industry and big players need to adopt
new technologies before the competitors adopt them. Shabbir tiles have technical collaborations with
international organizations who can help them with installation of the new RFID technology. Another
thing is that the distribution network of Shabbir tiles is very strong they have around 350 outlets only in
Pakistan so they need to adopt this technology in order to improve their distribution network further.

Deficiencies:
Shabbir tiles have 35.66% debt to equity ratio that shows that the company have more ratio of equity and
have around 65% of its leverage on equity. As of 27-11-2016 the share price of STCL is 11.86. The

current ratio of STCL is 0.86 which means that for every Rs.1 of liability the company have Rs.0.86 of
assets. If we look at the company under these financial statistics, the company will need to make sure that
the return on an investment is high enough because they already have high liabilities.
Another thing is that the company need to take its suppliers and customers in account and must take their
concerns in account before going for the technology.

5. SOLUTION
There are number of factors that need to be considered before installing RFID system for the company.
Even if the company intends to install RFID system then we have to decide on whether we need to install
Active RFID or Passive RFID because the costing of both the systems are completely different.
One thing that needs to be considered is that the more you pay the more automation you get. World is
changing and technology is entering in every sector and every company is investing to get automation,
reduce costs and improve efficiency. Now for the decision, many factors should be considered such as the
current cost of labor, the number of people that are currently working on the manual system and when
RFID will be installed how much cost can be saved in terms of salaries of employees, reduction of
manpower, improvement of efficiency, reduction in chances of error. If the initial investment is high but it
will pay back in future then the company should go for RFID system. Some other factors that should be
considered includes that whether the infrastructure of the company supports this system or not. The
employees, suppliers and customers are ready for this technology or not.
Based on the studies the company should go for RFID to get automation. Now whether to go for active or
passive RFID, it depends on the labor; if the labor is cheap then the company should go for passive RFID
in this way the assets will be tracked easily as well as you will have some manpower to correct any error.
If the labor is expensive than its better to install active RFID. Its a one time big investment but it will
give company full automation and no manpower will be required and efficiency of the company
operations will improve drastically.
In short it all depends on the ROI. Return on investment is the key drive for the decision of any
investment for any company. So if we know that investment will pay back in future then the company
should obviously go for the investment.

6. REFERENCE:

http://www.stile.com.pk/
http://www.scstrade.com/StockScreening/SS_CompanySnapShot.aspx?
symbol=STCL
http://www.rfidarena.com/2013/11/14/benefits-of-implementing-rfid-in-supplychain-management.aspx
http://www.stile.com.pk/exports/
https://prezi.com/wv5px0f6a7q9/shabbir-tiles-ceramics-ltd/
https://prezi.com/yas87e0rdqsl/smm-presentation-stile/