RFIDhas the power to
connect people and objects.
But has the technology
found its place in the supply
chain,asks John Lamb.
Internet of things
or much of the past decade enthusiasts of Radio
Frequency Identification have been talking up
the technology’s ability to solve a wide range of
logistical problems involved in tracking,
identifying and recording informationabout goods.
Fans of RFIDrange fromblue sky thinkers inacademic
think tanks,who see RFID interconnecting people and
objects such as fridges,cars and buildings to create an
internet of things;to pragmatic grocery executives
convinced that RFIDcan solve the seemingly intractable
traceability problems faced by the supply chain.
Getting the internet of things off the ground has not
backing for a project that not only involves collaboration
betweenbusiness rivals,but also calls for deep pockets.
From the outset,research into RFID has been led by
Auto-IDLabs where researchers have been working with
product informationbody GS1 EPCglobal tobuilda layer
on top of the internet that will make it possible for
computers to identify an object anywhere in the world
and gather and exchange information relating to that
“This network will not only provide the means to feed
reliable,accurate,real-time information into existing
business applications;it will usher in a whole newera of
innovationand opportunity,” says Auto-IDLabs.
A great deal of research and development money –
backed-up by commercial muscle – has been expended
in persuading manufacturers to stick tiny antennas and
associated circuitry on their packaging so that items can
used to identify aircraft.
Inthe early years,high flying retailers such asWalmart,
Metro and Tesco announced mandates that laid out
timetables for their suppliers to adopt RFID and
incorporate tags in product packaging and on other
containers.Leading manufacturers such as Unilever and
Gillette also joined the RFIDproject.
Originally,Walmart’s aimwas to tag 100,000 lines,add
tags toall its crates andpallets andtoimplement anRFID
infrastructure that would revolutionise the industry.
However,the ambitious drive topushRFIDintothe retail
supply chainhas beenradically scaled back.
When the downturn hit,suppliers resisted the
change due to the cost of RFID and its complicated
implementation.In2009,Walmart reduced its supplier
penalty from$2.00 per pallet for not tagging crates and
pallets to 12 cents,while it reviewed its RFIDmandate.
Despitethechangeof heart,thecompanyhas achieved
over 95 per cent accuracy inrecording pallet movements
and its CIO says:“Walmart is still bullish about RFID”.
Walmart is concentrating on applying RFID to the
clothing lines that it sells.
There is no doubting that the technology has many
benefits:RFID tags can be used to store and retrieve
informationabout the items they are attachedtoandthe
tags can be scanned round corners.Many tags can be
scannedat once,enablingtheentirecontents of avehicle
or a shopping trolley to be recorded at a single pass.
There are two types of RFIDtag:actives ones that need
their own power source and passive tags that act as
transponders anddonot requirepower.Passivetags work
inoneof threedifferent frequencybands –lowfrequency,
high frequency and ultra high frequency (UHF).
The majority of tags in the supply chain are of the
cheaper,passive variety.Last year over 300 million were
used to tag clothing and help retailers manage a fast
moving product that has a large number of different
combinations of size,colour and style.Research firm
IDTechExsays that thevalueof tags,readers andsoftware
and services for RFIDcards,labels and fobs in 2010 was
$5.63bn,up from $5.03bn in 2009.Smart cards,smart
tickets,and RFID tags on cases or pallets accounted for
most of this growth.
“In retail,RFID is seeing rapid growth for apparel
tagging,” observes IDTechEx.“RFIDinthe formof tickets
usedfor transit will demand450 milliontags in2011.The
tagging of animals such as pigs,sheep and pets is now
substantial as it becomes a legal requirement in many
more territories,with 243 milliontags being used for this
sector in 2011.In total,2.88 billion tags will be sold in
2011 versus 2.31 billion in 2010.Most of that growth is
frompassive UHF RFIDlabels.”
Onthe face of it RFIDlooks like a goodreplacement for
barcodes,but that seems unlikely to happen in the near
future.Uptake of RFIDhas been sluggish.The respected
AIMadvisory company forecasts that RFID will,at best,
only replace tenper cent of traditional barcodes by 2015.
The cost of the RFID tag has always been a barrier to
widespread use of the technology,although experiments
are taking place with electronic inks,which could bring
down lifetime costs of RFID and considerably improve
the chances of mass application.
Currently,a passive RFIDtag can be bought for as little
as $0.65 in volume,but this compares with fractions of a
cent to print a barcode.An RFID transponder will be
several hundred dollars but a barcode reader can be
bought for as little as $30.These cost differences have so
far confined RFIDto applications with a high ROI.
Most tags can only be accurately read from2mto 5m,
and signals suffer frominterference when tags are fixed
to metal cans and liquid containers.Both drawbacks
have prevented its widespread uptake by supermarkets.
Data management is essential if companies are to gain
any value from their investment in RFID.RFID tags,
scanned every time they pass a reader,generate
enormous amounts of data that needs to be managed
and integrated into back-end systems.EPCglobal has
developed an international network that is vital to
makingRFIDwork.Whendatais readfromRFIDtags it is
passed by the reader to a computer or local application
These systems match the EPC number to information
about the associated item via the Object Name Service
(ONS) whichpoints computers tosites ontheWorldWide
Web where the information is held.Data generated by
Services,to exchange data with trading partners.The
trade association also defines the software and interface
standards for the EPCglobal Network and how these
elements interact with enterprise systems.
MarlinIndustries,aUKsupplier of cablepackagingand
associatedmanagement services,is typical of companies
that have implemented EPCglobal technology for asset
tracking.Marlin is using RFIDtags to monitor and track
cable drums in a solution developed by Coriel,a GS1
Solution Provider.The implementation has improved
supply chain efficiency and reduced its impact on the
The company says that by fixing tags in place of
engraved inscriptions or a label on cable drums
information about the drums can be read with 100 per
cent data accuracy.The tag also carries useful
additional information such as the quantity of cable
left on the drumand supply chain transaction details.
Any data about the drumcan be recorded in real time.
RFID applications cover a wide range of different
industry sectors.In healthcare lost assets can result in
significant costs,lost time or longer than necessary
patient waiting times.Anecdotal evidence suggests
healthcare workers can spend up to a third of their time
searching for equipment.Hospitals are investing in asset
management systems that use active RFID tags to
identify key assets.
Similarly,thefoodanddrinkindustryis seekingways to
employ reuseable and recyclable packaging.Interest in
RFID solutions for so-called returnable assets – plastic
crates or roll cages for instance – is gaining pace.
“Whether the motivation is to prevent asset invisibility
or detect losses through theft,asset management is an
essential element of quality production management,
whose overall objective is to support efficiency,quality
and safety goals,” says Pascal Durdu,director of
innovationat auto-IDcompany Zetes.
“In the future as cost management continues to
increase in importance,asset utilisation tracking will
become a routine element of daily supply chain
operations as the costs of data capture technology
decrease compared with the opportunity cost of
abstinence.Coupled to this,increasingly powerful
wireless communication systems and the ability to act
upon real time information to improve decision-
making and competitive advantage will prove difficult
benefits to resist.”
However,some experts believe that a different
technology;near field communications (NFC),
developed for mobile phones,might be a better bet than
RFIDtags.“What makes this technologyfar morelikelyto
succeed is its adoption by consumers as an integral
technology in their smartphones,” says Terran Churcher,
chairman of Codegate,a tracking systems and
Its use in mobile phones means NFC technology will
gain mass adoption,minimal manufacturing costs and
thousands of potential applications,argues Churcher.
Manufacturers including Nokia,LG,HTC,Motorola,
NEC,Samsung and Sony have all said they will
incorporate NFCintheir handsets by 2012.
“The future of RFID is bright,not in the conventional
sense but as promised by NFC,” maintains Churcher.
“The scale of manufacturing to supply the consumer
smartphone market will mean lowcost tags and reading
devices enablingwider adoptionbeyondsmartphones in
thousands of applications from opening hotel doors to
reading nutritionand allergy warnings onfood labels.
“Literally,tens of millions of consumers will be able to
electronically read and write information using their
smartphone,representing a huge advertising,sales and
marketing opportunity for those bold enough to get in
early,” Churcher adds.
There can be no doubt that use of RFID,especially for
tracking high value goods,will continue to grow.For the
moment though there is little evidence that RFID will
replace barcodes.Until the cost of tags comes down,the
solutions will continue to co-exist.
RFIDgate in action at