Technology has changed the way the world does business. One hundred years ago, most Americans were still commuting by horse and buggy, reading by candlelight, and assembling products by hand. In the past century, however, cars and airplanes, widespread electrical usage, and industrial progression have greatly improved and accelerated the world in which we live.

Supply chain participants, no longer only a local connection, are now global partners that daily rely on technological advances to be successful.

One such technological advance is radio frequency identification (RFID). Known best by the Department of Defense (DOD) and retail chains, RFID hit the market with staggering ideas and unfortunate limitations that curtailed widespread application.

“Wholesale distribution executives should consider RFID when planning future technology investments, yet be wary of inflated claims, overblown projections, and unrealistic expectations,” cautioned Adam Fein, Ph.D., founder and president of Pembroke Consulting, in the 2004 edition of Facing the Forces of Change: The Road to Opportunity. According to Fein’s latest study, Facing the Forces of Change: Lead the Way in the Supply Chain, only 10 percent of distributors were using RFID in 2006, however, 65 percent expect to be using the technology within five years.

“Regardless of the product identification technology uses, wireless technologies will increasingly be the basis for transmitting data from the warehouse floor into the business system, rather than manually recording and entering information into the system later.”

UNDERSTANDING RFID

With widespread RFID usage on the horizon, having a basic knowledge of the technology will most likely become mandatory for continued supply chain success. According to the RFID Journal, an RFID system is described as a system that transmits the identity (in the form of a unique serial number) of an object wirelessly using radio waves. Considered an automatic identification technology, RFID is classed with bar codes, optical character readers, and some biometric technologies (retinal scans). Its primary objectives are to reduce time and labor vested, and to improve data accuracy. As distributors consider their bottom lines, many find that improved accuracy and less time expenditure is what increases profits and expands businesses.

An RFID system consists of three major components: tags, readers, and middleware. RFID tags are constructed of a silicon microchip that is attached to a radio antenna and mounted on a substrate. It is then embedded into packaging or mounted on a surface. The RFID tag becomes an RFID label when it is sandwiched between paper and adhesive, allowing information to be printed on the surface.

Tags are produced as active or passive and at multiple frequencies. An active tag has a battery attached and broadcasts its signal when within range of a reader or at random preprogrammed intervals. It is used primarily to track large assets over long distances and has a read range of 60 to 300 feet. Passive tags contain no power source or transmitter. These tags are less expensive, require no maintenance, operate at low and high frequencies, and have a read range of a few inches to 30 feet.

Readers are the devices that retrieve the data stored on the tags. Using one or more antennas, the units emit radio waves and receive signals back from the tag. Depending on the model, readers usually have onboard computing power, can filter data, store information, and execute commands. Different types are also able to communicate using multiple protocols and multiple frequencies.

Middleware is essentially the software that “glues” the tags and readers together and then filters the necessary information into a usable format. Some are also able to manage RFID readers, monitoring the unit’s health, configuring it, and sending software updates, etc. According to the RFID Journal, “Middleware plays a key role in getting the right information to the right application at the right time.”

APPLIED SCIENCE

RFID is not necessarily a new technology; however, the applications being developed are taking it to the next level in each unique industry. Unfortunately, new technology applications require time and effort in order to justify wide scale implementation. Commonly, there are setbacks to be handled and limitations to be addressed. RFID is no exception.

Up until recently, the cost to put in place an RFID system has been prohibitive. The more bells and whistles a tag has, the more expensive it can get. Active tags range from $10-$50 per tag. The more commonly used passive tags started out at approximately $1 per tag. This cost, however, due to research and advances, has been lowered to approximately 20 to 40 cents per tag.

Cost is not the only challenge this technology faces. There are other limitations that RFID continues to struggle against. For example, at ultra high frequencies (UHF), radio waves begin to act like light and “bounce” off of objects. This makes metal, water, and cases in the center of a pallet difficult to read. Too much interference can also interrupt the signal causing lower accuracy in read rates. Advances, however, are currently being made to address these problems and the second generation of tags is more accurate and less temperamental than its predecessor.

In spite of the limitations, first adopters are finding innovative ways to implement RFID. Typical applications include: supply chain compliance, supply chain logistics and transportation, manufacturing/industrial, retail, airport luggage tracking, pharmaceutical, health care, event management, transportation/tolls, access control, safety, dynamic security situations, sorting systems, inventory tracking, and inventory control.

Wal-Mart, AT&T Cingular, Best Buy, Boeing, Honeywell Analytics, and many more have found niche applications that they have individually tailored to improve their accuracy and efficiency. This in turn is improving their profits and their productivity.

SEEING CLEARLY

In spite of cost and limitations, RFID offers something most technologies can’t boast. According to the RFID Journal, RFID offers the possibility of perfect supply chain visibility.

“This technology gives users the ability to know the precise location of any product, anywhere in the supply chain, at any time.” It potentially allows distributors to shift from pushing product through the supply chain to pulling product through based on real-time demand.

Instead of ordering based on a monthly forecast and hoping the forecast is correct, distributors in conjunction with contractors and manufacturers could order based on actual real-time stock outs reporting automatically from RFID readers on inventory shelves.

Supply chain perfection may never be achieved and kinks will continue to occur; however, embracing new technology should help distributors and the rest of the supply chain enter a new era of greater visibility, leading them to greater efficiency and increased profits.

Sidebar: More About RFID

Matt Ream of Zebra Technologies recently hosted a webinar on RFID. Below is an outline of his presentation.

How to Choose the Best Technology for Your Application

Presented by Matt Ream, senior manager with RFID systems at Zebra Technologies

I. RFID Tag Types

A. Ultra High Frequency (UHF)
1. Approximate read range of 10-15 feet
2. Reflective technology
3. Low liquid performance
4. 96 bits typical memory storage, larger ones coming

B. High Frequency (HF)
1. Approximate read range of 3 feet
2. Magnetic field technology
3. Better liquid performance
4. 256 bits to 8 kilobytes

II. RFID Tag Choice

A. Considerations
1. RFID Label and encoding printing speed
2. Item density and material (what are you attaching a tag to)
3. Orientation of RFID tags/antennas
4. Noise resistance (conveyor motors/light noise)

B. Challenges
1. Reading tags on cases containing water and other liquids.
2. Reading tags on metallic items.
3. Reading tags on densely packed pallets, items touching one another.
4. How fast will the tags be going past the reader?

C. Application Considerations
1. What distance are you reading at?
2. Are the products singular or are they densely packed in cartons/crates?
3. Are the products made of solid, liquid or metal materials?
4. How much data needs to be encoded/stored on the smart label?
5. What ambient temperatures are involved?

III. RFID Applications

A. Item Level Tagging
1. Primarily retail supply chain.
2. Other applications:
a. drug tagging
b. hospital patient wristbands
c. individual high value items
d. baggage handling – one of the most trialed so far
e. sensitive file and document management
f. book and video inventory control and rentals

B. UHF Tagging
1. Supply Chain Compliance
a. manufacturer to retail and Department of Defense
b. EPC case and pallet compliance

2. Supply Chain Logistics and Transportation
a. warehouse and distribution management
b. cargo container and trailer tracking, cargo security

3. Manufacturing/Industrial

a. shipping and receiving
b. inventory management
c. work-in-process, material handling
d. equipment and asset protection

4. Retail
a. shipping and receiving
b. inventory management
c. asset and theft protection

5. Luggage tracking

C. HF Tagging (13.56 MhZ)
1. Pharmaceutical
a. ePedigree - item level tagging for drug authentication

2. Healthcare
a. patient wristbands
b. medication monitoring
c. laboratory quality control

3. Event Management
a. attendee wristbands
b. tickets

4. Transportation
a. municipal transit ticketing (public transportation)

5. Access control and safety
a. smart cards for cashless payments
b. passport identity

6. Dynamic security situations
a. document management
b. jewelry tracking
c. gaming

7. Sorting Systems
a. conveyor fed applications - postal and express delivery sorting

8. Inventory tracking and control
a. books
b. videos in libraries
c. retail
d. rental stores.

IV. Case Studies

A. Beaver Street Fisheries, a Wal-Mart supplier
1. Part of the Wal-Mart mandate.
a. Phase 1: implement manual slap and ship
b. Phase 2: transitioned to automated Gen 2 print and apply system
c. Phase 3: Leveraging RFID for added value in operational efficiency and business performance.

B. AT&T Cingular
1. Part of Wal-Mart and Best Buy mandates. Ships cell phones and SIM modules.
a. RFID tag read rates and ‘good tag’ yield rates are now running close to 100 percent since migration to Gen 2
b. Integration of RFID system with warehouse management software (WMS) and order processing improved productivity and significantly reduced order processing and customer service errors.
c. Saved an estimated $700k in labor and shipping error costs by installing                      an automated rather than a manual system.

C. Boeing
1. Conducted successful pilot testing of HF tagging for aircraft maintenance
a. In simulated maintenance testing, mechanics updated the rewritable HF tags with date of service, activity, location codes, and mechanic ID number. Each tag was read and updated six times.
b. In a three-month period, not one label fell off or became unreadable. Most importantly, the RFID tags did not interfere with aircraft navigation or communications systems.
c. The test proved that, using HF RFID smart tag technology, mechanics from any airline can access maintenance information without checking a centralized database, and with minimal departure delays.

D. Honeywell Analytics (manufacturer of gas detection systems )
1. Deployed RFID technology to automatically read, record, and track data, and to ensure proper calibration of its Vertex Toxic Gas Monitoring System.
a. Automated data capture and calibration ensured 100 percent accuracy, eliminated operator error, and increased safety.
b. Operators saved 2-5 minutes on set-up time and manual recording for each test, increasing efficiency and productivity.
c. System automatically alerts operators when tape is nearing expiration or depletion, thus minimizing the need to repeat tests.

For more information or to listen to this Webinar and others dealing with RFID, visit www.rfid.zebra.com.

Publication date: 07/02/2007