RFID: adoption increases despite costs

RFID (radio frequency identification) technology mandates from the U.S. Department of Defense as well as retailers such as Wal-Mart are pushing RFID hardware and software providers to keep up with trends. Practically speaking, having a few big customers mandate that technology providers move to next-generation standards will help other RFID customers realize greater RFID connectivity and saving...

07/01/2004


RFID (radio frequency identification) technology mandates from the U.S. Department of Defense as well as retailers such as Wal-Mart are pushing RFID hardware and software providers to keep up with trends. Practically speaking, having a few big customers mandate that technology providers move to next-generation standards will help other RFID customers realize greater RFID connectivity and savings beyond the four walls of their facilities. Anticipated savings result, in part, from information remaining with products (or packages) throughout their lifecycles. Applications and results vary, but in the extreme, RFID could be used to track [monitor] raw materials production, procurement of components, manufacturing and assembly, purchases, deliveries, use, maintenance, repair, and disposal or recycling.

How much?

About 25% of companies with $5 billion or more in revenue will spend between $500,000 and $10 million applying RFID technology in 2004; smaller companies will invest fewer dollars; and overall, industry is slow to embrace the new possibilities RFID offers. These results were from a recent international survey, 'RFID: How Far, How Fast?' by Deloitte Touche Tohmatsu, ePC Group, and Retail Systems Alert Group.

Like many control-engineering technologies, RFID enables process revision, so a company's cultural willingness to move beyond traditional methods helps in implementation. The study says more than 75% of manufacturers and approximately 65% of transportation/logistic providers surveyed are implementing cross-functional teams to better integrate RFID solutions, beyond those responsible for purchasing, manufacturing/assembly, or shipping functions. Manufacturing has employed RFID for years; the push for increased RFID use throughout the supply chain and lower unit costs will increase penetration.

RFID generally consists of an electronic tag (a radio transmitter) attached to each part, product, or skid; the reader (a receiver), mounted or hand-held; and related software and systems that analyze and interact with the tags and readers. Tags are either passive or read-only (information about the product can be retained in a separate database), or active or read/write, where changing information stays with the product. Communication is via radio waves. Unlike a mere proximity sensor, RFID can relate a detailed life story and ancestry.

Improved electronics and power use in tags and readers increase practical range and useful life. Tags can be as small as a chip. More capable software allows better use and analyses of retained data. Wider use requires that software tracking information for supply-chain systems and networks communicate securely and use similar constructs. Standards aim to make RFID even better, promoting higher levels of interoperability for tags, readers, and software from various vendors.

Reader, tag upgrades

Different manufacturers' tags and readers don't necessarily work with each other; part of the reason for increased standardization. SamSys Technologies Inc. reported recently that, for the moment, it has the only universal RFID bar-code tag reader. As retailers like Wal-Mart demand that all its vendors scan product merchandise bar codes, manufacturers will gain flexibility to read multiple frequencies with one reader: 125 kHz, 134 kHz, and 13.56 MHz.

As tags are placed, they need to be verified. Danaher Accu-Sort Systems Inc.'s Fast Tag RFID tagging system places, tracks, and verifies RFID tags on cartons and pallets. It uses Microsoft Windows and includes an inbound bar-code scanner, RF tag applicator, tag verifier, outbound box-tag RFID verifier, controls for infeed, tracking, verify-reject outputs, and configurable I/O features. The readers comply with retailer-required UHF-band Class 0 or Class 1 RFID technologies and will be upgradeable to Generation 2 standard, when completed, according to Bob Joyce, Accu-Sort president. Accu-Sort's Fast Tag is said to be a low-risk upgrade path from bar codes, integrating easily into existing material-handling systems. Separately, MPI Label System's 360 RW Label Applicator is said to be the first machine to simultaneously inspect and write to RFID transponders embedded in pressure-sensitive labels.

Considerations for selecting tags and readers include cost, size, form-factor, and performance. Balluff's Bis-LPallet RFID System combines long-range sensing and new, inexpensive data carriers. With a read-write range of 24 to 100 mm and compatibility with existing 125 kHz systems, the system was designed 'to be the standard when it comes to tracking pallets through an assembly automation line,' says Balluff industry manager, Tom Rosenberg. The 1.6-mm thick Balluff data carriers, in 20, 30, and 50 mm diameters, can be permanently installed on pallets. Each carrier is $6 for 40-bit read-only and $10 for 192-byte read/write. A sensing pattern with 'read/no read' cutoff nearly eliminates data communications errors at the edge of the sensing envelope, Rosenberg says. Most technologies communicate to multiple networks.

'A big issue remains tag cost,' says Mark Stremmel, Turck RFID business development manager. 'People are looking for tags in the sub-10-cent range, but even in the million quantity, they're 40-50 cents—still pricey, compared to bar codes. On the controls side, costs are similar, however.' Turck distributes Balogh RFID products, hardened for use, Stemmel says, even next to robotic welders.

Batteries? Perhaps they'll power some applications, but you can forget about them for others. Ferroelectric RAM technology, such as that used in the Omron V670 RFID system, can be accessed 1 million times, about 10 years worth, for a 128-byte tag.

Online Extra

Technology providers

See also Control Engineering Buyers' Guide www.controleng.com/buyersguide, under the RFID category.

online CAPTION epr.swb.com/adDetail.asp .
Accu-Sort Systems Fast Tag RFID tagging system places, tracks, and verifies presence of RFID tags on cartons and pallets.

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Education, unreadiness

Recent news about radio frequency identification (RFID) includes education opportunities and cost concerns about RFID's use on pallets. A series of 'RFID Boot Camps' by AIM Global (Automatic Identification and Mobility trade association) has begun in the U.S. and Canada. In separate developments, a recent poll of IT executives, conducted by a division of NCR, suggests that RFID is too costly for retail point of sale at present, and ABI Research says people ought not to get hung up on the idea of 5-cent tags.

AIM Global, a trade association for the Automatic Identification and Mobility industry, will produce series of RFID educational workshops about RFID and EPC (electronic product code) technology and applications. RFID Goal is to 'provide a necessary reality check, to help businesses large and small understand how RFID can positively benefit their organization,' stated Dan Mullen, president of AIM Global. Technology experts will address the overall business case for RFID and discuss how enterprise users, integrators, and value-added resellers can improve their businesses by incorporating RFID products. Separately AIM Global also is meeting with Boeing, Airbus, and others about standards in development for use on commercial aircraft. A CD on the AIM site offers an RFID Knowledge Base.

While RFID has started to be used in supply chain management for pallets, it is not yet cost effective to put radio frequency tags on individual retail products, according to a recent poll of 106 IT executives. Teradata, a division of NCR, a provider of data warehousing, conducted the survey. Eighty-five percent of those surveyed said they believe RFID is too expensive to be deployed in retail for at least two to three years; 27% believe it will be deployed at retail point of sale within a year. Of the total respondents, half said deployment at retail would likely go beyond four years.

Forget 5-cent RFID tags: just work on benefits, suggests ABI Research. With Wal-Mart's mandate announcement in June 2003, discussions have centered on RFID tags becoming available at a price point of five cents in large volumes. 'Five cent tags are a component to the overall success of RFID' but they are not one among the most important elements, says Erik Michielsen, ABI Research principal analyst for RFID. 'Without proper commitment, planning, and partnering, cheap RFID hardware is not sufficient to make a sustainable long-term difference with consumer packaged goods suppliers looking to benefit from RFID.' Compliance with mandates requires that companies invest in RFID, so many companies have embraced cheap tags as a way to reduce compliance costs. Some companies have adopted a delaying strategy solely in hopes that tag prices will decrease. ABI Research says compliance efforts to make Wal-Mart's January 1, 2005, deadline for the sake of compliance alone may prove more hurtful than helpful in forging a stronger relationships with retail giants.