Hot Topic: The future for RFID

During 2003, the proposed adoption of RFID (Radio Frequency IDentification) technology by leading retailers such as Wal-Mart and Tesco provoked a heated debate in the media, centred around the capture of customer data and the freedom of the individual. Much of that debate was ill-informed - but then, newspapers never usually let that get in the way of a good story! So what will introduction of this new technology really mean?

Last Autumn, I attended the SmartLabels Europe 2003 conference in Cambridge, hosted by IDTechEx and sponsored by a number of the leading players in this technology, in the hope of finding some answers. Well, for a start, RFID is not exactly new - the concepts have been around since the 1950's. However, the ability to execute these concepts is now closer to becoming a reality, thanks to major technical and standards' development.

During the conference, Wal-Mart updated attendees on the progress of their RFID initiative. As the world's largest retailer, with over 5,000 outlets worldwide, Wal-Mart currently uses bar-coding and UPC's (Unique Product Codes) to identify items and cases/pallets of goods as they move through their supply-chain and out to their stores. By 2005, they expect to have live implementations of RFID tagging using new EPC's (Electronic Product Codes, which can carry more data than UPC's) with selected suppliers on cases and pallets at Distribution Centres, followed by item-level tagging at a later date. EPC's on tags should be easier and quicker to read than barcodes - no need to unpack pallets to check contents, as RFID readers do not require line-of-sight like bar-code scanners - resulting in less labour, fewer errors and better management of inventory. Wal-Mart expects to share these benefits with their suppliers and customers in the form of lower costs.

Of course, as with any new technology implementation, there will be teething problems and Wal-Mart (and others) have identified a number of issues that could impact successful implementation. Although many vendors have demonstrated success in reading multiple tags in close proximity - "stacking" - the misread rate or "collision" of tags is still a potential problem in real-world situations. So too is interference - from metal racks, door-frames, fork-lift trucks and the like - which requires careful positioning of tags and readers alike, especially whilst read-ranges of high-frequency tags remain quite short. Similarly, the frequencies available vary across the globe, requiring international agreement on wavelengths and signal strengths.

As I mentioned earlier, perhaps the biggest constraint to public acceptance is the "Privacy" question, which was hyped by the press and a number of consumer organisations. In theory, these issues are already with us - whether it be data on loyalty cards from stores, credit cards, or cell-phones - since these technologies have already created a data collection infrastructure which could be used to compromise personal data. In this context, RFID is just another low-level data collection tool (and less powerful than some of the above-mentioned technologies already in use). Indeed, considering the huge amount of data which could be produced from RFID at item level, it would take a huge effort to collect, store, filter and then act on that data, not to mention the cost of the infrastructure to support that effort. Common sense, not hype, needs to prevail.

As public acceptance of RFID grows, some of the other barriers to wider adoption will be broken down. At present, we are in a "chicken-and-egg" situation - until more companies commit to RFID, the cost of tags and other infrastructure will remain high. In 1999, typical smart-label tags were between $1- $2 each; now we are looking at volumes in millions, costing 30 cents. If this is projected in to billions of tags on individual items, using existing technology, the cost falls to 5-7 cents. Eventually the price falls to fractions of a cent, with new technology and even greater volumes. Finding the path to these volumes, with applications and integrated solutions, must be the way forward. There are many scenarios where a 30 cent tag can be justified now; companies which adopt RFID will surely steal a march on their competitors. All that is lacking is the will and vision to commit.

The conference also included a number of very interesting presentations outlining the current state of RFID technologies; label creation and production, plastic chip developments, intelligent shelving and packaging, to name but a few. Examples of pilots run by companies like Tesco gave some idea of the benefits and returns from wider exploitation of the technology. All-in-all, SmartLabels 2003 provided those who are implementing, or thinking of implementing, RFID in their businesses with the confidence that constraints have been identified and solutions are being sought. With developers like HP and SAP putting their weight behind RFID, it will surely not be long before this technology becomes mainstream.

(For more information, visit: http://www.idtechex.com)

Bob Brown

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