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Is RFID a flash in the pan?
Friday, 11 December 2009 00:00
Want to know where RFID stands in today's supply chains? Industry veteran John Hill looks at this year in RFID.

Nothing in the past 30 years—not even bar code—had such a dramatic impact on the supply chain as the November 4, 2003 announcement by the 800-pound gorilla from northwest Arkansas (Wal-Mart). Business journals and the national media treated the topic as if it were the "second coming." And, those of us who had labored in the supply chain vineyard for years were excited as well.

Why? Because in spite of the anticipated challenges that were to confront RFID deployment, the announcements focused or refocused corporate America's attention on the critical role played by supply chain technology and systems in the nation's economy.

The excitement was electric and, not unlike the enthusiasm that attended bar code standards announced in the late 1970s and early 1980s, it seemed that everyone jumped on the bandwagon. Unfortunately, non-technical advocates and some segments of the media blatantly oversimplified the challenges, while understating the costs associated with Wal-Mart's initial focus on item level tagging and point of sale deployment.

It's been five and a half years since the announcement. What's happened? While waiting for technologists to resolve cost and performance issues—and national and international organizations to promulgate the necessary standards—a number of companies have moved forward with measured assessment of RFID, finding a host of supply chain and logistics applications where the value of the items identified and the data captured more than offset initial technology investment and the recurring costs of tags that work. Here we're talking about asset identification and management, everything from railcars, tractors, trailers and lift trucks to pallets, cages, tubs and reusable containers.

Overall, market revenue exceeded $5 billion last year and is expected to grow annually at a rate of 10% to15% through 2013, current economic conditions notwithstanding, according to market watchers ABI Research and ID TechEx.

Even companies that decided to defer RFID investment, found "low hanging fruit" during their assessment of the technology in the form of opportunities to streamline throughput and reduce costs through enhanced material flows, processes and systems.

Further, the RFID phenomenon triggered a number of innovations in bar coding, voice data entry and other identification technology that have broadened the number of options available to current and prospective users. Further, if the enthusiasm shown by 175 exhibitors and 2,400 attendees at this year's RFID Journal Live event in Orlando can be used as a bellwether, it appears that the industry is maturing and making a determined effort to better align current technology performance capabilities with applications that can deliver respectable returns. Some highlights include:

  • a number of real-time locating system (RTLS) hardware and software products for warehouse, truck and container yard, logistics depot, open-pit mining and corporate asset identification and tracking;
  • RFID-enabled lift trucks with optical positioning to provide load identification and location data to a WMS or ERP, with accuracy to within one foot; • a specialized shipping container that uses passive UHF technology to inventory its contents, transmitting data via WiFi, cellular and satellite links;
  • "Smart" pallets and totes with embedded RFID tags;
  • at least two asset visibility solutions for RFID/GPS tracking of trailers, trucks, rail cars and fleet vehicles including temperature, humidity, shock and vibration sensing for reefers;
  • an active RFID system integrated with GPRS, GSM and satellite communications to monitor shipping containers and other high-value assets in Afghanistan;
  • software product that handles input from multiple automatic identification and sensor technologies including GPS, bar code, infrared and active and passive RFID;
  • an RFID-based waste management system that identifies vehicles and tracks materials at environmental clean-up sites;
  • an RFID-based system that tracks perishables with semi-passive, temperature-sensing tags for monitoring produce and pharmaceuticals in transit;

  • active and passive RFID tags for IT asset tracking;
  • a system for tracking pigs and other animals, using RFID tags to uniquely identify each pig and software that records breeding history, vaccinations, medical treatment and other events;
  • a new RFID tag inlay from China advertised at $.058 per inlay in quantities of 5 million, not the price point that is likely to trigger a significant upsurge in demand, but a good bit lower than that anticipated even a year ago; and
  • exciting new developments in thin-film, battery assisted passive tags as well as conductive and organic inks for printing RFID tags that bodes well for the lower costs essential for downstream itemlevel consumer goods identification.

The bottom line? RFID was and is not a flash in the pan. You'd better keep an eye on it. Wal-Mart certainly is!

Logistics Management, 12/11/2009