Thursday 27th Oct 2016 - Logistics Manager

Internet of things

RFID has the power to connect people and objects. But has the technology found its place in the supply chain, asks John Lamb.

For 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 information about goods.

Fans of RFID range from blue sky thinkers in academic 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 RFID can solve the seemingly intractable traceability problems faced by the supply chain.

Getting the internet of things off the ground has not proved an easy task. Proponents have had to win industry backing for a project that not only involves collaboration between business rivals, but also calls for deep pockets.

From the outset, research into RFID has been led by Auto-ID Labs where researchers have been working with product information body GS1 EPCglobal to build a 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 object.

“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 new era of innovation and opportunity,” says Auto-ID Labs.
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 be identified by radio scanners: the same technology as is used to identify aircraft.

In the early years, high flying retailers such as Walmart, 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 RFID project.

Originally, Walmart’s aim was to tag 100,000 lines, add tags to all its crates and pallets and to implement an RFID infrastructure that would revolutionise the industry. However, the ambitious drive to push RFID into the retail supply chain has been radically scaled back.

When the downturn hit, suppliers resisted the change due to the cost of RFID and its complicated implementation. In 2009, Walmart reduced its supplier penalty from $2.00 per pallet for not tagging crates and pallets to 12 cents, while it reviewed its RFID mandate.

Despite the change of heart, the company has achieved over 95 per cent accuracy in recording 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 information about the items they are attached to and the tags can be scanned round corners. Many tags can be scanned at once, enabling the entire contents of a vehicle or a shopping trolley to be recorded at a single pass.

There are two types of RFID tag: actives ones that need their own power source and passive tags that act as transponders and do not require power. Passive tags work in one of three different frequency bands low frequency, 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 IDTechEx says that the value of tags, readers and software and services for RFID cards, 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. “RFID in the form of tickets used for transit will demand 450 million tags in 2011. 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 million tags 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 from passive UHF RFID labels.”

On the face of it RFID looks like a good replacement for barcodes, but that seems unlikely to happen in the near future. Uptake of RFID has been sluggish. The respected AIM advisory company forecasts that RFID will, at best, only replace ten per 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 RFID tag 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 RFID to applications with a high ROI.

Most tags can only be accurately read from 2m to 5m, and signals suffer from interference 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 making RFID work. When data is read from RFID tags it is passed by the reader to a computer or local application system via middleware.

These systems match the EPC number to information about the associated item via the Object Name Service (ONS) which points computers to sites on the World Wide Web where the information is held. Data generated by middleware is used by a second system, EPC Information 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.

Marlin Industries, a UK supplier of cable packaging and associated management services, is typical of companies that have implemented EPCglobal technology for asset tracking. Marlin is using RFID tags 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 environment.

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 drum and supply chain transaction details. Any data about the drum can 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, the food and drink industry is seeking ways 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 innovation at auto-ID company 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 RFID tags. “What makes this technology far more likely to succeed is its adoption by consumers as an integral technology in their smartphones,” says Terran Churcher, chairman of Codegate, a tracking systems and software supplier.

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 NFC in their 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 low cost tags and reading devices enabling wider adoption beyond smartphones in thousands of applications from opening hotel doors to reading nutrition and allergy warnings on food 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.