The challenge most logistic managers have with radio frequency identification (RFID) is their misunderstanding of how will help businesses improve their supply chain operations. However, while hype associated with RFID is still growing there are an increasing number of reports that numerous RFID pilots are being abandoned as not achieving their targets.
Many media reports are providing inaccurate information on the use and benefits of RFID such as:
- The technology will enable lorry loads of product to simply pass through a gate, achieving 100% read of each item on board
- The tags will be almost invisible, therefore the public will be subjected to invasions of privacy as the tags are hidden in clothing, i.e. interrogated as we enter stores and pass through their readers.
- It is essential to wait for a common standard to be agreed before implementing an RFID solution, presumably playing on the fear of buying a betamax version.
- It is best used as a replacement for the common barcode.
Much of the misunderstanding comes from the complexity of using RFID technologies and individuals trying to avoid the ‘laws of physics’ that the devices obey.
This article cannot hope to address all of the inaccuracies that abound in the endless articles that appear in multiple publications. Instead it will focus on three key business questions: How should I use RFID in my supply chain to best advantage? Will I fall foul of privacy laws? How do I maximise the return on my investment?
But first a quick summary of the technology – using lay terms. RFID was first used in World War II to determine airborne friend or foe – these large expensive systems saved lives and are still used in modern aircraft today. The technology has moved forward as manufacturing techniques have improved, smaller, more accurate, more affordable but still obeying the laws of physics.
Passive tags hold data within a chip and once activated by the energy within a radio wave, are designed to send back its held data to the receiving antenna. The factors affecting the performance of an individual tag are:
- Read range is affected by frequency selected, power output and tag (or better the antenna) size. For instance very small tags will only be read by antennas in close proximity.
- The more data on the chip the more power is needed to read it and the design of the system is more complex. There is therefore an optimum data / tag size / power output relationship.
- At low frequencies (LF) there is a problem of contention, preventing multiple reads. LF is not suitable for bulk product moves but could be effective for tracking individual items – trucks, cages
- At higher frequencies the radio waves get absorbed by water and are shielded by metal. It makes shampoo bottles and coke cans difficult to tag.
- Any RFID system will be affected by electrical noise and readers from one system are likely to interfere with another.
- A 100% read rate cannot be guaranteed.
It would appear the challenges are insurmountable! However this is not the case. Used in the right place at the right time in the supply chain process then RFID will provide:
- Cheaper audit / stock check processes.
- Better adherence to / visibility of process.
- Greater accuracy than an operator using a barcode reader.
- More real-time data than a barcode.
- Greater traceability of the individual item, even back to the field, sea or factory of origin
- Return on investment
The single biggest advantage of RFID in the supply chain is that of knowing where a specific item is at all times, without manual intervention. This advantage can therefore be used to:
- Improve customer care – “Mr Jones your product is currently in our Rugby warehouse and will be with you as promised”.
- Divert stock from one supply route to another (midstream) when customer demand requires. Thereby moving push channels to demand with the benefit of cutting stock outs. (Stock outs accounting for a loss of up to 4% of turnover).
- Reduce the euphemistic ‘shrinkage’ as leakage is spotted.
- Identity when sell-by dates will be a problem if delays occur.
In relation to privacy laws the likelihood is that if you are trying to simply achieve the above business benefits then you are unlikely to break any privacy laws. There are many advantages to using RFID; security / safety, adherence to health and safety, traceability, food standards and so forth. The laws of physics make it very unlikely that individuals will be unaware that the product is tagged and that someone is trying to read the tag.
The final question concerns achieving a return on investment. The nirvana of the 5 cent tag on individual products will be a long time in coming and the recommendation is to start to use RFID tags in your supply chain to track assets – cages, totes and pallets – in order to reuse the tags and recycle assets, reducing losses and determining where damage or misuse is occurring.
High value items will benefit from individual tags as well, but businesses going down this route need to be aware of the complexity of the technology and be prepared for bespoke solutions. One size fits all / off-the-shelf is not yet available. It is imperative to use solution providers that truly understand the challenges.
Finally, think about tags on assets, cases, pallets, cages and totes and how good it might be not to have to replace them so often. Think about tags on trucks, tractors and trailers and how these might be used to automatically trigger processes (notification of goods arrival to activate unloading teams). Think about tags on stock and tools and test equipments and how it might be good to automate inventory management. n
Chris Wright is managing director of Skillweb. Tel: 08700 707077.
Top RFID tips
1) The location that you want to operate in will affect how the tags will work, tags are differently affected by other tags, metal, water, moisture, us, electrical noise and more. Again get advice or always do a test both in the laboratory and on-site.
2) RFID does and has worked well. Benefits are accuracy, it is not line of sight, it is quick and it is more than simple barcode replacement – although this is a good place to start.
3) Barcodes tend to be single use, whilst RFID tags can be re-used time and time again. In this way they are ultimately cheaper than barcodes.
4) The 5 cent tag is a little way off as yet, at HF the take-up has not and will not reduce tag prices significantly (over the next two or three years); whilst at UHF there are still issues with worldwide standards (UHF Gen 2), resulting in the fear of mass producing the betamax. version of the tag. Prices will definitely fall going forward and therefore it is worth piloting and improving processes.
5) Critical to implementing an RFID solution is the management of data, plan on processing it quickly at the point of capture, minimise multiple reads, pass activities back to your central server and compare planned activities against actual. Minimise the flow of tag information, maximise events.
6) Look at tracking assets automatically within your own operations – lots of benefits here. Try to use product tags to record events, do not be scared to use more than one tag at different frequencies. Almost always use a