Radio Frequency Identification (RFID)

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Introduction

Radio frequency identification (RFID) is one of the most promising and anticipated technologies in recent years. Magazine articles, television shows, analyst papers, and others are frequently trumpeting RFID's potential benefits. Still, many companies want to know what RFID is, how it works, the current standard and compliance environment, and some considerations to ensure the most successful implementation and ROI.

Manufacturers, retailers, logistics providers, and government agencies are making unprecedented use of RFID technology to track, secure, and manage items from the time they are raw materials through the entire life of the product. Manufacturers especially can benefit from RFID, because the technology can make internal processes more efficient and improve supply chain responsiveness. According to a study by AMR Research, early RFID adopters in the consumer goods industry reduced supply chain costs between 3 and 5 percent and grew revenue between 2 and 7 percent due to the added visibility RFID provided.

RFID can provide immediate, tangible benefits. Organizations who take the time to understand the technology’s capabilities and limitations can modify or create business processes to meet customer requirements, while increasing inventory visibility and streamlining operations.

The Technology

RFID wirelessly exchanges information between a tagged object and a reader/writer.

An RFID system includes:

· one or more tags (also called transponders), which includes a semiconductor

· chip and antenna;

· one or more read/write devices (also called interrogators, or simply, readers);

· two or more antennas, one on the tag and one on each read/write device; and

· application software and a host computer system.

Because direct line of sight between the reader and tags is not necessary, there are many more placement options for RFID readers than were possible with bar code labels. Readers can be placed in a fixed-position or be portable, just like bar code scanners. Fixed-position readers can be mounted to read items traveling through dock doors, conveyor belts, loading bays, gates, doorways, and other areas. Readers may also be attached to lift trucks and other material handling equipment to automatically identify pallets and other items that are being moved. Interrogator capabilities also are engineered to now be able to fit into smaller mobile devices.

Performance Features

Radio frequency is not an optical technology and does not require line of site between the tag and reader—an important distinguishing feature that gives RFID many performance advantages compared to bar code and other automatic identification technologies. Because RFID is a radio-based technology, performance considerations for its implementation are that:

· RFID can be susceptible to interference from other radio transmissions and metal,

· some materials absorb RF signals more readily than others, and

· sensitivity to interference varies by frequency and the usage environment.

These factors can impact the tag read/write range and speed. Most scenarios can be handled by using the proper specific tags, readers, and applications.

Because no line of site is required, RFID–tagged objects can be read in different orientations at very high speeds. Orientation sensitivity depends on the antenna design and the amount of interference present. In some environments, tags may be read in any orientation. This gives product and package designers tremendous flexibility in tag placement options and eliminates the need for human intervention to scan labels or ensure items are placed properly for reading in convey or belt or retail checkout applications.

Some vendors offer systems that can be programmed to search for specific tags within a field. This functionality, "group select," improves processing speed because only the tags of interest are identified and read, and other tags in the field can be ignored.

Group select is extremely valuable for logistics and retail operations. For example, distribution center workers could use mobile RFID readers to quickly search dozens of cartons from an incoming shipment to locate items needed to cross dock. Retailers receiving mixed-load shipments could locate hot-selling products and promptly place them on the shelves before the rest of the shipment is unloaded. Special orders also could be prioritized for processing.

With RFID's ability to read and write to tags automatically, every second could easily produce enough data to overwhelm an information system. Properly analyzing the specific data and timing needed for processes and systems is critical. Planning a successful RFID implementation also requires more than simply extensive knowledge of RFID technology. The enterprise and its technology partners need knowledge and real experience with other data collection technologies, mobile computing, industrial and wireless networking, manufacturing, supply chain and distribution processes, and enterprise software.

Security

It is extremely difficult to counterfeit RFID chips. A hacker would need specialized knowledge of wireless engineering, encoding algorithms and encryption techniques. Different levels of security can be applied to data on the tag, so information could be readable at some points of the supply chain, but not others. RFID is very valuable as an authentication technology, as well as an identification technology, and some consumer goods manufacturers are embedding it into their products to fight counterfeiting and diversion.

Standards

Standards initiatives for logistics and item-level tracking also specify these frequencies. For example, Wal-Mart is basing its RFID supplier tagging requirement on the proposed Electronic Product Code (ePC) specifications developed at the MIT Auto-ID Center (and now managed by EAN International and ePC Global).

Applications

Available frequencies, tag, and reader designs give users many choices to consider when planning an RFID application. Finding the right combination of features is fairly straightforward once users begin planning their applications and develop an understanding of their needs and goals.

Many highly effective applications take advantage of existing data collection systems and processes as appropriate, and enhance them with RFID for operations where more functionality is needed. This approach fully leverages existing technology and successful systems, which makes the ROI for RFID easier to measure and faster to attain. For unit-level identification, bar code systems provide excellent performance and are still the most cost-effective option. Bar code technologies have some limitations and are not as advantageous at other packaging levels. As a result, carton, case, and pallet processing applications provide many opportunities to complement bar code systems with RFID.

Retailers in general, merchandise, grocery, apparel and other categories are piloting RFID programs and reporting improved sales from greater stock availability, cost savings, and increased responsiveness, especially in receiving and inventory control operations.

As these applications continue to prove their value, more retailers are expected to announce compliance tagging requirements; many manufacturers may find themselves being asked or required by a retail customer to apply RFID tags to shipments.

RFID also is currently being used in conjunction with asset management, production tracking, shipping and receiving, regulatory compliance, returns and recall management, and service and warranty authorizations.

RFID technology is mature, highly functional, and supported by current and emerging standards. Companies in all segments of business are proving the value of RFID every day.