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RFID -- Tag, You're It!  (11/2005)

    by Douglas Dixon

Learning RFID
Tagged Out?
Getting Tagged
References

Tag, you're it! -- If it only were so easy for businesses that need to track and manage their inventory -- all those cartons and individual products, in storage, in transit, and on retail shelves. Packages have a way of being in motion, whether intentionally or illicitly, and businesses need quick and cost-effective ways to keep track of them. Manually counting and scanning and re-checking just does not cut it in these days of just-in-time inventory.

The holy grail for a wide range of industries is tagging with RFID -- Radio Frequency Identification -- a technology that allows information about an object to be read wirelessly, using radio waves. Even better than manually scanning a bar code, RFID allows a remote reader to count the contents of a shipment or update the current inventory on store shelves, automatically and on demand.

For New Jersey travelers, the most familiar use of RFID is the EZ-Pass electronic toll collection system used in the Northeast U.S. (www.ezpass.com). Just attach the small tag to your windshield (behind the rear view mirror), and you can avoid the long lines at toll plazas by rolling through the EZ-Pass lanes (at a moderate speed, of course). The system reads your ID as you pass through the toll booth, and automatically deducts the toll from your account as you drive on.

        RFID at the gas pump

But beyond this kind of convenience factor, RFID offers compelling benefits to industry in improving efficiency and reducing costs. Demand from major retailers including Wal-Mart and Target, and from the Department of Defense, is driving adoption throughout the supply chain. In particular, Wal-Mart established aggressive mandates for its suppliers to implement RFID tagging of cases and pallets for its distribution centers, with a January 2005 milestone for its top 100 suppliers, and January 2006 for the next top 200 suppliers.

Learning RFID

But how do companies jump on this freight train? How do they understand the technology and evaluate products, against issues like cost and reliability? How can they integrate and then manage a new RFID system with their existing IT systems and supply chains?

DeVry University is addressing this need with a new RFID program inaugurated in July 2005, with initial courses in North Brunswick, N.J., located near many major pharmaceutical corporations, and in Arlington, Va., close to many government agency headquarters (www.devry.edu).

DeVry, based in Oakbrook Terrance, Ill., is one of the largest publicly held higher education companies in North America . The North Brunswick campus includes electronics and networking labs where students can work with RFID system simulations and test equipment.

The course is offered though a partnership with RFID Technical Institute Inc. (RTI), a Cambridge, Mass., education services startup launched in January 2005 (www.rfidtech.com). Ann Grackin, RTI cofounder, CEO and president, is a former consultant in the supply chain and logistics industries.

The RTI and DeVry curriculum is being reviewed by the International RFID Business Association (RFIDba), a not-for profit trade association based in McLean, Va. (www.rfidbusiness.org).

Tagged Out?

So is RFID a done deal? Deployment is hampered to some extent by standardization issues, intellectual property conflicts, and compatibility of existing products with upgrades to new Generation 2 standards. Wal-Mart has reportedly been showing flexibility in working with suppliers to meet its mandates.

Standards for both Electronic Product Code (EPC) and RFID are being developed by EPCglobal, with its US-based member organization, EPCglobal US, based in Lawrenceville, N.J. (www.epcglobalus.org). Similarly, the EPC and UCC bar code standards are being coordinated by GS1 US Inc., also based in Lawrenceville, which was formed by the combination of Uniform Code Council Inc. and EAN International (www.gs1us.org).

"The issues around a host of standards are important," says Ann Grackin of RTI, "for firms who have been 'buying the message' that RFID is more than barcodes on steroids. Integration standards, global frequencies, Gen 2 and its IP issues. All these add to the challenges. However, this is the normal course of public debate, entrepreneurship and competition. We have been here before and we work it out -- we don't stop; we discuss, compete and move forward."

Getting Tagged

And there are cost issues in getting tagged with RFID, especially for low-margin retailers, both for tags and for the required readers. The reader broadcasts radio waves and receives back signals from the tag, which it passes on as digital data to the IT system. The microchip in the tag can store up to a couple kilobytes of data, not only identifying the contents, but also including information such as shipment tracking or product delivery dates.

The goal of a five-cent tag is still not at hand. Simple passive RFID tags can cost 20 to 40 cents. These are basically a microchip attached to an antenna, with no power source and no transmitter, and can be read from only a short distance (a few inches to 30 feet). They can be used for tagging individual items, and can be enclosed in a plastic card or key fob (as with the Exxon Mobil Speedpass payment system).

        RFID tags

Active tags can be read from longer distances (up to 300 feet), and are used for large assets, such as cargo containers, rail cars, and palettes. These include a transmitter and power source to broadcast their information for identification and tracking, and can cost $10 to $50.

But the broad range of possibilities for RFID is being demonstrated by the interest of the U.S. State Department in RFID for e-passports. Of course, it's not necessarily a good idea for American citizens to be broadcasting their existence as they walk through the streets of foreign countries, much less transmitting the details of their personal identification to eavesdroppers. New proposals therefore suggest encrypting the information, and providing a radio shield to muffle the chip when the passport is closed. The State Department is also encouraging other countries to adopt similar systems.

The bottom line on RFID adoption, says Grackin:

"Many RFID programs are quietly moving along, since they are not caught up in the world of standards, and also are dealing with proven (and older) technologies. And once people come to understand the long-life uses of these technologies, the relative price issues will be less of a mental obstacle. It's a simple formula: how long you will use a device and what value it will deliver, protect, etc. A seven year product purchased for $100 that guards 100 shipments a year with electronic components of high value, and prevents theft, starts to look pretty cheap. In time people will understand."

References

EZ-Pass electronic toll collection system
    www.ezpass.com

DeVry University
    www.devry.edu

RFID Technical Institute Inc. (RTI)
    www.rfidtech.com

International RFID Business Association (RFIDba)
    www.rfidbusiness.org

EPCglobal US
    www.epcglobalus.org

GS1 US Inc. -- was Uniform Code Council Inc.
    www.gs1us.org