ABOUT RFID: Q & A
Many companies are familiar with radio frequency identification (RFID), in general terms, but sometimes find it difficult to make the decision to move forward. For organizations that manage global supply chains and vast trading partner networks, the benefits RFID are substantial. The increase in efficiency, data integrity and inventory visibility help to lower costs, as well as helping to deliver goods faster, and more accurately.
Mapping out a strategy is complex and takes into consideration
all aspects of the enterprise — from warehouse and transit planning to network
infrastructure requirements. As with any technology, there are still challenges
that exist with RFID, including the meeting of global standards, and simply, affordability. So, many questions remain unanswered.
As your Mobile Computing and Barcode Scanning experts, BarcodeIO will provide answers to some of the most frequently asked questions about RFID today. What follows are common FAQs, organized into four main categories: business, technology, financial and industry specific.
Business frequently asked Questions
technology frequently asked Questions
financial frequently asked Questions
Industry specific frequently asked Questions
Business Issues
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What can RFID do for my Company? |
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The business implications of RFID are immense and include gaining competitive advantage and freeing up working capital. RFID improves supply chain visibility, lowers operating expenses and lifts sales. The benefits are pervasive throughout
the supply chain — from the manufacturer to the distributor to the retailer to the consumer. In a highly competitive business environment, RFID represents
the “next frontier” of supply chain efficiency that many companies are striving to attain.
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What is the average timeframe to consider when planning an implementation? |
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Try to avoid waiting until a specific mandate is looming ahead. Give yourself enough time to really understand what RFID can and cannot do. Figure out how this technology fits into your particular business process before you move forward with a rollout. In terms of a timeframe for this, allow at least six months which covers moving from the initial touch to learning what it can do to a relatively small staged pilot to an initial rollout.
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How do I go from a small pilot to a broader implementation? |
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In general, the best advice is to stage your pilots progressively. Start out with a technology pilot and then move to a functional pilot where you’re trying to make the technology work in your business process. And finally go to a real business pilot where you are actually measuring the return on investment (ROI). You should build as you go, because each stage represents an opportunity to refine systems and processes to reduce costs significantly at the next stage.
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Once RFID pilot systems are up and running, how do I continue to receive the strong business benefits without it becoming burdensome to the enterprise? |
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Scalability and sustainability of enterprise-wide RFID solutions encompasses the critical next stage. Today, most people seem to accept that as a technology, RFID works. This means that companies can tag items in the supply chain such as pallets and cases, and read them reliably. The next challenge the industry faces is making RFID not just work, but also making it work at scale — make the technology manageable.
There’s a big difference between an RFID pilot with tens of readers and a real implementation with hundreds or even many thousands of readers. How are people going to deploy these readers reliably and monitor them to make sure they are working effectively? If companies are going to rely on RFID data, they must be able to rely on the systems that gather that data.
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Why must I have both a bar code and RFID system? Will one suffice? |
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There’s some talk that the RFID tag means the end of the bar code. That’s simply not true. Right now, even with several successful pilots, RFID is going to take years to become pervasive throughout the enterprise environment. Many of today’s RFID implementations are at the pallet and carton level. And in these scenarios, RFID performs wonderfully.
However, unit-level item identification is still the domain of the bar code. Until every item is 100 percent RFID, the bar code remains an important part of the supply chain and trading partner networks. RFID and bar codes are not mutually
exclusive. It’s remarkably similar to having two different blades on a Swiss Army knife. Just because you have a corkscrew blade, does that mean you are going to throw away your pen knife blade? Obviously not.
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What is the status of the electronic product code (EPC) standards? What is the impact? |
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The EPC standard originated from the MIT Auto ID Center, a private/academic consortium backed by leading retailers, manufacturers and technology companies. Initially, there were two classes of EPC tags - Class 0 and Class 1. EPC is global, but now there is a single, next-generation tag standard — UHF
Generation 2. In many ways, Motorola identifies a number of similarities between RFID and WiFi® (IEEE® 802.11) systems. Just as we helped standardize robust
WiFi solutions for many markets, we are bringing robust, scalable RFID solutions to market to address these problems. Standardization drives cost, and it’s vital to
enterprise-wide implementations. And higher volume means lower costs. Most previous RFID implementations were proprietary in nature — one company controlled everything. Everything was custom — the readers, the tags and the data format. Standardization delivers one vision that’s highly executable and drives the adoption forward, lowering costs with increased volume. EPC is —
without a doubt — the RFID standard of the future. |
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Technology Concerns
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What is state of the art for RFID today? |
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EPC has emerged as the main RFID standard for today’s supply chain initiatives and trading partner networks. Similar to a vehicle identification number (VIN), EPC is a unique identifier that is stored within an RFID tag, which contains both a chip and an antenna. Once the EPC information is accessed using an RFID reader, this unique identifier becomes available for use in tracking the tagged item throughout the supply chain - from manufacture to retail. Currently, tagging and reading at the pallet level is successful with the RFID technology being
tested. And tagging and reading at the case level works when cases are on a conveyor or in a material handling system.
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What are the technology challenges with RFID? |
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There are five main phases with every technology, and RFID must go through them as well, the same way that light bulbs, computers and washing machines progressed on the path to widespread adoption. The first phase is when companies are basically making the technology work. It’s been demonstrated in 2004 that RFID technology works.
RFID is in the second phase which is making it manageable. This is when the technology works and can be deployed and scaled at a reasonable cost with minimal overhead, and you can begin to derive significant business benefits. Looking to the future, the next phase of technology adoption is making it essential. RFID will move from something that’s useful to a must-have in every supply chain operation, based on its proven business value. From essential it will go to ubiquitous - meaning that it will be everywhere in the enterprise. And finally, RFID will be so ubiquitous that it becomes transparent - it’s everywhere, and it’s been there so long that it’s not noticed anymore. So RFID today has gone from the making it work phase to making it manageable phase and companies are finding the business benefits and ROI. Scaling on an enterprise-wide level must
be addressed because RFID isn’t really a rip-and replace solution. It must work seamlessly with other technologies such as bar code data capture, wireless
networks and portable data terminals. The key here is in viewing RFID as one part of a broader solution set (i.e., warehouse management system - WMS).
A large part of the answers to these questions of scaling, reliability and integration is going to be addressed by the technology companies. Bridging
the gap requires architectural solutions that address the need to capture, move and manage a wide variety of data, whether that data is RFID, bar code,
voice or key entered.
Keep in mind that all of these challenges are to be expected, because RFID is simply following the same phases that every other technology experiences — from the light bulb to the washing machine. The important thing to understand is that many technology companies are recognizing the need to build RFID systems that integrate well with existing infrastructures.
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What kind of products will I need for an RFID deployment? How do I manage all these devices? |
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There are really two sets of products that need to be built to meet RFID needs. The first is a core hardware product … or reader. Several different form factors are necessary to ensure that RFID easily integrates into existing business processes in today’s retail supply chain. For example, a classic dock or portal reader will reside on an inbound or outbound dock to read whatever comes into or out of the facility. There’s also a strong need for mobile readers so that product is tracked as the driver is moving around the warehouse. It’s a great value added way to read the data, but it also affords you an acceptable substitute for a larger number of dock and portal readers. In addition, conveyor readers read individually tagged cases at high speeds, some at up to 540-feet a minute. Handheld mobile computers with an integrated RFID reader are vital as associates move inside the warehouse or around the store. Mobile computers let you take advantage of the RFID tags without relying solely on fixed readers.
And finally, a layer of management software and appliances ties this network of disparate devices together. It offers a central point that enables you to see what’s working and what’s not, what data is coming in and where it’s going. With it, you can manage both the data and the devices.
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How do I ensure the security of the EPC data? |
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Unattended data capture is one of the stronger business benefits to RFID. And this leads to the question: How do you know that the data is secure and accurate? Work continues to develop new security protocols between the tag and reader, but the fact that the range of the technology is limited really does significantly minimize the risk. More important is the need for a robust wired and wireless network security methodology to ensure that as the RFID data moves around a corporation, and possibly over large geographic areas, it remains secure. |
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Financial Concerns
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How expensive are EPC tags and readers? |
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EPC readers typically cost several thousand dollars for a typical system that includes a reader, antennas and a mounting structure. However, for most companies, the most compelling question is: “how much are the tags?” As EPC becomes more widely accepted, it is likely that literally tens of billions of tags will be needed for the pallets and cases that move throughout the global supply chain. Given this volume, there is a strong incentive to keep tags costs low and to seek continuing reductions in price. Today, passive UHF tags utilized by the EPC initiative typically cost about 15 cents when purchased in quantities of millions. There is a belief that this cost can be reduced to as low as 5 cents over the next few years, if tag requirements rise to the billions to allow volume efficiencies in the production of the tags. To a certain extent, it is a little bit of a chicken and egg problem — tags will be really cheap when people buy billions of them, but people will only buy billions when they are really cheap. The good news is costs and prices tend to decline consistently every year. |
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Industry Specific Concerns
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Is all of the RFID focus on retail? |
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Right now, RFID is more prevalent in the retail supply chain, with the emphasis on applications at the pallet and case level for select major retailers. RFID is also beginning to be implemented at the item level for increased visibility into inventory and real-time notification of out-of-stocks. Most of the attention is focused on retailers because this is where the most visible pilots are being conducted. Significant pilot activity is also occurring at the United States Department of Defense (DoD), which has its own RFID initiative. Now that the EPC standards are well established, the technology is moving quickly to other vertical markets that have a need for the traceability that RFID can supply — such as manufacturing, for tracking e-pedigrees of pharmaceuticals, aviation
for passenger safety and baggage tracking, transportation for tracking cargo containers and vehicles, and more. |
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Glossary of Terms
BarcodeIO offers a list of terms utilized in the RFID: Q&A section as well as additional industry-standard terminology.
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