...One Giant Leap For RFID

Frontline Solutions Expo bills itself as a showcase of technology to help end users streamline communication throughout the supply chain. While the event delivered on this promise, there is no question that the recent Frontline Solutions Expo (held in Chicago) was lackluster compared to the same show of years' past. The whole event seemed like a diet version of past Frontline Expos - it was similar to past events, but you definitely knew it was lighter and less fulfilling.

However, this is not to say that all of Frontline was doom and gloom. In fact, I believe Frontline showcased a very big announcement that will fundamentally change the way companies handle their supply chains. In a word - or more precisely, an acronym - the news involves RFID (radio frequency identification).

RFID Invades The Supply Chain
With all the optimism of fervent Chicago Cubs fans, RFID vendors recited the same "this is our big year" mantra at each of the last few Frontline events. However, applications and end user success stories for the read/write tags with built-in antennas were tough to pinpoint. Some vendors would point to library applications where the tags, in the form of labels, are inserted into the covers of books to track shelving accuracy. But, this hardly demonstrated a horizontal use for the technology. At this past Frontline, however, RFID now had its first huge supply chain app - and that's big news.

CHEP (a business unit of Australia-based Brambles Group) plans to attach RFID tags to the more than 140 million pallets it leases to companies in the supply chain industry. The tags, along with RFID readers in DCs (distribution centers) and warehouses, would allow CHEP to track and inventory its pallets in real time as they move throughout the supply chain. And, with 140 million pallets, it's easy to see how reducing leakage would easily cover the cost of the implementation. It's also easy to see how this move may create a de facto RFID standard.

The CHEP implementation includes Intellitag UHF (ultra high frequency) RFID technology from Intermec, tracking software from Savi Technology, and integration services from Marconi InfoChain. Since CHEP controls about 60% of the worldwide pallet business, its RFID implementation will make the chosen technologies pervasive in the supply chain. And, DCs with this technology in place are far less apt to implement a different RFID vendor's technology in the future. It's a safe assumption that DCs will simply opt for more of their current RFID technology in an effort to avoid burdensome integration issues.

Who Wins, Who Loses?
This one decision by one end user may actually make the UHF RFID standards debate a dead issue. The big winners, obviously, are Intermec and its partners. As for the supply chain as a whole, total benefits from this influx of RFID technology will not be immediately realized.

Bill Gates once said that the way to make money in the computer business is by setting de facto standards. No one would argue that Microsoft hasn't made big money from setting de facto standards. Whether the end user community is better off because of those standards, that's a whole other issue altogether.