The RFID Countdown

You've probably heard a lot about RFID (radio frequency identification) lately. In the last few years, the technology seemed to all but go away. In June 2003, however, that all changed. Retail giant Wal-Mart announced that its top 100 suppliers would have to begin tracking items within their distribution centers at the pallet and case level using RFID by January 2005. Furthermore, Wal-Mart said those suppliers that didn't hit this goal by January 2005 couldn't do business with the retail giant. As is often the case, when Wal-Mart talks, enterprises listen - especially those who have a business stake in the matter. Presently, you can hardly flip a few pages in any business or IT publication before seeing an RFID commentary. In fact, some analysts are comparing the quest to become RFID-enabled with yesteryear's quest to become Y2K-compliant. As we all know, Y2K proved to be more hype than threat. Should you treat RFID the same way? Or, is this promising technology able to live up to its promises?

The Cost, Components Of An RFID Solution
To answer the question whether RFID is something you need to concern yourself with, let's first take a quick refresher as to what RFID is. RFID is a non-line-of-sight solution comprising a microchip and an antenna coupled to form a tag (also known as a transponder), and an RF (radio frequency) reader (also known as an interrogator). RFID tags can hold anywhere from 2 KB to 10 KB of data and operate in different frequencies, including 100 to 150 KHz, 13.56 MHz, 900 to 250 MHz, and 2.4 GHz in the United States. Tags can be passive or active and read-only or read-write. Passive tags can send data only after they have been energized from the RF signal sent by an RF reader. Active tags contain built-in batteries, which enable the tags to transmit RF signals without being activated by a reader. Tags also come with a variety of antennas, corresponding to the frequency the tag sends and receives. The cost of RFID tags varies anywhere from 50 cents apiece to $70 or more apiece depending on the type of antenna the chip uses, whether the chip is active or passive, and whether it is read-only or read-write capable, as well as how the tag is housed and the quantity that is purchased.

RFID readers can be used in a fixed position or as part of a mobile solution, depending on their application. The readers, which function much like WLAN (wireless LAN) access points, are designed to detect the presence of tags within a certain vicinity. Readers do this by transmitting a signal, which "awakens" the passive tags and elicits a response. After tags and readers confirm one another's presence, the two components authenticate one another (i.e. make sure the other is authorized to send and/or receive data). Next, data is shared back and forth, which may result in new information getting added to the read-write capable tags.

After data is gathered by the RFID reader, middleware is used to translate the data and import it to a back end application such as a WMS (warehouse management system), supply chain management solution, or an ERP (enterprise resource planning) solution.

RFID Isn't An 'Asset Tracking Only' Technology
One of the primary applications for RFID is to track assets. The agricultural industry, for instance, has been using RFID for years as a viable alternative to bar codes to track livestock. But, beef-eaters aren't the only ones benefiting from RFID. Manufacturers and distributors are also finding viable uses for this technology. "Just like you can't put a bar code on a cow," quips Mike Lowry, president and CEO of Lowry Computer Products (Brighton, MI), an automatic identification and data collection (AIDC) systems integrator and distributor, "you also cannot put a bar code on an asset that is exposed to certain harsh environments." In the automotive industry, for example, RFID tags are affixed to engines and other automobile components as a way to record tasks completed along each step of the manufacturing and assembly process. Because these components endure processes such as painting, bar-coded labels cannot be used on these items during the manufacturing and assembly processes. RFID tags, on the other hand, can accommodate such conditions. By using an RFID solution, data components can be automatically captured and used to ensure quality standards are met. "If a step is skipped and a part is sent to the next work station, the reader detects the missed step and won't allow the next task to be completed," says Bill Allen, marketing manager for semiconductor and AIDC vendor Texas Instruments RFid Systems (Plano, TX). "Likewise, if an automobile component malfunctions in the field, it can be sent to an authorized dealer who can use the component's tag to identify where it was made and can alert the manufacturer."

Another popular application for RFID is access control - especially for applications that use biometrics as part of the solution. Unlike magnetic stripe cards, which hold 64 bits of data, smart cards (plastic cards with embedded RFID tags) can store more than 31 times as much data. "This makes them ideal for storing information such as fingerprint data, passwords, and other authorization information," says Lowry. "Additionally, security administrators can define very specific authorization parameters, which may allow a person to have access to a specific room within a building during a one-week period only, for instance."

RFID is also finding its niche in some retail applications as an alternate means of payment. Exxon-Mobil has more than 7 million customers using its RFID-enabled SpeedPass. Using RFID key ring tags (called fobs), Exxon-Mobil customers can pay for fuel up to 15 seconds quicker than they can swipe a credit or debit card. Additionally, Exxon-Mobil is able to use the fobs to store customer loyalty information, which is used to offer customers complimentary store items after gas and store-item purchases reach a specified amount. Providers of RFID payment devices allow customers to put daily limits on their RFID fobs, so that if the fob is stolen and used before the owner has a chance to have the fob deactivated, the thief cannot rack up the owner's credit limit worth of fuel and store items.

What's Holding Back RFID Adoption?
With so many practical applications for RFID, one has to wonder why more enterprises aren't using it. Some companies may legitimately not require the extra storage capacity and other benefits associated with this non-line-of-sight solution. However, there has been a bigger impetus keeping many enterprises from adopting RFID solutions. Like other technologies, it is standards - or lack thereof - which has halted the widespread progression of RFID. "Without standards, solution upgrades become a rip and replace experience," says Daniel Arroyo, senior marketing communications manager for supply chain solution provider Intermec (Everett, WA). "One of the reasons these standards haven't emerged sooner was due to a disconnect among RFID users, vendors, and standards bodies." Some RFID standards bodies allegedly created unsubstantiated hype among users about 5-cent tags. As users approached vendors about RFID solutions, they were surprised to discover the cost of tags was at least 10 times what they expected, so they held off their deployments. Vendors felt reluctant about providing feedback to standards bodies for fear of being viewed by users as culprits for holding back RFID progress. The end result: RFID progress was stalled.

Just a few months following Wal-Mart's announcement that its top 100 suppliers must integrate RFID into case and pallet level shipments by 2005, however, another important RFID announcement was made. The UCC (Uniform Code Council) and EAN (European Article Numbering) association teamed up with the Auto ID Center at MIT to form EPCglobal, Inc. The new organization's goal is to promote the EPC (electronic product code) Network, an open network that will enable real-time identification and sharing of information via the use of EPC-compliant RFID tags and readers. One of the organization's top initiatives is to enlist help and support from vendors, users, and RFID standards bodies.

The first change that will hopefully come from EPCglobal is to refocus the public away from the 5-cent tag hype and onto where the real value of RFID resides - supply chain applications. RFID also has benefits for access control applications, where detailed levels of authorization have to be defined and/or when biometrics is needed. Beyond the 5-cent tag and beyond the goal of achieving RFID standards, there is a bigger question that needs to be answered, however. The question is: Are you ready for RFID?