Toby Rush of Rush Tracking Systems explains in a nutshell what RFID technology is, what it can do, what it is used for, and how to start using it.

In today's technology-saturated world, computers provide businesses with the power to manage and synthesize vast amounts of information. But for half a century, computers have been dependent on humans to produce the majority of that information. Now, thanks to RFID (Radio Frequency Identification) technology, that's changing.

Put an RFID tag - a microchip with an antenna - on a product, case, or pallet of goods and a suitably equipped computer can now 'see' and 'talk' to it. As computers can begin to sense each other and interact with almost no human intervention, there is great potential for them to manage, synthesize, and act on the information they collect, allowing humans to focus on exceptions, and on the overall business process.

What are the implications?

RFID provides volumes of accurate and timely data, with almost no manual labour. If you had access to that kind of data about the products and processes within your organisation, what could you do differently? Many businesses operate with a 'just in case' mentality; but what if you could move to a 'just in time' approach? RFID gives you the information you need to streamline your operations and make properly informed decisions.

But RFID is not only there to provide a mechanism for computers to sense and communicate with other items around them. It also allows everyday objects to carry unique names. When a product receives its own identity, the systems can begin to ask much more interesting questions... When was I made? Where have I been? When do I expire? How do you care for me?

Some of RFID's applications include:

. Inventory management (raw materials, work in progress, and finished goods)
. Improved efficiencies in the shipping and receiving of goods
. Reduction in 'shrinkage' (loss of goods or assets)
. Reducing 'out of stock' situations
. Asset and resource tracking proving quality control
. Improving quality control

RFID TAGS

The devil in the detail

At first glance, the technology appears very simple. RFID is a non-line-of-sight solution comprising an RF (radio frequency) reader, and a tag (the microchip and antenna coupled together). The reader sends out an RF signal, and any tags within range respond. But, as with so many technologies, the devil is in the detail. Because RFID uses radio waves to communicate between the tags and readers, metal and water within the 'read field' cause big problems. Moreover, interference with existing wireless networks becomes a possibility. If the tags travel outside your organisation then there are wider implications in terms of security, frequency regulations, standards-based protocols, and tag formats.

There are of course solutions to these problems. Here are some basic questions that every potential RFID project should address before starting:

.How large a 'read field' do I need? Does the tag need to be read at 2 feet or 200 feet?

.Will different companies need to read the same tags? If so, standards such as EPC or ISO-18000 must be considered.

.How much data will need to be stored on the tag?

.How quickly must the tags be able to be read?

.To what environmental conditions will the tags be exposed? Do the items to be tagged contain metal or water? And will there be large metal objects in the read fields at the same time as the tags?

Why now?

RFID is not new - in fact it has been around since World War II. But in the past ten years, three things have happened which now make the RFID's potential ROI (return on investment) significant. And there's another factor which as good as guarantees broad acceptance of the technology:

.Global standardization on protocols and frequencies are emerging. The EPC (electronic product code) is becoming a de-facto standard for retailers, while significant pressure is already being applied, and progress being made, to make the EPC and ISO standards compatible. In terms of frequency, the Hi and Ultra-Hi frequencies are becoming the de-facto standard.

.The costs of both tag and reader are shrinking rapidly. Tags can be bought for less than US$0.50 each, or for less than US$0.10 when bought in bulk. Industry experts estimate that tags could be priced at less than US$0.05 in the next two years. And the cost of readers - currently between US$300 and US$1000 each, is expected to fall to between US$100 and US$400 during the same period.

.Internet and IT investments are providing the structural backbone. RFID systems produce massive amounts of data that need to be moved across and stored in a company's existing network. Recently implemented ERP systems, remote configuration and support, and data warehousing systems will be further enhanced with additional volumes and accuracy of data.

But the fourth and most significant event that makes RFID particularly relevant now is that two of the largest buyers in the world have mandated that suppliers apply RFID tags to cases, pallets, and even to some individual items. Wal-Mart insists that RFID be implemented by its top suppliers by 2005, while the DoD wants it implemented by all suppliers by 2006. One industry analysis suggested that the Wal-Mart alone could save as much as US$8.35 billion per year - which many say is more than the total annual revenue of half the companies on the Fortune 500 index. But Wal-Mart and the DoD aren't the only organisations considering the use of RFID as a global standard. Target, Home Depot, Lowe's, Tesco supermarkets, Marks & Spencer, Boeing and many others are actively engaged in RFID evaluation projects.

What next?

For certain, RFID is coming. For many, it's already here. Rather than operating in a reactive mode, begin working with the technology now. Start by learning the basics of RFID, analyse where it can benefit your organisation, conduct a pilot scheme, and talk to others in your industry to see what they think of it. Waiting for the mandate to come along will probably mean that you bear most of the cost with very little of the benefit.

About the Author:

Toby Rush is president of the Kansas City-based RFID Solutions provider, Rush Tracking Systems. The company specialises in inventory management, asset tracking, and supply chain management. Its services include consulting, hardware and software evaluations, systems integration, and installation. The company is also an RFID hardware reseller.

Rush can be contacted online via:-
www.rushtrackingsystems.com

Copyright 2003 Toby Rush