You’ve probably heard about Radio Frequency Identification (RFID) around the traps and wondered what the fuss about it. If you are one of the lucky owners of an e-Tag in Melbourne and Sydney you will have already experienced the wonders of this technology. I hope this hasn’t put you off the rest of this article, which will give you an overview of what an RFID system is and some news about Coles-Myer and Wal-Mart and their RFID ambitions.

RFID Primer

First, what is an RFID? Radio Frequency Identification (RFID) is an automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders. RFID can communicate, wirelessly, with each other and exchange all manner of information. For example, an RFID can be stuck onto products, just like a bar code. The RFID tag can be coded with information about the individual product such as serial number, product group, time/date/place of manufacture etc.

RFID’s come in three types: passive; semi-active and active; – it’s important to know the difference so that you can decide what type of RFID you need for your business [1]:

Passive RFID tags have no internal power supply. A small electrical current is induced a an incoming RF signal and is just enough to transmit a reply back. An example is Figure 1 from The Kennedy Group. Due to it’s small size you, some human implant experiments are being conducted, that places the tags just under the skin (see Figure 2). Passive tags have practical read distances ranging from about 10 mm up to about 6 metres.

Figure 1: Thin, passive RFID that can be produced using a printing press technology

Figure 2: Photo of Amal Graafstra, a Washington state native and business owner, having an RFID chip implanted in his left hand in early 2005.

Semi-Active RFID tags are very similar to passive tags except for the addition of a small battery. This battery allows the tag IC to be constantly powered. This removes the need for the aerial to be designed to collect power from the incoming signal.

Active RFID tags, on the other hand, have an internal power source which is used to power any ICs and generate the outgoing signal. Think of tollway e-Tags. They may have longer range and larger memories than passive tags, as well as the ability to store additional information sent by the transceiver.

In 2004, Nokia released a kit that can enable cell phones to act as readers. Tek Industries has released an add-on to iPAQ, Handera, and Palm handheld devices that does the same.

At large volumes passive RFID tags can cost as low as 10c each (1 million units or more). RFID readers traditionally cost between $1000 to $3000, but new low-power readers may come onto the market from as low as US$20.

As with all technology deployment you must take into account the re-training and project management costs.

Case Studies

Wal-Mart

Wal-Mart have been actively working with their top 100 suppliers, since 2003, to label all of their stock with RFID tags to enable merchandise to be identified without visually inspecting them, thus improving supply-chain efficiencies. Originally Wal-Mart mandated that all of its suppliers use RFID technology by the end of 2005, but suppliers have asked for an extension to this date, due to difficulties in switching to this new technology. Wal-Mart was the pioneer of bar-code technology in the 1980s.

The University of Arkansas recently (October 2005) conducted an independent study that showed a 16 percent drop in out-of-stock merchandise in RFID equipped stores compared to the non-RFID equipped control group. RFID stores were 63 percent more effective in replenishing out-of-stocks. The study also showed that manual orders reduced by 10 percent.

This is an important milestone for the RFID industry. While there have been plenty of technical research and a lot of theorising about it’s benefits, there had been very little hard evidence of actual significant return-on-investment on such systems.

Coles Myer

Last year, Coles Myer teamed up with Sun Microsystems, Accenture and EAN to develop an RFID tracking system for their distribution centres. Equipment installed at the distribution centre’s dispatch door and the supermarket receiving dock will allow real-time tracking of the roll-cage’s arrival at the dock. The readers will register on Coles’ database the arrival of the roll cage [2].

Sun Microsystems managing director Jim Hassell said “The use of RFID technology is seen as the technology that is going to revolutionise the supply chain. By automatically tracking the movement of stock and assets, this technology will enable organisations to increase efficiency, reduce cost and complexity not only for the supply chain but all company assets.” (via ZDnet)

About Klassic Ventures

Klassic Ventures is a technology consulting company that offers highly personlised service. If you have a technology question, we can answer it! There’s no charge for initial background research work. Contact our CEO, Graeme Klass, at graeme@klassicventures.com.

References

  1. http://en.wikipedia.org/w/index.php?title=RFID&printable=yes
  2. http://www.zdnet.com.au/news/business/0,39023166,39151152,00.htm
  3. http://www.kennedygrp.com/home.cfm?cfid=116634&cftoken=72986022

If you would like more information on Wireless Networks, please contact graeme@klassicventures.com.

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