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How it works and why it pays

RFID (radio frequency identification) is one of the most promising and anticipated technologies in recent years. Chances are we've now all read or heard about the potential benefits that await companies that implement RFID systems.

But let's pause for a minute.

As in any emerging technology field, there's a tremendous amount of confusion and misinformation to be had. Google RFID and you get more than 2 million results. If only a fraction of those present information that's not quite technically correct, that's a lot of misinformation and the potential for some bad business decisions.

A good grounding in what RFID is, how it works, current standard and compliance environments - and some considerations about how to make any implementation successful - minimizes the chances of missteps and maximizes the potential for successful decision-making. Although most of the talk about RFID current revolves around retail and consumer goods supply chains, the benefits experienced in warehouse enterprises and manufacturing supply chains are available to companies in many areas of endeavor.

Tried and true
First of all, RFID is not new. Manufacturers, retailers, logistics providers and government agencies already are making unprecedented use of RFID technology to track, secure and manage items, from the time they are raw materials through the entire life of a product.

But let's pause for a minute. Many drivers have seen RFID in action at automatic toll collection stations used at bridges, tunnels and turnpikes. In business, RFID is used to identify pallets, containers, vehicles, tools and other assets, monitor inventory, and route materials through production processes.

Manufacturers especially can benefit from RFID because the technology can make internal processes more efficient and improve supply chain responsiveness. For example, early RFID adopters in the consumer goods industry reduced supply chain costs between 3 and 5 percent and grew revenue between 2 and 7 percent because of the added visibility RFID provided, according to a study by AMR Research.

The development of global RFID standards - those already in place and those now being adopted - and the decision by major retailers and others to implement RFID is spurring market adoption. These standards protect end users by providing technology frameworks within which companies can create RFID products and systems that are compatible and interoperable. Major retailers and consumer good companies, for example, are basing RFID supplier tagging requirements on the Electronic Product Code (EPC) specifications originally developed at the MIT Auto-ID Center and now managed by EPCglobal Inc.

Nuts and bolts
RFID is a type of data collection technology that, unlike bar code systems, requires no line of sight or manual scanning. RFID-tagged objects can be read in different orientations at very high speeds. Here's how it works:

RFID wirelessly exchanges information between a tagged object and a reader/writer.

An RFID system:

  • One or more tags. Each tag includes a semiconductor chip and antenna mounted onto an insert. The insert then is encapsulated into an appropriate protective material to form a finished tag or label;
  • One or more read/write devices, usually called readers;
  • Two or more antennas, one on the tag and one on each reader;
  • Application software and a host computer system.

Radio waves transfer data between the RFID tag and the reader, which are tuned to the same frequency. In a passive RFID system, the reader sends out a signal, which is received by all tags tuned to that frequency present in the RF field. Tags receive the signal with their antennas, and selected tags respond by transmitting their stored data.

A tag can hold many types of data about the item, such as its serial number, configuration instructions, what time the item traveled through a certain zone, even temperature and other data provided by sensors. The read/write device receives the tag signal with its antenna, decodes it and transfers the data to the host computer system. RFID tags can be attached to virtually anything - a tractor-trailer, a pallet, a case or individual item. If multiple tags are present in the field, more efficient RFID implementations have anti-collision algorithms, which determine the order of response so that each tag is read only once.

All about tags
Various types of tags are needed for use in different environmental conditions. For example, tags that perform well when attached to cardboard cases are not the best choice for wooden pallets, metal containers or glass. Tags may be as small as a grain of rice, as large as a brick, or thin and flexible enough to be embedded within an adhesive label and run through a bar code label printer. Tags also vary greatly by their performance, including read/write ability, memory and power requirements.

Depending upon the application and environment, RFID tags have a range of durability. Paper-thin labels, often referred to as "smart labels," are typically used for disposable or one-time use applications. Special RFID/bar code label printers can produce a wide range of customizable RFID labels and allow companies to implement basic RFID quickly and easily.

Other RFID tags targeted for permanent identification applications can be encased in materials to withstand extremely high heat, moisture, acids and solvents, paint, oil and other conditions that make text, bar code or other optical-based identification technologies unusable in the environment. RFID tags can be reusable and suitable for lifetime identification, which can provide a total cost of ownership (TCO) advantage over bar code labels or other identification methods that are disposable and need periodic replacement.

Tags are either passive, active or battery assisted. Passive tags receive their power to exchange data from the signal sent by the reader. Active tags have a battery to power their own transmissions. Battery-assisted tags have a battery that powers chip electronics but does not transmit RF energy.

Most current and proposed consumer goods logistics and retail RFID applications can be satisfied with passive tags, which are less expensive and smaller than active versions because they do not require a battery. Active tags are the best selection when the most important consideration is to be able to read the tags at the longest possible distance.

Just like compact disks, RFID tags can be read-only or read-write. Read-only tags are programmed with a serial number or other data at the factory and cannot be altered. Data on read/write tags can be revised or erased thousands of times by the user. Read/write tags are often partitioned with a secure, read-only area that may encode a unique ID number, and a writeable portion of memory that users can program and reprogram themselves. One application for this technology is to permanently encode a pallet ID number in read-only memory and to use the read-write blocks to record items that have been loaded onto the pallet. When the pallet is unloaded the writeable section can be erased and made available for new information when the pallet is reused. Companies or departments throughout the supply chain can also take advantage of the writeable portion of tag memory to add data to support their own business operations.

Writeable tags also can be interfaced with sensors to capture and record variable information. For example, a frozen foods producer may apply RFID tags to pallets and interface them with a temperature sensor to monitor temperatures during shipment or storage. The system could be set to sound an alarm if temperatures moved outside of the pre-set acceptable range. Temperature sensors also could be used to automatically provide documentation that materials were kept at required temperatures. Sensor applications often use battery-assisted tags and power for the sensor.

Because direct line of sight between the reader and tags is not necessary, there are many more placement options for RFID readers than were possible with bar code labels. Readers can be portable or can be placed in a fixed position, just like bar code scanners. Fixed-position readers can be mounted to read items traveling through dock doors, conveyor belts, loading bays, gates, doorways and other areas. Readers may also be attached to lift trucks and other material handling equipment to automatically identify pallets and other items that are being moved.

Riding the (air) waves
Because RFID is a radio based technology, there are a number of implementation performance considerations.

  • RFID can be susceptible to interference from other radio transmissions and metal
  • Some materials absorb RF signals more readily than others
  • Sensitivity to interference varies by frequency and the usage environment.

These factors can impact the tag read/write range and speed that is seen. Most scenarios can be handled by using the proper specific tags, readers and applications.

Some vendors offer systems that can be programmed to search for specific tags within a field. This functionality, called "group select," improves processing speed because only the tags of interest are identified and read, other tags in the field can be ignored. Group select is extremely valuable for logistics and retail operations. For example, distribution center workers could use mobile RFID readers to search dozens of cartons from an incoming shipment and locate the specific items needed to cross dock. Retailers receiving mixed-load shipments could locate hot selling products and promptly place them on the shelves before the rest of the shipment was unloaded.

RFID's ability to read and write to tags automatically, every second, could easily produce enough data to overwhelm an information system. Properly analyzing the specific data and timing that is needed for processes and systems is critical. Planning a successful RFID implementation also requires more than extensive knowledge of RFID technology. The enterprise and its technology partners need knowledge and real experience with other data collection technologies, mobile computing, industrial and wireless networking, manufacturing and distribution processes and enterprise software.

An RFID system's read range, the distance a reader antenna must be from the tag in order to read the information stored on its computer chip, varies from a few centimeters to tens of meters, depending on the frequency used, power output, whether a tag is active or passive, and the directional sensitivity of the antenna. The presence of metal and liquids affects range and read/write performance because these materials may cause interference. For read/write tags, the read range is typically greater than the write range.

Frequency is one of the leading factors that affects range. No single frequency is ideal for all applications, even within a single industry. Just as separate bar code symbologies are used at different levels of consumer goods packaging, RFID tags of different frequencies and functionality will be used together within overall supply chain operations. Current logistics and supply chain applications tend to use the UHF band, either between 860 and 930 MHz or 13.56 MHz.

Working together
Many highly effective applications can take advantage of existing data collection systems and processes and enhance them with RFID for operations where more functionality is required. This approach fully leverages existing technology and successful systems, which makes the return on investment for RFID easier to measure and faster to attain. For unit-level identification, bar code systems may provide excellent performance and will continue to be the most cost-effective option. RFID then can complement and expand that system at the carton, case and pallet processing level.

The same benefits retailers and distributors are attaining are available to others that implement RFID-tagged shipments into their own business processes. Manufacturers benefit by applying RFID tags to cases and shipping containers, especially reusable assets like pallets, reusable plastic containers, kegs, totes and gas cylinders. The types of RFID tags that are placed on these items may be reused hundreds of times, which leverages the initial tag cost to provide a very attractive total cost of ownership. Tagging at this level also sets the foundation for numerous highly accurate labor-saving automated routing, receiving, shipping and inventory control applications. These benefits allow manufacturers to reduce fixed assets 1 percent to 5 percent and to cut working capital 2 percent to 8 percent because of better asset utilization, according studies conducted by AMR Research and sponsors of Auto-ID Center, a forerunner of today's EPCglobal Inc.

Getting real The world of RFID is full of hype. Here's what's real: RFID can save time, reduce labor and improve item visibility from production through product delivery. Here's how:

Asset management
RFID tags can be permanently attached to capital equipment and fixed assets - everything from pallets to tools, vehicles, trailers and equipment. Fixed-position readers placed at strategic points within a facility can automatically track the movement and location of tagged assets with incredibly high percentages of accuracy. This information can be used to quickly locate expensive tools or equipment when workers need them, eliminating labor-wasting manual searches. Readers can be set to alert supervisors or sound alarms if there is an attempt to remove tagged items from an authorized area.

By tracking pallets, totes and other containers with RFID and by building a record of what is stored in the container as items are loaded, users can have full visibility into inventory levels and locations. Manufacturers, for example, can easily locate items necessary to fill orders and fulfill rush orders without incurring undue managerial or labor time.

RFID tags or labels on pallets, cylinders, RPCs (reusable plastic containers) and other shipping containers can be automatically read at the dock door as they leave with an outgoing shipment. By matching the reading with specific shipment information in a database, manufacturers can automatically build a record of what specific shipping containers were sent to each customer, information that then can be used to document cycle times, improve returns and recoveries and aid in disputes with customers about lost or damaged assets

Production Tracking
The Auto-ID Center study found that manufacturers can reduce working capital requirements by 2 percent to 8 because of the greater visibility RFID provides into work-in-process tracking and materials inventory. By applying RFID tags to subassemblies in a production process rather than to finished goods, manufacturers can gain accurate, real-time visibility into work-in-process in environments where bar codes are unusable.

Inventory Control
Improved inventory tracking remains RFID's primary benefit, especially when the technology's capabilities are used to collect information and provide visibility in environments in which tracking was not done before. Because RFID tags can be read through packaging without direct line of sight between object and reader, and because they can withstand exposure to dirt, heat, moisture and contaminants that make bar codes unusable, RFID can remove blind spots from inventory and supply chain operations.

By using the highly accurate, real-time and unattended monitoring capability of RFID to track raw materials, work-in-process and finished goods inventory, companies can improve overall inventory levels and reduce labor costs and safety stocks. Readers covering warehouse racks, shelves and other storage locations can automatically record the removal of items and update inventory records. If an item is misplaced or needed urgently to complete an order, fixed-position readers or a worker with a mobile computer and RFID reader can automatically search for the item by reading for its specific ID number.

Besides protecting inventory from theft and diversion, readers can be set to sound alarms or send notification if items are placed in unauthorized areas of the facility or removed from storage without prior approval. An Auto-ID Center study found consumer goods manufacturers would reduce shrink (inventory loss) by an estimated 10 percent by implementing secure storage areas.

Similarly, direct store delivery and other remote sales and service personnel can take advantage of RFID readers integrated with mobile computers to quickly and accurately count inventory held in stores or in a vehicle. The automated counting saves significant time in the field, allowing representatives to visit more customers in a day. For field service applications, permanent asset tags applied to equipment store its ID, configuration and service history information to ensure accurate and appropriate service is performed in the field, where access to a central records database may be unavailable.

Shipping and Receiving
The same tags used to identify work-in-process or finished goods inventory also can trigger automated shipment tracking applications. Items, cases or pallets with RFID tags can be read as they are assembled into a complete customer order or shipment. Individual readings can be used to automatically produce a shipment manifest, which then can be printed in a document, recorded automatically in the shipping system, encoded in an RFID tag, printed in a 2D bar code on the shipping label, or any combination. For example the Serial Shipping Container Code (SSCC) data structure commonly used in bar codes on shipping labels could be encoded into RFID to facilitate automated handling. The new RFID application could be very effectively integrated into existing business processes, because it takes advantage of data structures that are already supported in enterprise databases and software applications.

Manifest information encoded in an RFID tag could be read by the receiving organization to simplify the receiving process and to satisfy requirements like those for advance shipping notices so there would be no processing delays if the physical shipment arrived before the electronic data interchange transmission with the ASN information.

Having complete shipment data available in an RFID tag that can be read instantly without manual intervention is particularly valuable for cross dock and high-volume distribution environments. Incoming shipments can be automatically queried for specific containers. If a sought-after item is present, it can be quickly located and selected.

Regulatory Compliance
Companies that transport or process hazardous materials, food, pharmaceuticals and other regulated materials can record the time they receive and transfer the material on an RFID tag that travels with the material. Updating the tag with real-time handling data creates a chain-of-custody record that can be used to satisfy FDA, DOT, OSHA and other regulatory reporting requirements.

Service and Warranty Authorizations
Authenticating the product and customer with proprietary information also can be used to authorize warranty and service work. Upon completion of repairs or service, a record of the activity performed can be encoded on the tag to provide a complete maintenance history that travels with the item. If future repairs or service are required, a technician can access the item's complete maintenance and configuration information without accessing a database simply by reading the tag. This application makes sure workers have the necessary information even if no database access is available and eliminates the need and expense of making phone calls or wireless data inquiries to access records.

In the end
Just like other emerging technologies, RFID technology will continue to evolve. Market adoption will grow as companies become familiar with this new way of sharing information and experience the bottom-line benefits and increase in efficiency it can provide. Still, as with any new business process, there are ways to make sure your company's experience with RFID is a successful one.

  • Select an implementation partner with experience in RFID and automated data collection. The goal is to create an integrated data collection system that makes the most of your present business processes and moves you seamlessly to the additional capabilities of RFID where it makes sense.
  • There's a lot of misinformation out there. Check and double-check your information with ADC experts before making any critical business decisions.
  • Once you have secured reliable information, there is no reason to wait to take advantage of RFID technology and its benefits. The technology is mature in many applications, highly functional and supported by current and emerging standards. Companies in all segments of the supply chain are proving the business value of RFID every day. With the help of an experienced partner to help plan business process changes, select the best tag designs, frequencies and equipment options, and implement and support the system, your company can wisely use the capabilities of RFID to improve the accuracy, speed and responsiveness of your entire business operation.

Scott Medford is vice president of global business development for Intermec Technologies Corp.