Radio Frequency Identification (RFID)


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Radio Frequency Identification (RFID)

  1. 1. Radio Frequency Identification (RFID) As a Fixed Asset Management Solution December 1, 2004 Prepared by: Eric Priehs, Project Manager And Stephen Talbot, Director of Marketing Contact Information: Asset Management Resources 20750 Civic Center Drive Suite 400 Southfield, MI 48076 (877) 401-4639 This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems.
  2. 2. Radio Frequency Identification (RFID) As a Fixed Asset Management Solution Introduction RFID is a re-emerging technology in 2004 with major companies investing heavily to achieve its promise and still more companies willing to supply the hardware, software and technical expertise to make it happen. The promise of RFID is total visibility in real time of individual parts through production to purchase or even disposal. This visibility promises to lower manufacturer’s losses due to theft or counterfeiting, increase the on-shelf availability of products, allow tainted foods to be tracked back to their point of origin and provide consumers with item identification for recall or warranty purposes. Fixed Asset visibility could also provide an up-to-date, real-time inventory of personal property assets at any moment. This visibility also raises privacy issues as each individual item can have a unique serial number that allows item tracking over time. If this unique number is attached to personally identifiable information, then people can be tracked via their RFID-tagged items. Many privacy concerns can be addressed through current security technology and privacy policies. The number of hits provided by any internet search engine and the number of articles appearing in trade journals prove the interest in this technology. The claims made for and against RFID are subject to hyperbole as the information about it increases exponentially. As it relates to Fixed Assets and RFID usage, it is important to set realistic expectations. With today’s current technology advances, it is still unreasonable to ride down the aisles of a factory with a RFID reader on a cart and within a few minutes verify all the assets. This is not to say the future technology will never advance to this level of capability but today this remains an unrealistic cost effective promise. This paper will examine the current specifications, the issues one must overcome, and will provide a general educational overview. This document attempts to provide a realistic basis for discussion. Executive Summary Radio Frequency Identification (RFID) is an emerging technology with many successful applications including animal tagging, security access, retail loss prevention, automated toll collection and warehouse management. Wider adoption of RFID in the United States is being spearheaded by the U.S. Department of Defense (DOD) and retailers such as Wal-Mart, Target, and Albertsons. Often touted as a “disruptive” technology This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 1 - 22
  3. 3. destined to change retailing, RFID currently complements the barcode systems it may someday replace. RFID does not require specific orientation or line-of-sight to gather data thereby minimizing human error potential while offering greater automation opportunities, higher read rates, greater read accuracy and longer read ranges. Retail adopters plan to lower supply chain costs, reduce theft and counterfeiting, and improve product restock rates. Impeding RFID implementation and wider acceptance are technical and social issues including competing standards and proprietary systems, regional frequency regulation differences, high costs and misconceptions. The business case for RFID implementation is self evident in supply chain management (SCM) and enterprise resource planning (ERP). In other application areas the return on investment needs further investigation. Most analysts predict the widespread adoption of RFID when the price of passive read-only tags reaches the 5-cent mark; opinions differ on when this price point will be reached with one recent analysis maintaining that tags will only reach 16 cents each by 2008.1 Current RFID costs are considerable. RFID pricing is significantly greater than barcode pricing and individual RFID tags can range from 20¢ to $100, depending on quantity, memory, function and expected life. Handheld RFID readers are comparable in cost to handheld barcode scanners; handheld read/writers and handheld combined RFID/barcode units cost more, but provide multifunctional capabilities. Fixed readers and antennas start around $300 each. Each frequency has dedicated hardware and multiple, often proprietary, standards from various providers. Specialized software starts at $325 while major applications are starting to include RFID capabilities. Integrating RFID tools into existing systems and upgrading systems to accept RFID data further increase the cost of adopting the technology. Use of RFID in fixed asset management solutions at this point and in the near future is likely to be minimal, at best. Clients may use RFID in the warehouse or during the manufacturing process where the applications are proven but the costs for fixed asset tracking may prove prohibitive for the near future. In our estimation, active RFID tags with adequate memory storage could meet the requirements for fixed asset tracking, but at this time the cost would seem prohibitive. Passive RFID tags overcome the cost objection but technologically fall short of operational effectiveness. A possible solution would combine the use of active and passive tags. Active tags could be used on a parent asset to contain information regarding its trailing assets or store preventative maintenance data directly on the asset. Low-end, barcoded, passive tags similar to the current Mylar tags could be placed on subcomponent (child) fixed assets to validate all the related children to the parent. In a more limited scope passive RFID tags might be used in less hostile environments such as offices and labs. These applications could serve the dual purpose of asset tracking and RFID-enabled security systems. Other applications can no doubt be imagined. This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 2 - 22
  4. 4. RFID Technology Overview RFID employs radio frequency communications to exchange data between a memory device and a host PC or PLC. Three primary components comprise a typical RFID system: an antenna, a transceiver or interrogator (reader or read/writer) and a transponder (RFID tag). Often, the antenna is part of both the reader and the tag. All three components are dedicated to specific bandwidths though some multi-frequency hardware is available. Radio signals emitted from a read/writer through an antenna activate any RFID tags within range. The tags absorb a portion of the signal to either power responses or activate internal batteries to power responses. Responses are often returned at a different frequency. Data is returned to the read/writer from read-only tags and data can be written to read/write tags. The returned data is either transmitted to a computer for processing or stored in the read/writer for later transmittal. These radio signals are subject to environmental interference, absorption and diffusion according to the laws of physics. Antennas Antennas in an RFID system can be fixed in a physical location, incorporated into a read/writer or into the tags and most likely all three instances will apply. Stand alone antennas can be positioned around access points to track movement, integrated into a process or directly attached to a read/writer to extend its range. All read/writers contain an antenna and all RFID tags incorporate some antenna structure. Current antennas are usually copper, formed to fit the read/writer or tag. Conductive carbon-based inks are available that allow a printed barcode, logo or text to become the antenna.2 This can reduce tag size and offer a more flexible label; however, this technology is not widely used. Read/writers Readers collect data; read/writers collect and write data to tags (read/writer will be used as the generic term throughout). Read/writers are regulated on power output per frequency resulting in discrepancies in the range between European and the American hardware. Basically, the greater the power output the greater the range. Europe generally has tighter power output regulation and lower ranges. There are two kinds of read/writers: fixed or handheld. Fixed read/writers vary in size and can be strategically placed and integrated into existing LANs and wireless networks or incorporated into other machinery. Handheld read/writers are available as dedicated RFID units. Combination RFID/barcode scanner units or PDA add-ons are also available. This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 3 - 22
  5. 5. Tags RFID tags are also known as smart tags or smart labels due to their data storage capacity. They contain a processor chip attached to an antenna inside a form factor. The form factor may take different shapes and sizes. In general, the physical tags can range from a simple label to a plastic enclosure several inches long and an inch in depth. The most basic RFID tags function as the radio frequency enabled equivalent of a barcode tag, a “license plate” that links to a database. The most advanced tags can contain all or some of the information included in a database. RFID tags are classed by their power source and by their data capabilities. Smart tags come in a variety of shapes and sizes from a grain of rice to a quarter to a credit card and are often encased in plastic. Some tags include spacers for mounting on metal. Barcodes can be incorporated if the form factor allows. The size of smart labels is comparable to currently used shipping labels; it varies by application and often allows barcode and/or other text printing on the surface (the RFID circuit and antenna are on an inlay between the surface and the substrate layers of the label). Tags also vary in memory capacity, read/write ability, range, useful life and active or passive nature. Active tags contain a battery to power the return signal and generally have read/write capability. Some allow the battery to be replaced to extend the life of the tag. Active tags are more expensive than passive tags, have a greater read range but have only a lifespan of three to ten years, depending on battery longevity. Passive tags obtain power from a read/writer and are lightweight, battery free and available as read/write or read only capable. The read range is short but their lifespan is conservatively estimated at 20 years. Semi-passive tags are also available; these tags have a battery to power a sensor or additional memory. An example might help. A road construction firm that uses concrete could embed a semi-passive tag with an attached sensor at the time the concrete is poured. The sensor captures the moisture level at the core of the newly poured cement alerting the engineer when the concrete has cured sufficiently to enable traffic to safely use the new pavement. The battery does not power the return signal so the read range and lifespan are that of a passive tag. Read/write tags store data that can be modified by users. Some allow users to permanently lock portions of the memory while retaining the read/write capability in the remainder. Memory capacity varies from 48 bit (six alphanumeric characters) to 1 MB. Read only tags contain unalterable factory-coded data and offer excellent security as the tag data cannot be modified. The memory capacity is generally limited to 128 bits (sixteen alphanumeric characters) of information. This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 4 - 22
  6. 6. Write Once Read Many (WORM) tags can be factory coded or field coded. These tags can be encoded from a compatible printer or a handheld read/writer. Memory is limited to 96 bits (twelve alphanumeric characters), though a 256 bit (thirty-two alphanumeric character) tag is under development.3 Printers RFID-enabled thermal transfer printers can encode and verify a smart label while printing human readable text and a barcode. Printing takes place on the area of the tag where the chip is not inlayed. Unreadable or unwritable smart labels get some human readable indication that the tag is not useful whether “void” or a line through the barcode. The encoded data is limited by the size of the tag memory. Software Software is critical in RFID applications. Read/writer software prevents data collisions, decodes tag responses, eliminates or flags duplicate readings and stores the data for transfer. Printer software verifies encoded smart label data and voids barcodes if the RFID inlay is damaged. Middleware manages the data transfer to an ERP, Warehouse Management System (WMS) or database applications. Major software vendors including IBM, Microsoft, Oracle, PeopleSoft and SAP have started including RFID functionality in their ERP, Customer Relationship Management and WMS products.4 Specialty applications for asset management, access control, vehicle management and warehouse management are available from a multitude of vendors. Frequencies RFID systems utilize a variety of radio frequencies from 30 KHz to 5.8 GHz. Radio frequencies are governed by regulatory agencies and most require licenses for use. In general, the lower the frequency the shorter the read range, the slower the read/write rate and the lower the cost. However, application and region determine which frequency to use in any RFID system (Table 1). Low frequency (30 kHz to 300 kHz) RFID is typically 125 KHz or 134 KHz. Although inexpensive, the main disadvantages of low-frequency tags are that they have a read range of 3-15 feet with a slow data transfer rate. Use in industrial environments is further limited due to interference from electric motors. It should be noted that these electrical interferences can be crippling for RFID usage and may reduce a read range to within a few inches. High frequency (3 MHz to 30 MHz) tags typically can be read from short distances (3 feet or less) and transmit data faster than low frequency tags but consume more power than low frequency tags. They have greatly increased data storage capacity and often adhere to the specific ISO standards for high security applications. Increased data storage capacity can lead to "mobile database" applications where data records are stored on RFID tag instead of or in addition to a networked database. High frequency This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 5 - 22
  7. 7. tags are not subject to much interference from electrical noise in industrial environments. The most widely used high frequency is 13.56 MHz. Ultra high frequency (866 MHz to 960 MHz) tags send information faster and farther than high and low frequency tags but still experience difficulties with liquid and metal refractions. UHF tags are also more expensive than low-frequency tags and use more power. North America uses 900–928 MHz systems, Europe 868.2–868.8 MHz and Japan has proposed to use 950–956 MHz. Microwave (2.4 GHz to 2.5 GHz, 5.8 GHz) RFID features very high transfer rates and read ranges up to 30 feet, but uses a lot of power and is very expensive. Systems operating at 2.4 GHz systems may interfere with 802.11 wireless LANs and Bluetooth products as these products also utilize this band. Table 1. Utilized Radio Frequencies Frequency range Applications Comments Less than 135kHz A wide range of products available to Transponder systems operating in this suit a range of applications, including band do not need to be licensed in many animal tagging, access control and countries. They are less subject to track and traceability. interference than UHF tags. 1.95 MHz, 3.25MHz, Retail electronic article surveillance 4.75MHz, 8.2MHz (EAS) systems Approx. 13 MHz, EAS systems and ISM (Industrial, 13.56MHz Scientific and Medical) Approx. 27 MHz ISM applications in Australia 430–460 MHz ISM applications specifically in Europe USA and China support using 434 MHz for & Africa Real-time Locating Systems 856 MHz Norwegian toll road systems 868.2–868.8 MHz ISM applications in Europe 902–916 MHz ISM applications specifically in North In the USA this band is well organized with and South America. many different types of applications with different levels of priorities, including Railcar and Toll road applications. The band has been divided into narrow band sources and wide band (spread spectrum type) sources. In Europe and Africa the same frequencies are used by the GSM telephone network. 918–926 MHz RFID in Australia for 1 watt or less transmitters 956 MHz Proposed for ISM applications in Japan 2350–2450 MHz A recognized ISM band in most parts of IEEE 802.11 recognizes this band as the world. acceptable for RF communications; both spread spectrum and narrow band systems are in use. 5400–6800 MHz This band is allocated for future use. In the USA the FCC has been requested to provide a spectrum allocation of 75 MHz in the 5.85–5.925 GHz band for Intelligent Transportation Services (ITS) This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 6 - 22
  8. 8. Frequency range Applications Comments use. In France the ITS system is based on the proposed European pre-standard (preENV) for vehicle-to-roadside communications via microwave beacons operating at 5.8 GHz. Japan proposes using this for dedicated short-range communication applications. 24.125 GHz ISM applications including automatic No licensing required in most of the world. door openers and police radar systems. 802.11 wireless LANs and Bluetooth devices utilize this bandwidth also. Dataflo Consulting, et. al. Technical Problems Technical problems such as radio frequency interference, scattering and absorption will be reduced (if not solved) by technological improvements as the industry matures. Tag reliability will increase as manufacturing process improves. Issues such as data collisions and data overload can be handled through improved software and hardware. RFID Standards As an emerging technology, RFID standards are still developing and competing; at least sixty have been proposed. The American National Standards Institute (ANSI), the International Standard Organization (ISO) and EPCglobal are working to establish globally accepted standards. Installed proprietary systems are sometimes compatible with established standards but it seems that many early developers are hoping to set a de facto standard through widespread use of their products. EPC The major standard for retail applications is the electronic product code (EPC), basically an upgraded UPC (Universal Product Code). The EPC is a number composed of a header and three data sets. The header identifies the EPC version number, allowing for different lengths or types in the future. The second part identifies the EPC Manager, most likely the manufacturer of the product the EPC is attached to. The third section is called object class and refers to the exact type of product, most likely using the Stock Keeping Unit. The fourth data set is the serial number, unique to the item. The 96-bit EPC provides unique identifiers for 268 million companies. Each manufacturer can have 16 million object classes and 68 billion serial numbers in each class, more than enough unique identifiers. See Table 2. This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 7 - 22
  9. 9. Table 2. EPC Classes Class Definition EPC Class 0 Read-Only; Factory Programmable (900 MHz) EPC Class 0 plus Read Write EPC Class 1 Write Once, Read Many (WORM) (13.56, 860-930 MHz) EPC Class 1 V 2 (Gen 2) Factory Programmable plus Read Write (expected October 2004) EPC Class 2 Fully Re-Writable (under development) EPC Class 3 Active Tag (Fully Re-Writable) (under development) EPC Class 4 Relay Tag – Can Communicate with Other Tags (under development) Though EPC-compliant technology is available at 13.56 MHz and 915 MHz, Wal-Mart and the DOD have indicated a preference for the 915 MHz UHF Gen 2 published specification. ISO ISO RFID standards have been approved for animal tracking, ID cards, supply chain applications and freight containers. Many vendors have adopted them and standards are under development. Proprietary Proprietary standards have evolved as manufacturers have met the growing demand for RFID products. These may or may not be compliant with ISO or EPC-global standards. Notable proprietary systems include Philips Hi-Tag, I-code and Mifare; Texas Instruments TIRIS; and Sony FeliCa. Other Standards Other specialized standards exist such as those issued by the Automotive Industry Action Group (AIAG), the European Conference of Postal and Telecommunications Administrations (CEPT), the European Telecommunications Standards Institute (ETSI), the Universal Postal Union (UPU) and the European Committee for Standardization (CEN). These standards exist beyond the scope of this paper. However, it should be noted that the diversity of standards has complicated the decision process given a system’s expected life. RFID Initiatives Companies are driving the adoption of RFID technology to reduce costs by requiring suppliers to smart tag their pallets and cartons. Many of the best known initiatives (with a few barcode initiatives) are included in Table 3. Widespread item-level smart tagging most likely will not occur during the next five to ten years until the tag price drops and the technology improves; however, producers of high-end or widely counterfeited items such as pharmaceuticals or Rolex watches may tag individual items to ensure authenticity. This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 8 - 22
  10. 10. Table 3. Initiatives Industry Company/Reference Use Timeframe Airline Delta RFID tracking of airplane parts. December 2004 Airline Delta Smart baggage labels. Complete by 2007 Government DOD MIL-STD-130L Unique Identification labels on cases, pallets Current and all items over $5,000. Government DOD RFID Mandate EPC Class 1 tags on all cases, pallets and January 2005 4 items item classes to 2 depots; January 2006 10 item classes to all locations; January 2007 entire supply chain Government FDA: Combating Counterfeit Mass serialization of all pallets and cases of December 2007 Drugs pharmaceuticals; Mass serialization of most packages of pharmaceuticals (standard to be determined) Government FDA: Patient Safety Initiative Barcoding on unit dose pharmaceuticals. Starts 2005 Government FDA: Food Barcoding Mandate License plate barcode on all cases and pallets Date pending of food products for One Step Back tracking. Food Sysco RDC Mandate License plate barcodes on pallets and cases. August 2004 Manufacturing Airbus S.A.S. Passive 13.56 MHz and UHF RFID tracking of Begun August airplane parts. 2004 Manufacturing Boeing Co. Passive 13.56 MHz and UHF RFID tracking of By December airplane parts. 2005 Manufacturing GE power-plant systems Active RFID “license plate” on all shipments. Voluntary for all suppliers, began 2002 Manufacturing Michelin North America Inc. UHF tags on tires to track performance and January 2003 wear over a period of time. Retail Albertsons EPC Class 1 tags on all pallets and cases. April 2005 for top 100 Retail Best Buy EPC compliant tags on product cases and January 2006 for pallets. major suppliers, May 2007 for all suppliers Retail Marks & Spencer (U.K.) 868 MHz smart labels on clothing items. Trial October- November 2003; full roll out 2005 Retail Metro Group AG EPC Class 1 tags on all pallets and cases. November 2004 for top 100 suppliers Retail Target EPC Class 1 tags on all pallets and cases. Spring 2007 Retail Tesco Corp. (U.K.) EPC Class 1 tags on product cases. April 2004 This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 9 - 22
  11. 11. Industry Company/Reference Use Timeframe nonfood cases, September 2004 cases from major suppliers, 2007 for all cases Retail Wal-Mart RFID Mandate EPC Class 1 tags on all pallets and cases. January 2005 for top 100 suppliers, 2006 for all suppliers. Shipping UPS EPC compliant tags for customers using Pilots 2004, UPS’s supply chain management service; adoption 2005 truck and reusable container tracking,,,,, RFID USES Current Uses RFID is currently used in many familiar applications such as the ExxonMobil SpeedPass point of sale program, the plastic tag on clothing that’s removed upon purchase and the key fob used to gain access to office buildings before or after normal business hours. Innovative uses of RFID will continue to develop as the technology improves; some of the most well-known applications follow. Retailer integration of RFID into the warehouse management and supply chain management processes reduces the time and cost associated with inventory tracking, provides real-time data and can improve retailer-supplier communication. This is where the DOD,5 Wal-Mart6 and other retailers7 anticipate efficiency gains and cost reductions. This is also the area that has received the most attention. For example, the European retailer Metro Group AG completed their pilot RFID project called the Future Store Initiative8 and believes that process efficiency rose by 12 to 17 per cent with RFID, losses and theft were down 11 to 18 per cent and merchandise availability increased 9 to 14 per cent. The problems with blind spots on the RFID- enabled shelves and with metal and liquid products have not deterred the retailer from implementing a full rollout to 269 stores and 8 distribution centers by December 2005.9 The use of RFID read/write tags as an electronic manifest in closed-loop manufacturing processes are used to increase automation and decrease costs. Ford Motor Company’s Essex Engine Plant in Windsor, Ontario, uses such a system to ensure traceability and quality. 10 Other manufacturers use or are investigating similar uses. This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 10 - 22
  12. 12. Other manufacturers such as Boeing11 and Airbus12 are piloting programs to track parts used in the construction of airplanes. Others such as Michelin use RFID to track tire performance and wear.13 Cashless payment systems such as automated toll collection systems and point of sale systems such as ExxonMobil Speedpass allow consumers to quickly purchase products or pay tolls without stopping.14 A fixed reader reads the smart tag or fob data and the transaction is conducted using data stored in a secure database. McDonalds is testing such a system.15 Electronic article surveillance (EAS) retail loss prevention is widely used and is perhaps the most familiar application. High-end retail items often sport reusable RFID tags that are removed when purchased and electronic products often have smart labels on the box. Textile rental companies16 and drycleaners17 are starting to use barcoded RFID tags to track rental clothing or linens through the cleaning and rental processes to reduce errors and properly bill clients. Animal tracking is one expanding RFID application. It has become more important in wake of the December 2003 mad cow disease incident in Washington State.18 Major beef producing countries including the United States, Canada, Brazil and Australia are instituting RFID livestock tracking programs.19 RFID tags allow instant identification and speed the track-back time of diseased animals to minimize health concerns and quickly isolate other possibly diseased animals. Delta Airlines recently started using RFID tags to track baggage and anticipates saving $100 million annually in time and labor tracking lost luggage.20 The company has also started a pilot to smart tag engine parts to better manage its $1 billion parts inventory.21 Asset tracking with RFID tags is becoming more widespread in libraries. The Vatican Library, among other libraries, recently started applying RFID tags to its 120,000 volume public collection and anticipates speeding inventory-taking from 30 days to one-half day.22 Other gains include speeded checkout, automated sorting and improved security.23 Pallet tracking in a closed loop system using read/write tags is practical with a compelling return-on-investment according to one source.24 On pallets repeatedly used the per tag cost is significantly reduced to barcode price levels. The most notable healthcare uses include RFID wristbands on newborns25 to prevent misidentification and abduction; RFID tags to track medication, supplies, equipment and lab samples; and RFID wristbands to track patients with dementia and help prevent medication errors. This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 11 - 22
  13. 13. Access control applications such as automotive remote entry are commonplace. Security access control using RFID badges or fobs and fixed readers located at access points restrict admittance or can log when a smart ID card or a tagged asset passes the installed readers at access points. RFID access control in theme parks26 and ski areas is becoming more widespread in the U.S. In Europe, up to 30 per cent of skiers do not wear the correct tag, and it takes a long time for staff to check all skiers to make sure they have paid their skiing fees. Further, RFID tags can control access by scanning skiers' tags automatically when they pass a reader to ensure they are proficient enough skiers for the slope selected.27 Future Uses Uses for RFID technology will expand as far as the technology, regulation and social conditions allow. Global standards are emerging and should speed RFID adoption and innovation if regulatory agencies carefully balance the benefits of the technology versus its pitfalls. Social acceptance of RFID will come as people become familiar with the technology, much as everyone has accepted the barcode, and privacy concerns are addressed through policy or regulation. Many of the future uses below are in the pilot stage. Microsoft is planning for the day when “pervasive RFID”28 enables an “internet of things” that allows smart appliances to communicate with their contents and alert one that the milk has expired. Credit card companies are investigating contactless cards using RFID as a means to speed transactions.29 These cards would not have to be swiped to make a purchase, rather touched or placed very close to a reader. There is the possibility that governments could use RFID in currency to foil counterfeiting. Unsubstantiated reports indicate that the European Union is working to embed RFID chips in all Euro bills by 2005 and that the U.S. government is embedding RFID in the redesigned $20 bill.30 These reports currently appear to be hoaxes, though not completely outrageous. One analyst maintains that RFID offers the technology to locate and generate the asset tracking data that current and forthcoming U.S. government regulations require.31 Sarbanes-Oxley, the Patriot Act and Homeland Security legislation necessitate the improved reporting RFID can provide through real-time location and identity information. FDA mandates necessitating the authentication and tracking of pharmaceuticals is a tremendous opportunity for the RFID industry and may prove crucial to lowering the per tag price. An August 2004 analyst report notes the potential return on RFID investment for pharmaceutical companies is significant through improved inventory management and product-recall capability, enhanced patient safety, and as a guard against drug counterfeiting.32 This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 12 - 22
  14. 14. Healthcare applications are becoming more widespread. Hospitals are investigating RFID applications including: RFID wristbands to keep track of patients with dementia, RFID tags to track equipment and personnel in real time,33 and RFID-enabled pharmaceutical cabinets to track access and automate drug ordering. Tracking humans in controlled settings via RFID will become more widespread. Companies with RFID-enabled security systems will be able to record the movements of employees and visitors using smart ID badges. More theme parks will adopt RFID wristbands as a means to locate and reunite separated patrons; state penal systems will follow the state of Ohio in investigating the use of RFID wristbands to track prisoners at state correctional facilities.34 Widespread tracking of people via RFID implant will not be technologically practical for ten years and may never become socially acceptable. A recent UPI report covers several RFID applications to thwart terrorism.35 One would alert officials when the RFID-enabled seals placed on intermodal containers have been tampered with or broken; another would store data to allow quick weight verification to check for additions. RFID labels will be used to authenticate items as well as track them through a supply chain. Authentication becomes critical when dealing with drugs; producers of high-end products will use RFID labels to fight counterfeit goods. RFID Issues Technical issues such as signal interference, competing standards and regulatory differences most likely will be solved as RFID technology improves and the industry matures. The social issues will be harder to overcome. RFID’s reduced effectiveness on metal containers and packaged liquids will be minimized through improvements in RFID and packaging technologies, experimentation in tag and read/writer placement, and engineering solutions. One definite sore spot with RFID tags is that the failure rate is much greater than that of barcodes. One vendor indicated that a tag product initially had an 80% failure rate that has since been reduced to less than 10%. A primary source of tag failure occurs when the connection between the chip and the antenna becomes broken or disrupted. Improved manufacturing methods should resolve this issue as the technology matures. Any tag availability issues will cease as production increases. The actual read range of passive smart tags is less than the manufacturer’s stated range by anywhere from forty to seventy-five percent, according to discussions with vendors. Also, the write range for read/write equipment is only thirty to seventy percent of the read range. Manufacturers attempt to test under real-world conditions but the dynamics of actual use are often beyond their capability. This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 13 - 22
  15. 15. One primary concern with RFID tracking systems is the amount of data generated. Business users need to be prepared for the volume and determine the best way to use it. This data explosion must be considered during the planning phase. CASPIAN (Consumers Against Supermarket Privacy Invasion and Numbering) raises issues with the concept, philosophy and implementation of RFID. Further information can be found at their website and their anti-RFID website, The most commonly cited concerns regarding RFID are the possible sale of consumer data to third parties, tracking of consumers via their product purchases, criminals using inexpensive readers to scan shopping bags and purses for robberies or blackmail, and possible health and environmental issues around RFID.36 Item-level RFID tagging raises privacy concerns and has instigated legislation in at least four states.37 Many RFID manufacturers are responding by including “kill’ commands to turn the tags off at the point of sale.38 Most privacy issues are currently nullified by the short read ranges of the passive RFID tags employed in EAS or access control applications and the relative expense of readers. These concerns will become more valid as the technology improves and the prices drop. Tag deactivation via “kill” commands at the point of purchase should also satisfy most privacy concerns. Privacy concerns are not at issue in typical fixed asset management applications. The current concern about tracking “chipped” individuals is misplaced at this time, resulting from the confusion of Global Positioning System (GPS) technology and RFID. The implanted chips currently have a read range of inches, making long-range tracking impractical if not impossible. However, Applied Digital Solutions is reportedly developing an RFID tag with GPS capability39 so the social and ethical concerns will need to be addressed. Another recently raised issue is the possibility of tag “spoofing” or altering data on a read/write tag in a retail setting to reduce the cost of an item when scanned at the checkout.40 This is unlikely to be common while the read/writer cost remains high. Also, it seems unlikely that read/write tags would be used in retail at the item level where read-only tags would be most cost effective. Recent legal issues concerning patent infringement threatens the adoption of the EPC Generation 2 standard.41 Royalties would likely add to the cost of hardware and tags, delaying the price points necessary for widespread adoption. China has a governmental agency to develop RFID standards and there is concern that it may develop standards independent from ISO and EPCglobal.42 This particular concern is relevant since China is a large consumer goods producer and historically has not paid royalties. This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 14 - 22
  16. 16. Prior to involvement with any RFID deployment, many factors have to be considered, including the purpose, prior applications, software, data specifications and use, and technical specifications. The application heavily impacts, if not outright determines, the system frequency used, whether the tags are active or passive, the tag form factor and memory requirements. Asset Management & RFID As the business case for RFID utilization in the personal property arena develops, asset management will likely adopt this methodology to implement asset tracking applications with RFID technology. At first blush, incorporating RFID technology in asset management initiatives would be no more difficult than adopting other barcode technologies such as infodots or 2D barcodes. Data is data no matter how it’s collected. However, a realistic concern amidst the issue of multiple frequencies and immature standards would be the investment in the supporting equipment and software to launch an asset management solution. RFID technology would require adjustments to current asset management processes and procedures. Decisions would need to be based on a well defined set of goals and objectives. The specific solution formulated would need take into account the type of tags to be used, the frequency most suitable, the investment in read/writers, the environmental factors, the data collection method, the business process definition, and the integration of information with other enterprise systems. This can be a daunting task and will likely require the use of expert consultants and/or well trained personnel. All these factors and numerous others will need to be taken into consideration when the ROI analysis and business case is evaluated. There are however many advantages that can be achieved. One such area is Sarbanes-Oxley compliance. Fixed assets are often one of the most neglected areas of compliance. Records are commonly incomplete and most companies have a very incomplete picture of what assets they do own. Wall-to-wall inventories when compared to the fixed asset ledgers invariably differ. Thirty percent of assets on the books no longer exist, partial retirement of complex assets never get recorded, and optimal asset utilization cannot be achieved without good data on which to base one’s decisions. Personal property tax is another area for ROI justification; assets on the books that no longer exist lead to the over payments of personal property taxes. Validation and verification of fixed assets over time without an identification system remains a labor intensive proposition. This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 15 - 22
  17. 17. Life cycle asset management and asset maintenance management systems are only as good as the data available. The tracking and identification of fixed assets to support these applications are essential to achieving the anticipated ROI. The deployment of RFID in asset management today will require a careful balance of the expected returns and technological challenges. These challenges are not insurmountable. Care in understanding the limitations and today’s costs will certainly form a proper and realistic expectation. Finally, enterprise competitive advantage that RFID may provide needs to be considered in the final analysis. RFID Products & Pricing Cost currently is the single most prohibitive factor impeding widespread adoption of RFID. One analyst estimates that large retail RFID implementations cost $400,000 per distribution center, $100,000 per store and $35 to $40 million to integrate an entire organization.43 System integration leads the implementation costs followed by the software and hardware. Most of the hardware costs, aside from tags or upgrades, are one time. The cacophony of vendors providing RFID products and services with a variety of price points prevents listing them here. Vendor lists can be found at RFID Journal, Frontline Solutions, RFID Solutions Online and RFID Exchange. Given the current state of the industry, hardware pricing varies, though it does appear to be moving downwards as the demand increases. In general, passive tag systems cost less than active tag systems. Any price examples are provided to give the reader a sense for the diversity and scope of vendors now in the marketplace and none are an endorsement of any particular company. Consulting is provided by a large number of firms and many more are developing a practice around RFID solutions. This is also true for system integrators that build upon the incorporation of RFID systems with enterprise level applications. Lastly, retailers offer products over the internet as do some manufacturers, while still others offer products complimentary to the base technology such as specialized antennas, reader/writers, and portals. RFID kits are available from many vendors ranging from $300 to $10,000. The kits are specific to a frequency and contain at least a reader or read/writer, tags, technical specifications, software and cables. Others offer RFID in a Package for specific compliance requirements. In the case of Wal-Mart suppliers, a package containing two servers, five RFID readers, a large number RFID tags and five EPC-enabled printers to print the RFID tags can be obtained to facilitate Wal-Mart compliance. Stock RFID antennas are available from $80 to $7,000 depending on system and frequency. Custom or oversized antennas are also available. This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 16 - 22
  18. 18. Fixed and handheld read/writers are available from both domestic and foreign manufacturers. Fixed read/writers are available as modules for integration into machinery or products range from $64 to $2550. Handheld readers are generally less expensive than read/writers and run anywhere from $300 to $1800. Handheld read/writers range from $300 to $2000 each. Handheld read/writer barcode scanner units range from $1660 to $3400 each. Handheld RFID add-ons to PDAs run from $400 to $500. RFID add-ons to other handheld units start at $400. The PDAs run from $200 to $500. RFID tags can be acquired from many integrators, vendors and manufacturers. Per tag price depends on frequency, memory, and read only or read/write capability. Active tags start from $6. Passive tags can be had from twenty cents each in large volumes to $70 for individual tags. Given the current interest in RFID, availability could become an issue. One supplier representative indicated that passive read/write tags could take one week to six months to acquire, depending on the client’s needs and tag availability. He quoted a sixty to eighty cent per tag price. Printer/encoders retail for about $4500 while printable smart labels can be acquired from vendors for approximately $1 to $2 each, possibly less. Middleware software is available from a multitude of suppliers and prices vary. Licenses from one company are $3200 for the first license with each additional license available for $1000 each. Specialized software is as varied as the functions it performs. Specific costs will vary based upon the company and the availability of personnel. Conclusions RFID technology will continue to mature with a fair number of early adopters. However, adoption will probably not proliferate until global standards emerge and become widely accepted. Costs will need to continue to fall to levels comparable to current technology formats used today, i.e., barcodes. In the case of privacy concerns, asset management and asset tagging is not likely to become a significant issue; although access control and identification with RFID will continue to raise a few eyebrows. Supply chain management, livestock tracking and pharmaceuticals will be the driving forces behind RFID adoption for the near future. Given federal mandates and the prevalence of counterfeiting, drug makers have sufficient incentive to adopt the technology.44 More retailers will adopt the technology after the component prices have dropped and the leading adopters have ironed out the supply chain integration snafus. This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 17 - 22
  19. 19. Hospitals are a logical candidate for RFID tagging of personal property assets. Many are upgrading to wireless systems, replacing pagers with PDAs and instituting barcode prescription tracking. Wi-Fi compatible RFID systems for asset, patient and prescription tracking should become more widespread. Affixing asset smart tags or labels in an office, lab or controlled-access environments would be an obvious application. These tags could serve both as asset tags and as security tags if/when an RFID-enabled security system is deployed. In the manufacturing environment, an RFID specialist would probably need to be involved to determine the environmental challenges, frequency interference levels, factory or office layout, business process, appropriate data collection methods and locations. Undoubtedly, this list just begins to touch the surface of all the factors to be evaluated and considered. RFID will continue to emerge and companies will need to remain in touch with the many developments. In the case of Asset Management, expect to see real-time integration across the enterprise in the future. About Asset Management Resources Asset Management Resources (AMR) has become an industry leader in the project management, planning, and proper execution of Fixed Asset Inventory and Reconciliation Services. Since 1990, AMR has inventoried millions of fixed assets with a corresponding total Gross Book Value (GBV) in excess of $150 billion dollars. AMR's expertise encompasses the project management and technological expertise to collect information within a corporate operating environment with limited disruption and maximum efficiency. The process incorporates a variety of quality control mechanisms to ensure completeness, accuracy, and uniformity of data. As a leading fixed assets inventory supplier in North America, AMR has developed the methodology, processes, procedures, systems and tools necessary to complete virtually any fixed asset inventory and reconciliation engagement. AMR's physical inventory and reconciliation experience is extensive and includes many high profile North American companies from virtually all industries. Our baseline fixed asset inventories have been performed for a variety of objectives including: Personal Property Tax Compliance and Analysis Regulatory Requirements (e.g., Sarbanes-Oxley, GASB 34, FASB No. 144) Enterprise Asset Management Lease Asset Analysis and Reconciliation Financial Reporting and Reconciliations Financial Systems Migration Asset Based Cost Accounting Tracking of Surplus Assets Cost Segregation (asset reclassification) Data Quality and Fortification Asset-Based Maintenance and Facility Management Internal Corporate Mandates System Implementations Equipment Asset Management IT Asset Management Facility Asset Management Maintenance Management This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 18 - 22
  20. 20. Sources “What's So Great About RFID Tags?” 26u%3D/ibd/20040813/bs_ibd_ibd/2004813managing%26e%3D4%26ncid+what%27s+so+great+about+r fid+tags&hl=en VeriChip one step closer to getting its technology into hospitals. It’s an RFID World Forrester evaluates RFID middleware leaders RFID Reader Has Split Personality Stopping Sticky Fingers with Tech What's Wrong With RFID?,1397,1632893,00.asp Radio Frequency Identification (RFID) Privacy: The Microsoft Perspective 00614b8bee63&displaylang=en RFID in Libraries Human chips more than skin deep 7337_3-5318076.html DaimlerChrysler sees savings in RFID tags,10801,91307,00.html RFID: adoption increases despite costs New Two-Frequency RFID System Meeting the Retail RFID Mandate Endnotes 1 5-Cent Tag Unlikely in 4 Years 2 RFID Labels for Less 3 Passive Tags Track Cars 4 IBM RFID-enables PIM, Microsoft Pilots RFID Middleware, Oracle Speaks of RFID Plans, PeopleSoft Launches RFID Technology, SAP unveils RFID middleware 5 DOD Logistics AIT Office 6 Wal-Mart Outlines RFID Expansion Plans 7 Marks & Spencer Expands RFID Trial, Tesco unveils RFID strategy, Target Issues RFID Mandate 8 9 RFID: What one of the world's biggest retailers found out,3800003425,39123651,00.htm This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 19 - 22
  21. 21. 10 Case Study: Ford's "Quality is Job 1" = Radio Frequency Identification (RFID) from Escort Memory Systems 11 Boeing Outlines Tagging Timetable 12 Airbus to work with LogicaCMG on spares tracking 13 Michelin Embeds RFID Tags in Tires 14 New Payment Services Offer Speed and Convenience 15 RFID chips with burgers new for McDonalds menu,39024663,39123310,00.htm 16 WH Linen 17 Reusable RFID Garment Tags 18 RFID technology could be used to build a national livestock-tracking system 19 NLIS News, November 2003, Sidebar: RFID tags key to some cattle ID programs,10801,88687,00.html?from=imuhe ads, United States Animal Identification program, National Animal Identification System 20 At Delta, tracking bags with radio tags 5254118.html?tag=html.alert , Delta Ups Service Bar with RFID Luggage Tracking http://crm- 21 Delta to test RFID for parts tracking,10801,93611,00.html 22 Vatican Library begins using computer chips to identify volumes 23 Position Paper: RFID and Libraries 24 Managing Assets with RFID 25 HALO Infant Protection System 26 Theme park takes visitors to RFID-land land/2100-1006_3-5366509.html 27 RFID beyond supply chain 28 Spies on a store shelf? 29 Companies test 'contactless' credit cards 13-swipeless-credit_x.htm, Visa, Philips team to promote 'contactless' credit card 30 Euro bank notes to embed RFID chips by 2005, Euro notes may be radio tagged,39020645,2135074,00.htm, Casino chips to carry RFID tags, Background research on the ''burning US 20 dollar bills'' story 31 Retrieving and Incorporating RFID data 32 FDA Endorses RFID Technology 33 Boston Hospital Will Track Assets With Wireless System,10801,96000,00.html, RFID to track medical devices in real time, RFID asset tags tested in 22 US hospitals 34 44,000 prison inmates to be RFID-chipped,39024663,39122811,00.htm 35 Wireless World: RFID to thwart terrorism This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 20 - 22
  22. 22. 36 RFID tags: Big Brother in small packages 37 Don't regulate RFID—yet 5327719.html?tag=html.alert 38 Radio ID chips to come with kill switch 39 Applied Digital Solutions Announces Working Prototype of Subdermal GPS Personal Location Device 40 RFID tags become hacker target 1029_3-5287912.html 41 Static over RFID 42 China’s RFID Conundrum, Inching Toward the RFID Revolution 43 Meeting the Retail RFID Mandate, 44 RFID To Flourish In Pharmaceutical Industry, Pharmaceuticals Industry Expected To Lead In RFID Tags On Items This White Paper is a service to our clients providing general information on selected technical topics. Clients are cautioned when attempting to use this general information to resolve specific technical problems. 21 - 22