• Share
  • Email
  • Embed
  • Like
  • Save
  • Private Content
RFID TECHNOLOGY
 

RFID TECHNOLOGY

on

  • 1,980 views

 

Statistics

Views

Total Views
1,980
Views on SlideShare
1,980
Embed Views
0

Actions

Likes
0
Downloads
84
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft Word

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    RFID TECHNOLOGY RFID TECHNOLOGY Document Transcript

    • TABLE OF CONTENTS LIST OF ILLUSTRATIONS Figure 1: 1st Barcode.................................................................................................1 Figure 2: Modern UPC................................................................................................1 Figure 3: RFID Tags......................................................................................................2
    • EXECUTIVE SUMMARY The adoption of a new technology in the business world is not dependant on flashy colors and snappy sound-bites used in modern advertising. Whether or not a technology is accepted or reject has much less to do with its aesthetic or technical merit than with its potential Return-On-Investment, or as it is more commonly known, the bottom-line. Radio Frequency Identification technologies are no exception. The technology has been around since WWII, but has only in the past 10 years has the ROI become significant. RFID INITIATIVES As a result of a great many successful pilot programs, we see many retailers and manufacturers running their own RFID pilot programs in order to evaluate their potential in a real world environment. Others, like Wal-Mart, Peugeot, and the U.S. government, have seen all they need to see. Both are currently committing to long term multi-million dollar RFID initiatives for both themselves and their suppliers. With such bold and bullish tactics, the small businesses that supply them are being forced into compliance. WHAT TO EXPECT All of these ultimatums and mandates are in the name of a faster, more stream-lined supply chain that is less susceptible to theft and “Out-of-Stock” issues. Analysts are projecting huge savings to be gained by the adoption of RFID technologies. While this makes the barcodes future seem bleak, do not expect them to disappear overnight. Most implementations of RFID tags will be in the form of a “Smart Label”, which feature a traditional barcode, RFID- based Electronic Product Code, and a human readable label. This will allow for a certain degree of backwards compatibility as well as fault tolerance and increased marketability. As with most new technologies, there are obstacles to widespread adoption. For RFID technologies, this opposition lies in privacy issues, as well as technical and logistical concerns. Many warn that information may be gathered from RFID enabled devices without the knowledge of the person to whom it belongs. This is serious cause for alarm among privacy advocates and other Orwellian alarmists. In the end, RFID tags are coming whether we like it or not. By breaking the chicken and the egg paradigm, Wal-Mart and other large retailers are forcing a supply chain revolution that calls for the enlistment of new hardware and software, as well as requiring employees to be retrained. The lack of trained experts in this emerging field has already lead to the creation of a new RFID discipline, which is to be appended to CompTIA’s catalog of technical certifications. ii
    • INTRODUCTION Few things move faster than big business. One exception is technology, which changes very quickly, a lot quicker than most people would like. With most technologies people have the choice to either accept or reject it. However, these decisions are often made for us by big business. While this greatly increases the adoption rate of a given technology, it usually comes at a premium. Every new technology comes with strings attached, almost always requiring either modification or total replacement of existing infrastructure. In addition, employees must be either retrained or replaced. Thus, adoption rates of new technologies among businesses, and to a degree, consumers, depend entirely on the bottom line. When the benefits provided by a given technology outweigh their perceived expense/risk, that technology becomes economically viable. It is at this point that companies begin to adopt or implement a new technology. However, it is important to note that what is viable for one company may be extremely impractical for another. This type of cost/benefit analysis is also known as the ROI or Return-On-Investment. With so many buzzwords and acronyms being thrown around, it is easy to become jaded towards new technologies and the lofty claims they ride in on. Lately, the most popular acronym around is RFID, which stands for Radio Frequency IDentification. Think of them as super barcodes. While the RFID technology has been around for close to fifty years, they have only recently become economically and technologically viable for business applications. This report will examine RFID technology in four parts. The first will be an overview and brief history of barcode and RFID technologies as they relate to business applications. Part two is concerned with the obstacles RFID technologies face, both now and in the future. In order to better understand how this technology is being implemented and with what degree of success, we will also explore several case studies and pilot programs conducted by both retailers and manufacturers. Finally, we will discuss the implications of this technology for everyone. THE TECHNOLOGY BARCODES The story begins in 1948 at the Drexel Institute of Technology in Philadelphia. A local food chain owner was overheard, by graduate student Bernard Silver, inquiring about the possibility of product information being read during checkout. This intrigued Silver, who partnered up with a fellow graduate student by the name of Joseph Woodland. On October 7, 1952, the first patent for a barcode product was awarded to them. Their concept was based on a 2 dimensional bulls-eye-like symbol (Figure-1), Figure 1: 1st Barcode Figure 2: Modern UPC as opposed to the 1 dimensional barcodes with which we are most familiar (Figure-2). Over the next two decades this technology was commercialized (Bellis, 2004). A barcode is pretty useless without a device to read it. And if you are going to read something, you and the person that wrote it are going to have to agree on a language before any communication can take place. The need for “a common language” or standard, called for the creation of a governing body that would handle such matters. This governing body was the Uniform Grocery Product Council, which we know today as the Uniform Code Council. Once a standard was decided upon, the first barcode products were ready for public consumption. The first scanner was installed June of 1974 in a
    • Troy, Ohio supermarket called Marsh’s. The first product scanned at the check-out counter was a 10-pack of Wrigley’s Juicy Fruit chewing gum which you can see for yourself at the Smithsonian Institution’s National Museum of American History. How They Work While we are all familiar with barcodes, most of us know little about how they actually work. About.com describes the first barcode as a pattern of four white lines on a black background. The first line was a datum line and the positions of the remaining three lines were fixed with respect to the first. The information was coded by the presence or absence of one or more of the lines. This allowed 7 different classifications of articles. However, the inventors noted that if more lines were added, more classifications could be coded. With 10 lines, 1023 classifications could be coded. The most current standard is so-called Code 128, which allows for the encoding of the full 128 character ASCII set. What They Can Offer Before the advent of the barcode, a manual record had to be kept of all inventory. This process was tedious and highly error prone. Usually merchandise was counted on the shelf rather than at the time of checkout. With the advent of UPC technology, Taking inventory just involved a quick scan by a reader and it was on to the next item. While this greatly reduces the potential for human error and is considerably faster, it still requires someone to physically scan every parcel. Every time an item is counted or “touched”, it costs time. Which, as we all know, time is money. Therefore anything that can be done to reduce the number of “touches,” will also save money. RFIDs Despite their recent popularity, RFIDs are not a new technology. They have been around since World War II. The United Kingdom was using RFID devices to distinguish returning English aircraft from inbound German ones (Wikipedia, 2004). RFIDs found another purpose in the 1980s in the form of keyless entry systems for cars and restricted areas. However, it is only in the past ten years that the ROI has made it practical for widespread commercial use. This is primarily due to advancements in the lithographic processes used to print the circuitry which makes RFID technology possible. How They Work An RFID System consists of three components: a transceiver, a transponder, and each require at least one antenna. The transponders, or RFID tags, come in a variety of flavors, as seen in Figure 3. RFID tags are available in two flavors, active and passive. You then have your choice of either read/write or read only models. Passive tags use the principles of electromagnetic induction to produce a very small current in the antenna which is used to power the tags integrated circuitry. Alternatively, active tags feature a power source, lasting as long as several years, that serve to both boost the radio signal as well as making it possible for the storage of more information over a longer period of Figure 3: RFID Tags time than traditional passive tags. So once a tag is powered either actively by an onboard battery or passively, by a nearby transceiver (reader), it is then “interrogated” for the information held in its memory. Finally, this information is acted upon by some sort of programmable logic device. A programmable logic device is either a 2
    • computer or a proprietary embedded system that is able to take the necessary action based on a given set of conditions. These devices communicate on a variety of frequencies, ranging from 125 kHz to 5.8 GHz, each having their own strengths, weaknesses, and applications. (Wikipedia, 2004) What They Can Offer RFID tags offer real time, accurate data acquisition that requires almost zero manual labor to obtain. With this information you are able to spot potential problems in the supply chain and correct them proactively. With RFID technologies, retailers and manufacturers can keep track of their assets all the way from the warehouse to the check out counter. RFID tags offer increased savings over conventional barcode systems which were error-prone and required costly “touches” in order to be counted. Using RFID tags to identify products, your inventory can be kept in real time by scanners placed on the shipping bay doors. As a pallet leaves the warehouse, your inventory is automatically updated in real-time. Should your stock drop below a certain point, an automated purchasing order can be sent to your supplier. Imagine you walk into your warehouse to fill an order and everything is randomly stacked on the shelf. Your entire inventory is mixed with no sign of a logical sorting method. How can you possibly find anything? RFID smart labels make such organization, or the lack there of, not only possible, but profitable and efficient. Before your inventive warehouse organization technique, if an order came in for product A and product Z, you would have to walk from one end of your warehouse to the other in order to fill that customers order, presuming you stock your shelves alphabetically. Now imagine you are using your new “put it the first place you find” shelf stocking technique. The same order comes in and your handheld RFID reader informs you that the closest Product A is on the shelf to your right and Product B is around the corner on the top shelf. This unique form of organization has been statistically shown by a computer model to be a more efficient method of sorting than traditional techniques (Wikipedia, 2004). APPLICATIONS The following list, compiled by UsingRFID.com, outlines the major business applications of RFID technology: • Inventory management • Improved efficiencies in shipping and receiving • Reduction in 'shrinkage' (loss of goods or assets) • Reducing 'out of stock' situations • Asset and resource tracking • Improving quality control The most obvious application of RFIDs is to replace or at least enhance barcode technologies in B2B applications. The following table illustrates some of the differences between the conventional UPC barcode systems and the modern Electronic Product Code. UPC EPC Requires line of sight Can be read for variety of distances Cannot be rewritten Available in a Read/Write format Comparatively narrow applications for use Very diverse applications for use possible Extremely cheap to print considerably more expensive to print Infrastructure is already in place Infrastructure virtually non-existent Very little room to grow Large amounts of head room for future applications Figure 4: UPC vs EPC 3
    • Now Applications of RFID technology currently range from pet identification systems to the OnStar tracking and information system found in luxury vehicles. The following table depicts some of the current uses of RFID technology by the frequency they occupy. Frequency Application Low (125 kHz) Pet identification, beer keg tracking, keyless entry, anti-theft systems Library books, pallet tracking, building access control, airline baggage tracking, High (13.5 MHz) clothing, identification badges Ultra High (400-930 MHz) Pallet and container tracking, truck and trailer tracking in shipping yards Microwave Toll booths, long range access control for vehicles, i.e. GM’s OnStar system Figure 5: Current RFID Applications Perhaps the main use of RFID technology that we are likely to see, now and for many years to come, is in the form of so-called “smart labels”. These are labels that offer a human readable description, a standard barcode, and a RFID tag. This will allow for the co- existence of all the forms of inventory tracking and management. One of the first major implementations of smart label technology will be in the pharmaceutical industry, where counterfeit medications have become a serious problem. Drug manufactures hope smart labels can help to eliminate this problem before it gets any worse. Later In the future, we will see RFID tags find their way into a lot more than our cars and pets. Imagine wearing a very small sticker on the back of your watch or tucked away in your wallet. You are arriving home from work and upon approaching the front door, the outside light turns on, the front door unlocks, and then opens itself. As you move through the home the lights are turned on and off appropriately. This is just a small example of things to come. These changes will be enabled by the advent of new RFID manufacturing processes like “Chipless” RFID smart labels. These labels will feature a10m interrogation ranges and 256 bits of storage capacity, at a projected one tenth the cost of their silicon-based predecessors (Wikipedia, 2004). While much of the speculation on RFIDs future potential is speculative and highly dependant on the success of ongoing scientific research, one thing is for sure, retail companies will be at the forefront. Already clothing companies, like Prada, are using RFIDs in their clothing and “preferred customer” cards to augment their retail stores (Learning from Prada, 2004). Currently a subsidiary of the UCC, known as EPCglobal, has been formed and is creating a standard known in short as EPC or Electronic Product Code. EPC’s will eventually replace UPCs or Universal Product Codes, but do not hold your breath, because the barcode is not going away anytime soon. Too much time, effort, and infrastructure are already in place for barcodes to disappear overnight (Wikipedia, 2004). THE RFID MARKET The RFID market for the year of 2003 was ~3.1 billion, according to Allied Business Intelligence, a respected research firm. The largest RFID consumer was of course the U.S. military, which in late 2003, mandated that all goods purchased by the military were to be tracked using RFID technology. This, combined with dropping prices for RFID enabled products and increased public visibility, has greatly spurred adoption of the technology (Marselli, 2003). The current year, 2004, has seen many RFID pilot programs started by both large and small businesses. 4
    • Many major retailers and manufactures have launched pilot programs, such as Wal-Mart, Michelin, UPS and others. 2005 looks to be the year for actually wide-spread implementation of RFID systems. Also worth noting, the price of passive RFID tags is expected to drop to less than 5 cents in 2005(Dixon, 2004). The compliance deadlines for many suppliers of the Department of Defense and Wal-Mart, to implement RFID systems either partially or in full, are also coming in 2005. “Within the current decade more of these RFIDs will be made each year than there are people alive on earth. Once prices fall to less than 2 cents per tag, retail usage will explode with anything from 20 - 40 billion tagged products sold a year” (Dixon, 2004). OBSTICALS PRIVACY Many privacy concerns have been raised, from frivolous Orwellian claims of big brother, to real issues of personal privacy that affect us all. Some fear that a burglar could effectively window shop from house to house with an RFID reader. Others warn that the technology could be used to track you long after leaving the retailer’s store (Gross, 2004). While these concerns are largely unfounded, some are raising very real questions about RFID technologies potential for abuse. Chairman of Global Change Ltd, Dr. Dixon said, “Hacking into RFIDs is not so difficult. Devices at present have such tiny memories and processing power that hacking is less of a technical challenge than entering a corporate server - and once you succeed, hundreds of millions of tags are then wide open for reading and writing data” (2004). The public has largely responded negatively towards the placement of RFID tags on an item level. Many consumer and privacy advocates are pushing for retailers to voluntarily notify their customers of the presence of RFID tags in the goods they purchase. Others are pushing for a way to effectively kill the chips at the time of purchase. Ari Schwartz, associate director of the Center for Democracy and Technology (CDT) is quoted as saying “Most of the benefit out there comes on the back end, in the stock room, and most of the privacy concerns come when it leaves the stock room” (2004). INFRASTRUCTURE New RFID systems are being developed constantly. However, RFID technologies require a great deal of infrastructure to be in place before you can take advantage of its many benefits. Handheld RFID readers currently cost approximately $2,000. RFID tags range from twenty-five cents to a dollar a piece, depending on form-factor, capacity, and type. Don’t forget, you are going to need special printers for on demand printing of the so-called “Smart Labels”. In addition to these hardware requirements, implementing an RFID system also requires the purchase of new software with which to manage and track your inventory. With new infrastructure also comes the need to train employees on the proper operation of the new systems. In fact, CompTIA will be offering a new certificate in RFID applications very soon. Perhaps one of the most important things to come will be the adoption of RFID standards. Currently there are many RFID related standards on the table. ISO 15693 defines how RFID readers and tags communicate with each other. ISO 18000 covers a broader range that will encompass ISO 15693 as well as adding additional functionality. Another standard, ISO 14443 has been in use for “smart cards” in financial applications for some time now. 5
    • CASE STUDIES So who is currently using or piloting RFID technologies? RFID enabled technologies can be found in the dressing rooms of Prada’s New York retail outlet. The tags appear on the clothing and become activated when in close proximity to the readers, which are located in walls of the dressing room. This allows the shopper to pick different sizes, colors, and matching accessories to the outfits they are trying on. (Learning from Prada, 2004). RFID tags are also being tested in several airports to track luggage as well as passengers. The U.S. government recently approved a proposal to embed RFID tags in U.S. passports, in hopes of speeding up air travel as well as increasing security. Even water parks are using RFID tags to allow customers to store money on RFID enabled wristbands. This provides obvious benefits to the customer, but it provides an unparallel level of statistical data to the park. With this technology, they can easily track, in real-time, where you go within the park, what you do, for how long, and with whom you were with. This information can then be used to improve the layout and design of the park or to simply reunite families whose children are lost. WAL-MART The largest retailer in the world, Wal-Mart, has 100 distribution centers, 3000 stores, and handles nearly100 million pallets which hold over 3 billion cases and cartons each year (RFID Webinar, 2004). After recently deciding they were ready to invest in RFID technologies for use in their supply chain management systems, Wal-Mart went ahead and decided that their top 100 suppliers were also ready to take the plunge and that they would do so by January 1, 2005. Wal-Mart’s first phase is to use pallet and case/carton level tracking in 3 regional distribution centers, and 150 stores (RFID Webinar, 2004). An Offer They Can’t Refuse In 2003, Wal-Mart’s revenues were approximately 250 billion dollars. That same year, the GDP of Columbia was approximately 255 billion dollars. Wal-Mart is now using its massive market presence in order to force its suppliers to adopt a technology that they would have otherwise waited to mature and become more standardized. Wal-Mart has not only shown leadership, but they have effectively broken the chicken and egg paradigm that plagued this budding technology. Wal-Mart’s commitment to RFID technology is made clear in the recent expansion of their original ultimatum. Now, not only do their top 100 suppliers have to be “RFID compliant” by January 1, 2005, but all of the suppliers must be RFID compliant by the end of 2006 (RFID Journal, 2003). PEUGEOT Vehicle manufactures were some of the first to see the benefits of RFID technologies. In Poissy France, at the Peugeot car plant, a large network of over 80 Eureka RFID readers and over 2000 Eureka 415 Read/Write RFID tags are streamlining the manufacturing process. A highly durable RFID tag is attached to the frame of the vehicle at the begging of the assembly line. Through out the build process, information is passed back and forth between the tags and the interrogating antennae placed along the assembly line. These tags can allow for a car to be constructed based on a custom order received from a car dealer. This type of real-time manufacturing was never before possible with conventional unidirectional barcode technologies. At the end of the assembly line, the RFID tags are removed from the cars and recycled. This also allows car dealers to have real-time information about the stock or status of a particular vehicle (Production line tracking at Peugeot). 6
    • IMPLICATIONS In order to understand the many implications of RFID enabled technologies, we should first compare RFIDs potential usefulness to the existing methods of inventory management and supply chain tracking. It is largely because of the costs of upgrading/replacing their current systems coupled with the fear of “rocking the boat”, so to speak, that more manufacturers and retailers have not already adopted RFID enabled technologies. As more and more businesses see the success obtained through the use of RFID systems by other industries and their competitors, we will see a marked increase in the RFID market. As previously stated, the largest proponents of RFID technology are the U.S. government and large retailers, both in the U.S. and abroad. Due to the current costs of RFID tags, between $0.25 and $1, we are more likely to find them used with pallet or case based tracking, with the exception of some higher priced items like electronics or automobiles. In the near future however, as the price of RFID tags lowers to less than 5 cents a piece we will begin see them integrated into everyday items. These benefits extend to the consumer as well, who will receive an incredible influx of “smart” devices. These will be RFID enabled devices that will serve to further automate homes, and businesses. CONCLUSIONS Despite the outrage of many doomsayers and privacy advocates, RFID Technology is poised to change the way we not only do business, but also the way we live. Because of RFID enabled devices, we can already drive through toll bridges and pay for gas without pulling out your wallet. In the years to follow, we will begin to see RFID tags on everything from your new TV to your toothbrush. RFID enabled retailers will be able to reduce theft and “Out of Stock” situations while increasing productivity, as well as maintaining a smaller, more efficient inventory. Advertisers will be able to target you with specific ads based on the RFID tags embedded in your belongings. The biggest proponents of RFID technology have been the U.S. government as well as large retailers like Wal-Mart. They are doing a great deal to spur the adoption rate of the RFID technologies that make this all possible. By exercising their massive marketing muscle, they can single handedly drag the retail and manufacturing markets, as well as the rest of us, kicking and screaming into the future. Many small businesses will have no choice but to go along with the crowd, especially considering the RFID compliance mandates and ultimatums being issued around the world by governemtents, manufacturers and retailers alike. The RFID market will continue to rise exponentially for many years to come with many new and exiting avant-garde applications for businesses and consumers alike. 7
    • RESOURCES Bellis, Mary. (2004). Inventors: bar codes. Retrieved from http://inventors.about.com/library/ inventors/blbar_code.htm Dixon, Dr Patrick. (2004, January). RFIDs: great new logistics business or brave new world? Global Change. Retrieved from http://www.globalchange.com/rfids.htm Gross, Grant. (2004, May 28). RFID and privacy: debate heating up in Washington. IDG News Service. Retrieved from http://infoworld.com/article/04/05/28/HNrfidprivacy_1.html Learning from Prada. (2002, June 24). RFID Journal. Retrieved December 5, 2004, from http://www.rfidjournal.com/article/articleview/272 Marselli, Jennifer. (2003, July 18). ABI: RFID Market Poised for Growth. RFID Journal. Retrieved December 5, 2004, from http://www.rfidjournal.com/article/articleview/506/1/1/ Production line tracking at Peugeot. (n.d.). Retrieved December 7, 2004, from http://www.avonwood.co.uk/casestudies/index.asp RFID Journal. (2003, August 18). Wal-Mart expands RFID mandate. Retrieved December 5, 2004, from http://www.rfidjournal.com/article/articleview/539/1/1/ Wikipedia. (2004, December 2) RFID. Retrieved December 5, 2004, from http://en.wikipedia.org/wiki/RFID Zebra. Radio Frequency Identification Webinar. (n.d.) Retrieved December 3, 2004, from http://rfid.zebra.com/RFID_webinar.html