This document provides an overview of RFID (radio frequency identification) technology. It discusses the components of an RFID system including tags, readers, and software. It describes how RFID works and the history of its development. The document examines factors to consider when choosing RFID, such as tag type, frequency, and environment. It also outlines benefits of RFID like improved inventory management, security, and supply chain visibility compared to barcodes. RFID can enable automated tracking of products throughout the supply chain.

1. RFID 101
Bonni Kirkwood
Northeast Secure Value Chain Leader
Deloitte Consulting
bkirkwood@deloitte.com

2. Overview
• RFID Background
• RFID System Components
• Choosing RFID
• RFID Benefits and Applications

3. What is RFID?
• Radio Frequency Identification: Radio Frequency
is an automatic identification method in which
devices called RFID readers use radio frequency
waves to retrieve information from RFID Tags
• RFID is a non line-of-sight technology which
supports automated data capture for many
industries
• RFID can communicate information on a product,
its condition, and its history

4. The (not so) brief history of RFID
1940’s 1950’s 1960’s 1970’s 1980’s 1990’s 2000’s 2010+
• Major WW II •Early • RFID • Very early • Commercial • Emergence of • First CPG • RFID costs
development explorations of companies adopters applications for initial RF open retailer auto drop
efforts RFID Sensormatic implement RFID enter the standards ID pilot
technology & Check- mainstream launched • Technology
• RFID invented point are • RCA and • RFID widely hurdles
in 1948 •Long –range founded Fairchild • Applications deployed in • Gillette buys eliminated
transponder publish emerge in toll collection, 500M tags
systems for “Electronic ID transport, animal tagging from Alien • Non clone
“ID” of friend System” industrial, and personal able tags
and Foe (IFF) personnel identification • Walmart & introduced
for aircraft • NY and NJ Port access and DOD
Authority test animal tagging • MIT announce • Sensitivity and
electronic toll establishes supplier bandwidth
applications • Toll roads the Auto ID mandate improved in
worldwide are Center UHF
equipped with • Pharma Track
RFID and Trace
requirement
emerge

5. • RFID Background
• RFID System Components
• Choosing RFID
• RFID Benefits and Applications

6. RFID technology enables auto-identification
through the use of three major components –
tags, readers and software
Tags Readers IT Architecture
• ID Device comprised of a • Data retrieved via an antenna • Software gathers and manages
microchip and an antenna from the RFID tags data
that store/transmit data
• Data passed to systems • Data communicated into
• Memory contains existing enterprise applications
Electronic Product Code (WMS, ERP, etc.)
(EPC) that uniquely
• Common digital language
identifies each product
describes products
• Tags may be active or
passive

7. How the three major components of an RFID
system work together
• An RFID tag may store and transmit data • When an RFID tag detects • The reader decodes data it
like serial number or NDC, model, price, electromagnetic energy, its receives from the RFID tag
date of manufacturer of a tagged product antenna enables the chip to and passes it to a computer
receive and reply to radio system for processing
• May store information about an animal or
frequency signals from an
a person’s identity, details of the account
RFID Reader
to which a tagged smartcard links, or codes
required for security clearance
• May also include built-in sensors that
detect and transmit information about the
condition of a product – e.g., temperature
or tampering

8. TAGS: Depending on the application and physical
requirements, RFID systems can use active (battery
powered) or passive (reader powered) tags
Passive Active
•Powered by RF waves - no internal power •Includes power source and transmitter for
read/write capabilities
•Reflects energy radiated by reader
•Larger than passive tags
•Sized to product
•Additional functionality, such as monitoring
•Used for track and trace, inventory, shipping
temperature, humidity, shock/vibration
•No batteries - Cost <$1 •Cost range $20-$50
•Effective range of up to 30 feet •Effective range of 1000+ feet
•Examples: ExxonMobil Speedpass •Examples: EZ Pass car toll systems, container
environment monitoring

9. READERS: RFID readers are designed to perform
the following functions:
Antenna
Interface to Host Computer
• Interrogate (RS485, RS232/422, ethernet,
• Communicate 802.11 etc.)
• Translate
• Resolve Antenna
Tag Reader

10. There are several peripheral devices and
enabled locations that support an RFID system
Manufacturing/Packaging Distribution Retail/Hospital
• Applicators • Forklift enabled readers • Dock Portals
• Stretch wrap • Perimeter doors • Staging/holding
• Commissioning station • Receiving Dock Portals • Case Crusher/compactor
• Receiving dock portal • POS locations
• Shipping dock portals • Shelving
• Perimeter doors
• Carts and trolleys
Printers./ Turntable
programmers readers
Mobile In line
readers applicators
Smartcart Dock Portal

11. Passive RFID tags consist of three parts:
1. A silicon microchip: holds information about the
physical object to which the tag is attached
2. An antenna: transmits information 3. Conversion: encases the chip and
to a reader (e.g., a handled, antenna so that the tag can be
warehouse portal, pharmacy or attached to physical object
store shelf) using radio waves
Sample tags

12. RFID systems can only use frequency ranges that have
been reserved specifically for industrial, scientific or
medical applications or for short range devices
LF:
•Uses Magnetic field (Near field)
• RFID frequencies: •Better able to penetrate non-metallic substances
•Ideal for scanning objects with high-water content
•Read range is limited to < 1ft
–Low-frequency (around 125 KHz)
HF:
•Uses Magnetic field (Near field)
–High-frequency (13.56 MHz); and •Can work around goods with high water content
•Practical read range is in inches
–Ultra-high-frequency or UHF (860- UHF:
960 MHz) • Uses Magnetic (Near field) and/or the Electric (Far field)
• Tags are more simplistic and hence less expensive
• Can be used for waters, coupled to metals for greater range
• Used for items, cases and pallets
• Read ranges from an inch to 100+ feet away
Magnetic Field = Inductive Field = Near Field
Electric Field = Far Field

13. The EPC data format used with RFID is more
specific and unique than bar coding
•UPC – Universal Product Code : Associated with Bar Code Technology. A means of
identifying a manufacturer and generic object category.
•EPC – Electronic Product Code: A unique identification code associated with RFID
Technology. A means of associating a manufacturer, object and a specific item via a
unique serial number, allowing reference to a specific item, origination, date of
production, etc.

14. EPC is the basis for RFID
•The EPC stores product information in the form of a value in each tag
•This value is composed of the following elements:
Header (8 bits): EPC Manager (28 bits): Object Class (24 bits): Serial Number (36 bits):
Used to indicate EPC Used to indicate the Identifies the product Provides the unique
version and may company and the group and is identical product serial number
identify variant naming manufacturer – similar to the GTIN* number
schemes. Also can be to company identifier
used for future labeling in GTIN* formats
extensions
*Global Trade Identification Number (GTIN) is the interoperable
data format that USS and EAN numbering systems conform to

15. • RFID Background
• RFID System Components
• Choosing RFID
• RFID Benefits and Applications

16. Factors to consider when choosing passive tags
Considerations
Where will the tags be used? • The location will define the frequency, cycle, antenna pattern, data
Are there other RF activities? rate and power limitations (to avoid interference etc.)
What will my trading • Read only
partners need? • Read/write
• Complexity and cost involved if deploying multiple technologies; e.g.
2D for small items, LF or HF for water based products, UHF for cases
and pallets.
What kind of product will be • Characteristics (round, square, liquid, glass, plastic), cartons, totes
tagged? • Determines size of tag, the kind of adhesive and placement location
How will I build my • Placement of tags
hierarchy? • Alignment
• Aggregation
What kind of environment •Cold Chain
will the tags need to •Humid
withstand? •High temperature

17. While there are factors that can impact tag
performance, knowing how to optimize tags and
system configurations is important for success
Considerations
Tag shape • Antenna shapes can effect performance- more sensitive silicon has
improved this
Tag size • Large antenna mean larger tags and longer read range
Read rate of tags • Rapid rate is suggested
Tag packaging • May effect durability
• Foam, stickers, plastic cases (conversion)
Tag sensitivity • Greater chip sensitivity, longer read range
Tag stacking • Tags stacked closely together may interfere with one another
Number of tag antennas • Readability can be reduced if a tag has one antenna that is
sensitive to orientation
• Double dipole tags alleviate orientation issues, but are more
expensive and are larger
What product is attached to •Cardboard, plastic, clothing
•Metal, water

18. Different types of auto id tags/technologies can
be used at various points in the product hierarchy
Bar Code/ Linear or 2D Passive RFID Semi-Active or Active GPS
L1 -Item L2 -Packaging L3 -Case/Pallet/Unit Load L4 -Container L5 -Vehicle
Passive Tags: Semi-Active Tags: Active Tags: GPS:
• Low cost • Higher cost •High cost (10-100x) • Highest cost
• Long Life • Battery, more memory •Battery and electronics (10Y life) • Extended range –
• Range 1- 30 ft • Range of ~150 ft •Long range ~ 1000+ ft satellite based data
• Typically used for L1–L3 • Typically used for L3-L4 •Larger in size capture – cargo/vehicles
•Wider range of applications • Typically used for L4-L5
•Typically used for L3 – L5

19. RFID is the ‘next generation bar code’ and is
already delivering additional benefits
Bar Code Labeling and Scanning RFID
Price • Low cost • Material is expensive compared to linear and 2D
bar codes –but can return higher ROI
Capacity • Limited space – typically only simple • Can hold substantial amounts of data (96-256 bits)
identifiers (e.g. lot#, SKU) are stored • Can track events and make decisions at lower
• Low granularity of data level, real time = new opportunities for process
• Read only optimization and traceability
• Can read and write information from partners
Flexibility • Line of site reading required • No line of site required - proximity only resulting
• One simultaneous scan per read in simpler handling of goods
• Multiple simultaneous tag scans per read
Accuracy • Human intervention opens possibilities for • Fully automated and nearly error-free
errors • O.H.I.O. principle – Zero Human Interventions
Operations – reducing labor requirements
Durability • Labels can be easily damaged, destroyed •Tags are more durable
and duplicated •Tags can operate in harsh environments

20. • RFID Background
• RFID System Components
• Choosing RFID
• RFID Benefits and Applications

21. RFID drives benefits that directly impact organizations
Value
Regulatory /
Revenue Growth Operating Margin Asset Efficiency
Expectations
Price SG&A Inventory Patient
Realization Safety
• Chargeback accuracy • Returns management • Working capital • Counterfeit prevention
• Reduce wholesale shortages effectiveness • Channel inventory • Recall management
• Diversion prevention & tracking • Order accuracy management • Patient compliance
• Customer complaint data accuracy • Recall management • Excess Inventory reduction management
• Trade partner terms effectiveness • Clinical Product Tracking • Clinical Trial Management
• Government pricing/ ASP • Adverse event tracking • Increase disaster response
• Negotiating leverage as industry • Demo kit controls inventory identification
leader • Transportation leakage • Shrinkage reduction
management • Direct-ship to the MD* Strengths
• Sales force compensation
Volume
• CMO efficiency • Brand Equity
• Sales uplift • Free product controls
PP&E
• Promotions effectiveness • Shipping & Handling* External
• Market data effectiveness • Inventory cycles • Improve equipment availability, Factors
• Demand planning efficiency, throughput (OEE)
• Launch planning COGS • Utilize more robust and scalable • Regulatory relationships
• Provider contracting (non- IT systems
government pricing) • Upstream supply chain benefits
• Anti-counterfeiting (product
authentication) Legend :
• Black – Tangible; quantified
Source: Deloitte • Grey – Qualitative or future benefit
• Red - RFID Direct Benefit
*Scale of Potential benefits will vary with the implementation of Track & Trace

22. Point, closed and open RFID solutions can be deployed
within the supply chain–with varying benefits
Point Linear, Closed Network Open
1. Manufacturer 2. Wholesaler 7. Pharmacy
6. Importer
Manufacturer Community
Plant Hub DC Pharmacy
Contract 4. Repacker
Specialty
Manufacturer Pharmacy
Plant
Local DC
Contract
Independent
Packaging
Pharmacy
Plant
3. Retail Chain
Packaging Prescriber/
Plant 8. Patient
Warehouse Provider
pharmacy
Distribution 5. Secondary
Center Hospital
Wholesaler
3rd Party Chain Pharmacy
Logistics Mail Order
Provider
Internet
Description • Stand alone solution • Linear solution that does not • A solution that is deployed
within four walls of have to be end-to end (e.g., a throughout a supply chain
facility supply chain route) integrated network
Who • A particular function • All parties in the chain that • The benefits are gained by all
benefits? or point in the ‘touch’ the RFID parties in the supply chain
supply chain
Examples • Tagging warehouse • Tagging of returnable totes •Item level tagging of medical
assets for yard from wholesalers to retail devices through the supply
management pharmacies chain

23. Initially RFID opportunities have been at discrete entities.
With time, opportunities will grow to encompass the
entire supply chain
Hospital/
Supplier Manufacturer Wholesaler 3PL Pharmacy
Consumer
Reusable containers
Reusable containers Reusable containers
Reusable containers
Short term
Production scheduling
Production scheduling Inbound receiving
Inbound receiving
Supply planning
Supply planning Pallet and tote location and tracking
Pallet and tote location and tracking
Pallet Inbound receiving
Inbound receiving Delivery planning
Delivery planning
Case Inventory Management
Inventory Management
Pick, pack and ship
Pick, pack and ship Inventory visibility
Inventory visibility
Back room/inventory loss prevention
Back room/inventory loss prevention
Demand planning – DC and retail pharmacy
Demand planning – DC and retail pharmacy
Item Inventory counts Pick, pack and ship Pharmacy LP Self authentication
Inventory counts Pick, pack and ship Pharmacy LP Self authentication
Long term
Demand planning – pharmacy shelf level, pricing, availability, vmi
Demand planning – pharmacy shelf level, pricing, availability, vmi
Safety and Security – Track and Trace
Safety and Security – Track and Trace
Reverse Supply Chain (recalls, returns, charge backs)
Reverse Supply Chain (recalls, returns, charge backs)

24. RFID applications impact every major industry
Healthcare & Life Sciences Transportation Manufacturing
Potential Value Potential Value Potential Value
Applications Applications Applications
• Counterfeit protection • Electronic Payment & • Process control
Ticketing
• Drug validation and • Inventory Management &
compliance • Baggage Management Visibility
• Product recall • Part supply/auto
• Yard Management replenishment
• On shelf availability • Asset Tracking
• Transportation Tracking
• Inventory management & • Product recall
visibility • Asset Tracking
• Asset tracking • Total Management
• Terminal Management
• Patient and medical • Quality control
records tracking • Customs Clearance
• Medical waste • Transportation Tracking
• Vehicle Access
• Clinical trials • Authentication &
• Auto rental
Immobilization
High Low

25. Early Adopters of RFID
CPG Retailers TMT Transport Healthcare and FSI Auto CPG Mnfg.
Pharmaceuticals
• Inventory • Asset • Electronic • Inventory Mgmt, • POS payment • Process control • Loss
Mgmt tracking, POS payment & Loss prevention • Consumer prevention
payment ticketing experience
• Consumer • Process • Asset • Safety and • POS payment • Inventory • Inventory
experience control tracking Security management management
• Tool / productivity
Management
• Loss prevention • Vatican • Baggage • Inventory • POS payment • Product Recall • Asset
Library Mgmt Management Management (IV utilization
fluids) (bulk
containers)

26. Building a Business Case for RFID
Step 1 Step 2 Step 3 Step 4 Step 5 Step 6
Identify Assess Process Build Plan Pilot
Characterize Finalize RFID
Opportunity and Org. Business and
Opportunities Opportunities
Areas Impact Case Program
Shareholder Opportunity Impact Prioritized • Quantify opportunities
Map matrix assessment opportunities
• Identify people, process
and technology changes &
data needs
It’s important that you know what you want to use RFID for before
It’s important that you know what you want to use RFID for before
you consider implementing an RFID system • Build cost model and
you consider implementing an RFID system
pilot/program plan
If you know what aspects of your business processes you want to
If you know what aspects of your business processes you want to
improve through RFID, you can purchase the correct number of
improve through RFID, you can purchase the correct number of
tags, put the correct systems in place, and train employees
tags, put the correct systems in place, and train employees
correctly for the implementation
correctly for the implementation

27. What factors are influencing RFID adoption?
Considerations
Standards • Standards that govern how readers, tags and network infrastructures exist
Cost of tags • Reduction in the cost of tags is dependent upon demand
• RFID will likely remain more expensive than bar codes unless benefits
beyond current systems are identified
• Closed supply chain tracking can reuse tags - open supply chain seldom
does
Consumer Privacy • Consumers may have concerns that RFID device embedded in product may
transmit personal data
Mixed Solutions • Complicates infrastructure – some trading partners using different
identification (2D bar coding or linear)
Varying data formats • Writeable tags may contain varying data format, making them unreadable
except by customized readers

28. What will drive the future of RFID?
Regulatory bodies Improving economics
• Government bodies (DoD, • Reduction in cost of tags,
DHS, FDA) mandate RFID readers
usage
• Downward pricing on
• US and EU outlined Food RFID hardware will
Safety and Security continue
requirements RFID Acceptance and • Disruptive strategies
Adoption
Standards Industry pressure
• Global RFID standards • Retailers, Hospitals,
(EPCglobal, ISO) exist and Wholesalers are
are being augmented beginning to require
suppliers become RFID
capable
• Others are following

29. Thank You!
Questions?
Please contact :
Bonni Kirkwood
Northeast Secure Value Chain Leader
Deloitte Consulting
bkirkwood@deloitte.com