A New Technology is Roaring Toward You — Radio Frequency Identification (RFID)
Since it was introduced in the 1970s, bar-coding has been the modern technology
to track and manage inventory. Today, a new technology, Radio Frequency Identification
(RFID), is arriving on the scene and promises to be more revolutionary than
bar-coding ever was. RFID, a type of "smart label", does what bar-coding
cannot do; it provides constant information on the location and status of goods
in the supply chain. If you sell product to any of the major retailers or to
the Department of Defense (DOD) you may be soon facing a requirement to attach
RFID labels to your shipping containers or pallets.
In simple terms, an RFID smart label is made up of an integrated circuit (IC)
chip, a carrier substrate and an antenna - all incorporated into a pressure-sensitive
label. To make and read the labels and to use the information, the system requires
a special printer, a label reader or interrogator and special software, or middleware.
There are two kinds of RFID labels, passive and active.
Passive tags refer to RFID tags which are powered solely by the RFID interrogator
or reader. The interrogator emits a radio frequency (RF), which powers the silicon
chip on the tag when it is within range of the RF field. A forklift can travel
down the aisle in a warehouse and receive data from all the RFID tags on either
side. Active tags have their own power source, so they can receive a weaker
signal from the interrogator (i.e. be further away), and the power source on
the tag boosts the return signal. These types of tags have far greater range
than passive tags but cost more because of their size and sophistication. The
majority of tags are of the simple, passive variety.
Major retailers, such as Wal-Mart and Target, are aggressively implementing
RFID and requiring their suppliers to use RFID labels. Wal-Mart has installed
RFID systems in 104 Wal-Mart stores, 35 Sam's clubs and three distribution centers.
In total 14,000 pieces of hardware has been installed connected with 230 miles
of cable. Wal-Mart is making RFID data it reads available to suppliers within
30 minutes though its Retail Link extranet website. Suppliers do not have the
option of opting out of the program.
DOD is implementing RFID so that it can track shipments from the manufacturer
to the user in the battlefield. RFID gives visibility to supplies in transit
or in the warehouse. The Defense Department implementation is phased, beginning
this year and with full implementation by January 1, 2007.
There are many ways that a firm can satisfy an RFID requirement. First, and
least costly, is the approach where the firm simply buys the pre-printed and
pre- programmed labels from another company. In this approach, the firm does
not invest in a printer, reader or interrogator, has no "middleware"
and therefore gets no information or benefit from the RFID tags. On the other
hand, a firm may choose to purchase a complete RFID system so that it can not
only comply with contract requirements but so that it can use the information
generated by the tags to identify bottlenecks, provide customers with real time
information on the shipment and otherwise streamline its logistics system. There
are companies who can produce the labels for you, there are companies who can
supply all the hardware and software and there are consultants who can put it
all together in your operation. Welcome to the 21st century. More information
can be found at the DoD Logistics and Material Resources website: http://www.acq.osd.mil/log/logistics_materiel_readiness/organizations/sci/rfid/rfid_policy.html