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RFID in logistics: game changer or bust?


BACKGROUND

RFID, or Radio Frequency Identification has been a technology that was around for quite a while. Some date the idea of modern RFID technology all the way back to 1970s, when the first patents for active RFID tags were issued by the US Patent Office. Yet serious efforts to utilize RFID in the area of logistics came much later. It is close to 10 years ago that RFID Gen 2 specification was finalized. At the time the logistical and distribution industry looked at RFID as the next frontier, something that will revolutionize the area of logistics and will remove costly human interaction while increasing traceability and providing a truly real-time inventory management. With Intermec and Symbol leading the way, first real in-the-field implementations were developed, and tested in the real world environments. And…

HITTING THE BUMP

… and not much progress happened afterwards for awhile. Surely RFID projects were popping up here and there, and some of them would get a good amount of publicity. Some offshoots of RFID would get real traction, like RFID toll passes on US interstates, and RFID security badges. Some harsh environment projects or those instances where “line of site” barcode scanning was not feasible were also happening from time to time. But those were the exceptions, not the rule. The main promise of RFID tag on every box of cereal and every bottle of milk, so that you don’t have to scan your groceries at the checkout has never really materialized. Even the all hyped “every pallet shipped to Walmart from a vendor must have RFID tag” idea really never came to fruition.

There were multiple reasons for why this technology did not catch on as originally expected. Amongst them was named the fact that RFID relies on the radio waves, and those behave differently when placed on different materials. Tags will have a different optimal “read/write” distance when placed on the metallic surface versus a glass water bottle versus a plastic container. Another issue was that cost of the RFID equipment was quite high at the time. Adding to that a custom software solution to bring RFID integration into ERP would raise that bar even higher. And, of course, probably number one reason for not going the RFID route was the high price of consumables –  those pesky RFID tags that were supposed to be placed on every piece of inventory. Especially it was obvious when comparing an RFID label to a regular non-radio label. No matter how you look at it, ROI in many instances was simply not there.

NOW VS THEN

Ten years later, and it looks like things are finally picking up. RFID hardware is much cheaper now, and RFID tags are slowly becoming more affordable. This is probably due to the fact that RFID in its many forms is becoming more and more visible in a consumer space (Apple Pay, anyone?). Yes, this is not a logistical, industry grade RFID application we were all waiting for a decade, but it is definitely moving in the right direction.

As a side little note, RFID industry has seen a few consolidations, with Symbol becoming Motorola and eventually being acquired by Zebra, and Intermec becoming Honeywell. So, with the exception of Zebra, who at the time was only doing RFID printers, none of the original big players in RFID sandbox are the same. Nevertheless, there are plenty of RFID players around. And now, that this mostly dormant area of technology is becoming active again, those players are ready with their products for another attempt.

Finally, many businesses now look at this trend, and they dust off their old ideas and plans for total automation of their warehouses and true real-time inventory. After all, on average it takes ten times longer to do physical inventory with Barcode handhelds versus handheld RFID scanners. And that’s not even counting those implementations when RFID scanners mounted in the ceilings do a physical count of the entire warehouse space instantaneously, and can be programmed to run every hour if needed.magaza-urun-guvenlik-sistemi-rfid

RFID ADVANTAGES AND DISADVANTAGES

Even though these two lists have not changed much in the last ten years, they’re worth repeating here. Also, I simply love making lists, and I won’t waste this wonderful opportunity to make not one but two of them. Here are PROS and CONS for RFID vs a comparable Barcode implementation:

RFID PROS

  • RFID does not require line of site
  • Reading distance is quite high and is even higher on an active RFID tag
  • Does not generally require human interaction
  • Speed of reading is significantly higher than with barcode reader

RFID CONS

  • Cost of individual label is higher
  • Cost of equipment is higher
  • Tags have different effectiveness based on the material they are placed on
  • Tags store less data on average compared to 2D barcodes…

There are also questions of privacy, reliability over time, and incompatible standards in different countries. I’m listing here those things that are usually brought up in the same sentence with RFID.  Let me explain why I did not place these points into either PROS or CONS one by one.

Privacy usually is not a concern when it comes to inventory management and logistics. There are  probably those cases where RFID may not be the right solution because of privacy. I do not categorically rule that out. I just cannot think of such a scenario when it comes to inventory control. If it is acceptable to put a label on the piece of inventory being transported, and specify a ton of information on it, like vendor code, po number, item part number, manufacturing date, etc. – then it should not be concerning to place an RFID tag holding 96 bits of data in it.

Reliability overtime is something that needs to be investigated when choosing the kind of tag or a label, of course. In some environments, like high humidity or high temperature, the RFID tag that was not specifically designed to operate in that environment may overtime become unreadable. It is also the case with a basic barcode label, though. In one example, a customer that was selling trees, needed to print their barcodes on a specific plastic label to ensure that outside elements like rain will not damage the barcode overtime. Reliability is addressed simply by selecting the correct tag to do the job.

Finally, the question of incompatible RFID standards across different countries should be addressed in two parts. First part is data tag format: different countries have different standards, but they are almost always convertible (UPC-> EAN) or can be cross-referenced.  Second part is RFID spectrum limitations: yes, there are differences in frequencies between North/South Americas and EU. RFID readers are supposed to operate in 868 Mhz for EU and Middle East versus 902-928 Mhz for Americas. There are tags, though, that have dual-antenna configuration and they operate properly in both frequencies. Intermec (now Honeywell) has pioneered this technology, and now it is widely used by many RFID tag producers. Therefore, RFID cross-country compatibility should be something to keep in mind, but it is no more or less of a problem as with regular barcode standards.

 

TRENT UPWARD

All of this being said, there is a huge potential with RFID and it looks like many businesses begin to give this technology a second look. Potential savings on labor costs are such that this technology simply cannot do anything else but succeed. And that is even before we realize just how much more accurate the data collection process becomes when specific human interaction with the barcode label is no longer needed.

We are seeing a definite uptake in requests for RFID solutions in recent years, and if the trend continues, RFID will surely be a common place in distribution centers, logistical companies, manufacturing warehouses, and even delivery trucks of many businesses of today and tomorrow.

 

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