RFID: Can it help your business?

Summary:In 10 years almost everything will be tagged, say the experts. So what are these little chips that are soon to be so pervasive, and how will they take over your business?

Starving for standards
Secrets and trials
Chipping the chains
RFID a real asset
Future potential
Executive summary

Starving for standards
There have been few standards until relatively recently. EPCglobal ratified key standards in late 2004, says Will Duckworth, wireless leader Asia-Pacific at IBM Business Consulting Services, and trial quantities of the resulting Class 1 Generation 2 (Gen 2) tags and readers are already available from manufacturers such as Philips. Other manufacturers including Texas Instruments (TI) and Siemens are ramping up production, and volume supplies are expected mid-year.

One reason for the delay is that Gen 2 is a hybrid solution using the best features from various proposals, says Geoffrey Ramadan, chair of Automatic Data Capture Australia and managing director of Unique Micro Design. This means none of the companies behind the proposals could steal a march on the others.

Some organisations have been delaying RFID projects in anticipation of Gen 2, says Duckworth, and some early adopters such as European retailer Metro will move to Gen 2 as quickly as they can. The standard covers UHF operation (roughly 860-960MHz), which is where most interest lies, and Gen 2 tags are compatible with any readers in this range, whether they operate at 918-926MHz (as used in Australia), 902-928MHz (US), or another nations' allocated spectrum.

HF (13.56MHz) tags are also part of the standard, and Christoph Lessmoellmann, senior business consultant, at SAP says they are often used on spare parts. Duckworth suggests that HF tags are beginning to be taken more seriously for applications that only require short ranges. EAN Australia is looking at HF tags this year, says Fiona Wilson, general manager standards development of trade group EAN Australia, due to interest from the health and life science industries for product authentication.

Apart from compatibility, global standards mean economies of scale: "tags will be seen as consumables," predicts Edwards. Current volume prices are around 15 cents per tag, but "the five-cent tag is not a long way off yet," says Barrows.

The new standards represent a performance improvement, with 4w UHF ranges of up to seven metres with fixed readers and up to 2.5 metres with handheld devices.

Australian users are currently restricted to 1w for UHF, which limits the range to one to two metres. Wilson says that EAN Australia has been working with the Australian Communications Authority (ACA) to move to 4w, and Ramadan expects resolution by the end of this year, "then we can move forward." Meanwhile, organisations may seek a site licence to use more powerful readers, says Edwards.

"Everyone believes in [Gen 2]," says Duckworth, and its more efficient protocol allows faster reads -- up to 1700 reads per second are expected with 4w readers, or 600 reads per second at 1w. "Still a great improvement," he adds.

Wilson says the Electronic Product Code (EPC) standards are "at a reasonably mature stage" and expects ISO ratification in a "reasonably quick" nine months, as many of the ISO signatories are also EAN participants.

Most common barcode types have been mapped to EPC numbers, says Wilson, and the addition of a serial number gives a unique ID for each unit.

EPC "is more than the tags, readers and the numbers on the tags," says Wilson. One objective of many RFID projects is to connect multiple participants (eg, in a supply chain). For example, a manufacturer can serialise a tag to uniquely identify a pallet of cornflakes, and then the retailer can look up the use-by date for that batch to assist in stock rotation, using the tag as a key to the information.

EPC is setting up such a system, called the EPCglobal Network. A tag number can be sent to the ONS (Object Naming Service) registry, which provides "directions" to systems operated by the manufacturer and other participants that have handled the item. It is then up to those systems to determine whether the source of the query is entitled to access the data.

The EPCglobal Network is being managed by VeriSign, which is used to operating 24x7 infrastructure, says Ben Armstrong, VeriSign's naming and directory services manager, as it runs the .com and .net namespaces and is now developing additional services that run on the same platform.

A large US retailer is connecting with six of its major suppliers using this method to share information across the manufacturer/distribution centre/store chain, says Duckworth.

The EPCglobal Network "will mature as people use it" Wilson says. An Australian pilot will be carried out this year with EAN Australia as the sponsor and manager in conjunction with CSIRO. It will involve a retailer, two brand owners, a transport company, a packaging company and a returnable asset supplier.

While organisations express some concern about sharing information, the EPC model lets everyone store their own information and decide how to expose it to their partners, says Duckworth, although the standards to support the privacy and security controls needed are still being developed.

While there is some concern that companies will be reluctant to share information with their partners, Wilson draws a parallel with vendor managed inventory, an arrangement that works well for both sides.

The real question is how to use that information. "That's the whole secret," says Wilson, but it hasn't received much attention yet. "Now's the time to think about it holistically" before anyone mandates the use of RFID, she suggests.

New business models will evolve once there is an infrastructure to automatically access information associated with tags, says Armstrong.

Topics: Processors, Security

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