Aust gets 'ute' of RFID

Several Australian retail and government organisations are currently trialling the technology for a possible deployment in Q3 or Q4 of this year. However, Loretto maintains that Australians should not be too concerned over a breach to their privacy.

"Consumers obviously have the right to understand what's going on and they have the right to choose to deactivate the tags or not," said Loretto. "However, the ones we're talking about are the ute version of RFID, its functional...it's a work horse. The ones described by the media as invading people's privacy are the Ferrari versions."

Loretto claims the RFID tags used in retail have a maximum scan distance of around 30 feet, with some having to be within 15 feet to detect any data.

He likens retail RFID tags to a "serialised bar code", saying it would be "very very difficult to invade someone's privacy".

However, Loretto says consumers should have the option to deactivate the tags following a retail purchase regardless of its capabilities. However, he says, many may prefer not to.

"In buying certain devices, it's better to keep the tags activated. Such as with laptops and electronic devices, it would bring down the costs and hassles in repair and maintenance as the tag can just be scanned rather than having to recall serial numbers," said Loretto.

According to Loretto the use of RFID technology globally has become inevitable.

"With companies it's not a question of whether or not you will do it, it's a question of when you will do it," he said. "In this country a lot of clients see it as an ability to compete on a whole new level."

Loretto says RFID technology has potential benefits for a wide variety of production and service industries, not just the retail market.

"Whether you sell something, make something, or move something RFID can have an impact," said Loretto. "RFID tags could be used in the production and distribution of pharmaceuticals; they could be used in defence organisations; in the tracking and maintaining of goods. There are loads and loads of different possibilities."

Loretto says there are four main groupings for the use of RFID tags in product distribution.

"Supply chain RFID use; service RFID uses such as automated payments and tollways; asset management RFID that could replace serial numbers on products; and spatially enabled enterprise RFID use, which would enable the identification pieces of equipment over large geographical areas," he said.

However, Loretto states that employing RFID technology can be expensive and unprofitable if not used correctly.

The annual cost of slap and ship RFID use, which involves marking a product after it has been manufactured and packaged, would be around US$10-12 million, according to Loretto, with a possible return of US$3 million in product maintenance.

However, Loretto says approaching RFID use in a "holistic" sense can present significant benefits to clients.

"Introducing RFID as early as possible in the life of a product, tagging it at the point of manufacture not the point of shipping so that goods do not need to be repacked and are labelled efficiently can present US$30 million in cost, but can return savings of anywhere from US$60 million to US$200 million," he said.

Loretto says the bulk of the savings returned from using RFID tags comes from more efficient storage of a product, better use of the supply, greater accuracy in supply-and-demand statistics and the ability to "plan a business more efficiently and effectively".

Retail RFID tags cost approximately US25-75 cents each. However, Loretto says that price will continue to come down over the next few years.