Business Briefings

RFID

RFID is the use of a “tag” with a semiconductor to store information. These “tags” can be placed on items, cases or pallets. The “tag” information can be accessed and sometimes updated throughout the supply chain. RFID is believed to be the “next big thing” by many people within the logistics and supply chain industries allowing increased visibility of stock and enable accurate tracking of merchandise.

Photograph courtesy of Belgravium

What’s Involved?

A “tag” is a semi-conductor chip with memory processing capability and a transmitter connected to an antennae. There are two main types of “tag":

• Active tags (transponders) contain a battery that transmits data at regular intervals. These “tags” can be read at 100m and currently cost between £5 and £15. An active tag reader costs approximately £300 to £400.
• Passive tags need to be energised by a reader for data to be transmitted. The tags are cheaper at approximately 50p but the readers cost £3,000 to £6,000.

N.B. the above prices are based on information from the articles referenced below, but the costs are reducing and tag prices can be considerably cheaper for volume purchases.

Auto ID have developed an EPC Class 1 standard but most trials have used proprietary systems. EPC Global (run by EAN International and UCC) is now responsible for the new standard and is currently developing an EPC Class 2 standard. Software is also required to use the information retrieved from the “tag”.

Who is Using It?

• Scottish Courage started using Phillips low frequency Hitag RFID tags in 1998. Symbol handhelds are used to track containers and record information on the contents. They have reported a 50% decrease in container loss saving £4 million per year, cut unofficial sourcing of beer and improved cycle times.
• Exel, on behalf of House of Fraser, ran a trial to tag own-brand clothing from China. Passive tags were read for automatic receiving, inventory counting & store receiving.
• Exel ran a pilot for Selfridges using active RFID tags to track 120 temperature controlled containers. The tags are read at vehicle loading and Exel software automatically updated.
• Walmart imposed a deadline of January 2005 for the top 100 suppliers to provide RFID tags on cases and pallets using the EPC standard, the rest by 2006.
• M&S used Texas Instruments RFID tags in a trial, partly funded by the DTI, to track men's suits from manufacture to store. This involved one DC and selected stores. · M&S have used Texas Instruments high frequency tags to track 4 million trays and containers, replacing barcodes. Multiple tags can be read and written to at the same time so can be 83% faster than RF scanning.
• Unilever ran a trial in 2002, funded by the Home Office, to tag and trace 24,000 cases of Lynx deodorant through a Tibbett and Britten DC to Safeway stores.
• After an RFID trial Metro announced a roll out of the technology. From Nov 2004 “approximately” 100 suppliers were to tag pallets and cases based on the EPC standard.
• Woolworths have been tagging dollies and have reported improved accuracy in stock despatch and improved information integrity.

Why?

• Ability to track cases and pallets throughout the supply chain
• Can capture data faster than RF scanning
• Ability to write data to the tag as well as read information
• Readers do not require “line of sight”

• The cost of tags is reducing but currently the cost means this is still considered only suitable for high value item tracking or for vehicle/pallet/case tracking
• Ensure that you gain a benefit in your own operation not just “slap and ship” for a client
• There is currently no international standard so most trials are within “closed” supply chains
• Standards are now being agreed but these need to include the technical infrastructure as well as the data written to the tag
• There are currently consumer concerns on privacy and therefore any project should include a customer education program
• The technology is still in its infancy, therefore there is a risk with current implementations that the “final agreed standard” will differ to that installed
• Tracking at item level will result in a large volume of data, systems will need to be in place to store this data and be able to report only on the exceptions

References:

Penelope Ody, “Playing Tag”, Logistics Europe, Feb 2004

Louise Frampton, “RFID-A Four Letter Word”, Distribution, December 2003

“The Jurys Still Out”, Logistics Manager, April 2004

“The Story so Far: RFID Demystified”, Dr R Wilding & T.Delgado, Focus, April 2004

“The Data Avalanche”, Logistics Europe, October 2003

Stephen Tierney, Supply Chain Europe, March 2004

“Follow the RFID Leaders”, Brad Jarvis, Printronix, Logistics Europe, March 2004

“RFID Update”, Supply Chain Europe, Feb 2004