New technology may lower the cost of RFID

March 1, 2003
RFID is buzzing with developments and announcements. One of the latest is using "conductive inks" to create the antennas needed in RFID tags. By printing

RFID is buzzing with developments and announcements. One of the latest is using "conductive inks" to create the antennas needed in RFID tags. By printing antennas, instead of making hardware versions, the costs of tags could drop significantly.

Conductive inks are specially prepared suspensions of finely dispersed conductive particles in a variety of resin systems. The most common chemicals used are silver and/or carbon. The inks are used to produce conductive patterns on flexible and rigid substrates. Flint Inc. is one of the companies involved in the manufacture of these inks and their subsequent use in RFID technology. Below is an interview with Jim Rohrkemper, vp Emerging Business Segments conducted by Perry Trunick, editor and associate publisher, Transportation and Distribution.

Q:I'm looking at trends in bar coding and got a call from your PR about the development of your products. I'd like to position conductive inks relative to bar coding and RFID.

A: Well, first of all, where we would play in this whole area is, to make an RFID device, there are a couple of pretty standard things that are required. The first one is some sort of chip that handles the intelligence and has some memory and storage. Then, there needs to be an antenna that the chip connects to so that a transmitter or receiver can interact with the chip. Another aspect is those two have to be placed on something, so there must be some sort of a form factor.

Each one of these three major elements has a cost associated with it. Where we believe we can bring significant cost improvements is in the antenna. Right now the antennas are manufactured using either a screen process or using a foil etched and stamped process. Where we think we can contribute to this low cost opportunity is to print the antenna using traditional printing processes in conductive inks. By doing that, you can dramatically lower the cost of producing those antennas. And since the antenna is a major element of the total RFID device, then you can bring down the cost of RFID. But this whole concept of low cost RFID is being driven by the MIT Auto ID Center. Are you familiar with that?


A:OK, well their vision is to have the next bar code. The future, they believe, is that over time bar code technology will be replaced by RFID technology and there will be some tremendous benefits to that. But those benefits will revolve around the ability to get down to the item level. Right now bar coding can get down to the SKU level, but it really can't get down to the item level. So, if I had a thousand jars of peanut butter, they’re all going to have the same SKU number as far as bar coding is concerned. And I would have to identify and read each one of those 1,000 bar codes on the peanut butter jars one at a time.

: So they're saying that by exciting the RFID tags on the 1,000 peanut butter jars on a pallet you would know that there are in fact 1,000 distinct peanut butter jars of SKU number 123 on that pallet.

A: Each one of them would have a unique license plate. Not only would you be able to immediately read all 1,000 at a time, you’d also be able to know the fact that each one of those 1,000 can be tracked uniquely.

For retail, for distribution, for freight and transportation — in the supply chain it can have an enormous impact because you can get down to that next level, the lowest level of being able to track and trace items.

Inherently, RFID has many advantages over bar code. There's no line of sight requirement. You can read multiple RFID devices at once. Thus, you can read every RFID tag that’s in that truck coming in or going out. And again, it would lower supply chain costs, which would ripple through the supply chain. As you get to warehouses and distribution centers, as you take pallets of things and then bring it down to the case, and take those cases and open them up to meet a specific customer's order, the ability to track every single item as it’s broken down from pallet to case to item level is really where a tremendous amount of supply chain costs are incurred today. RFID technology has the potential to take out a lot of cost out of the supply chain because it just can improve the productivity and we all know what bar code did in terms of improving supply chain and warehouse management and inventory management. But RFID has the potential to take it orders of magnitude further.

Q: It's interesting as I think about issues like counterfeiting, breaking packs, the ability to track an item back to origin.

A: You're exactly right. It you knew that this pallet contained 40 cases of something and, not only did you read the RFID on the pallet but on the 40 cases and then at destination X, you know that between point A and point X, there were five cases that were diverted somewhere. Therefore you can at least start pinning down and honing in on where this diversion is taking place or whether there is theft or counterfeiting going on. And that’s a big problem with distribution today.

You know the other area is with theft out of the retail store. You could have some intelligence in the software, let's say on a point of purchase display of Gilette Mach III razor blades. If someone were to take three packs off the shelf, that would be OK because that might constitute a normal buying pattern. But if someone would grab 10 off that shelf that would trip a silent alarm or an audible alarm because that would be an abnormal purchase habit and it might allow someone to keep that theft from happening.

There's just a lot of different applications of RFID and of course the problem right now is that RFID technology is just too expensive to put on individual units. Over time, that's really where MIT is trying to help; in establishing the standards so that the problem of quickly getting RFID deployed is going to be a little easier. It took 25 years to get bar code ubiquitously everywhere and one of the reasons I understand is that it took a while for standards to be adopted and accepted.

Q: I've been writing about bar codes about that long and you're right.

A: I hope RFID doesn't take 25 years. We certainly think that with an MIT, some of the influential members of that group, which is pretty much all of the major consumer goods companies and major retail companies, all trying to drive this for all of the reasons and benefits that they see, that perhaps RFID technology will come out in two years, five years, ten years as a way of replacing bar code technology. I think both will co-exist for a time, so there’ll be this period of transition from one technology to the other. But our goal is that we can contribute toward the low cost. And really, by low cost, we're hearing that defined as anything that will be able to produce a completed RFID tag at about 10 cents or less. That's by the end of 2003. Hopefully, by the end of 2005 they can get down to 5 cents. Maybe by 2007, we can get under a penny. So we see it evolving. Right now, most of the stuff is between 20 and 50 cents, making it affordable only on pallets, maybe cases. But as that price starts to get below a dime and than a nickel and then a penny, it will start to propagate on everything.

Q: I can see tremendous potential for this type of thing. Now no one would stack product with an earlier expiration date on the inside of a pallet and put the longer expiration data on the outside, visible layer, but you could certainly detect that or mixed lot numbers with this.

A: We're pretty excited about it. Again, the other nice thing is that ink has been around for a long time. Printing presses and like technology has been around for hundreds of years. And most of the printing processes are well understood and mature. So there’s a lot of companies that have printing presses, that are printers today and they can add this to their capabilities to enable their packages or documents or whatever you might think of to also have RFID technology in the future. So, it would not require a whole new industry to be formed as far as manufacturing. There's already a pretty sophisticated capacity all over the world of printers with printing presses that could potentially be used to print antennas on this technology. Now again, there's more than just the antenna required. But that is a major component, so that infrastructure already exists.

Q: It strikes me that there are already some specialized printers accustomed to this type of thing like check printers who use magnetic ink. What made the bar code so easy to adopt once there were some standards set was the fact that if you could hit certain quality printing standards you could produce readable bar code anywhere.

Do you have any contacts at the MIT group?

A: You can get a lot off the MIT Web page. In fact, there's white papers on there that really get into detail about the impact of RFID in the supply chain, the retail supply chain, in the distributor arena and in the warehouse area. They hired Accenture and IBM business consulting services to prepare the business case. Because all of these MIT Auto ID members are big companies, if they buy, they’re going to drive this much faster. As a result, MIT knew that not only did they have to try and help in developing the technology and the standards but also help in getting these large companies to understand the business benefits.

We hope that we’re getting in on the ground floor of this. We feel that we have a fairly good understanding of what the issues are, what the technologies are. But we also understand the potential of RFID. So we’re really excited about it and again we’ve made a commitment to build a new business out of conductive and advanced inks. RFID is one of a number of emerging markets which we see printing processes as being a manufacturing method, a new manufacturing method of printing electronics, intelligent packaging types of applications, as well as RFID. So we're pretty excited.