RFID 101

Nov. 7, 2004
by Tom SingerDespite recent developments (see cover story, "Generation gap"), the future of radio frequency identification (RFID) in the supply chain

by Tom Singer

Despite recent developments (see cover story, "Generation gap"), the future of radio frequency identification (RFID) in the supply chain is not entirely clear, but its potential impact is too big to be ignored. Logistics operations need to address the potential uses of RFID in a systematic manner. Given the technology's current state in the supply chain, this is not as easy as it sounds.

RFID does not present a single technological face to the world. Its elemental building blocks vary according to the applications-they are designed to address. One vendor's solution may or may not interoperate with another vendor's equipment and tags.

In some respects, RFID is similar to bar coding at a component level. An RFID tag can be equated to a bar code label — RFID obtains information from tags through a reader and antenna, while bar coding depends on a laser or CCD (charge-coupled device) scan.

But this analogy is an oversimplification. RFID-enabled applications can do things that bar code-based systems cannot. To understand what RFID can do in the supply chain, one needs to have a basic grasp of the components that make up an RFID application.

All automatic identification technologies require a medium to store information that will subsequently be retrieved by various applications for processing. RFID uses tags to electronically encode information. These tags come in a variety of sizes and designs, and there are numerous types — each tailored to meet specific application requirements.

All tags have two key components: an integrated circuit (IC) chip and an antenna. The chip and antenna can be laminated on plastic cards, encapsulated in protective housings or embedded in abel stock.

While some RFID chips are able to store significant amounts of information, most are designed to record a single identifier, much like a bar code. Tags also differ in their power sources and how they send/receive information to/from readers.

RFID tags can be classified as either active or passive. This classification denotes the tag's power source and how the tag sends information to readers. Active tags have their own internal transmitter powered by an onboard battery. Passive tags are powered by the external reader's signal. The reader's transmission energizes the tag's antenna, which in turn resonates back a corresponding signal.

Because they contain their own power source and transmitter, active tags generally support greater read distances than passive tags. But this added internal complexity means that they cost more.

RFID tags and readers are typically designed to transmit data on a fixed frequency band. Frequency impacts both read rate and distance. Lower frequency tags typically have shorter read distances and slower data transfer rates than higher frequency tags.

Passive tags are generally classified as one of four types (see chart on p. 58, "What's the frequency?"). Popular active tag frequencies range from 100 MHz to 1 GHz with maximum read ranges measured in hundreds of feet. Active tags can be found in trailer, intermodal container and railcar tracking applications. They are also used in toll collection systems.

An RFID reader or interrogator retrieves information stored on a tag through a radio frequency signal picked up by the reader's antenna. How this data signal is generated depends on the tag being read.

An active reader receives signals broadcast by the tag's internal RF transmitter. Some active tags broadcast their signals continuously without regard to whether there is a reader within receiving range. Other active tags require a prompt signal from a reader before broadcasting their data stream.

A passive reader transmits a signal strong enough to energize the target tag's antenna and circuitry. The tag resonates the signal back to the reader in a slightly modified form that is decoded to extract the data stream. Since they provide the energy for the tag's transmission, passive readers must have a considerably more powerful signal than active readers.

RFID readers play the same basic role as bar code scanners, although a bar code scanner generally captures information one bar code at a time. An RFID reader is capableof reading multiple tags within its transmission field.

RFID readers come in two basic configurations: mobile and fixed. Mobile readers are usually employed as peripheral devices on handheld or vehiclemounted terminals. As such, they can work in the same manner as tethered or integrated bar code scanners by capturing a single identifier as an associate moves an object.

Fixed readers may support one or more external antennas. The reader and antenna may also be contained in a single housing.

Information collected by RFID readers must be correctly interpreted before it's passed to an application system. An individual tag can respond multiple times to a reader's signal. When multiple tags are within the reader's transmission range, the result is a cacophony of responses that must be managed and processed in an orderly manner. This is the job of RFID software and middleware that resides on data capture devices or on specialized controllers and servers.

The exact function that RFID software performs varies according to the application that it is designed to support. At a basic level, RFID software manages readers and how they interact with tags. But much more can be involved than simply passing data between host applications and readers. Consider the scenario where a pallet of individually tagged cases is moved through a receiving door reader portal.

RFID software must control reader/tag communication in a manner that ensures each tag on the pallet is registered only once within an allotted timeframe.

Wal-Mart Stores Inc. and the U.S. Department of Defense RFID mandates have already sparked a new software market for RFID compliance solutions. These applications are typically designed to work with existing warehouse management modules and enterprise resource planning (ERP) systems. They basically allow tag identifiers to be systematically associated with carton and pallet contents. The result in an advanced shipping notice (ASN) that is transmitted to the trading partner.

Unless a supplier ships exclusively to Wal-Mart or the DoD, the compliance application must also account for customers that do not require RFID tags. One approach is to tag every shipment (i.e., "slap and ship"). While this method offers operational and systems simplicity, the extra cost of applying unnecessary tags can be overwhelming

Many suppliers will be faced with applying compliance tags at the back end of their shipping process. this can entail significant operational and material handling equipment flow changes that must balance efficiency and investment costs with compliance dictates.

Ultimately, each company and supply chain must determine their position on the RFID adoption curve. The exact timing of this adoption point depends on many variables. A company that moves too quickly or slowly can risk its competitive position. Some need to be early adopters, while others should wait until the technology fully matures. Most will fall somewhere in between.

Figuring out the when, where and how is not an easy proposition (see sidebar on p. 60, "Getting started with RFID"). But the stakes are too high not to try.

Tom Singer is a principal with Tompkins Associates (www.tompkinsinc.com). This article is excerpted from The Supply Chain Handbook, edited by James A. Tompkins, Ph.D., and Dale Harmelink (2004, Tompkins Press).

Getting started with RFID

Companies cannot afford to ignore radio frequency identification (RFID) in the supply chain. This doesn't mean that every logistics operation should aggressively pursue RFID applications. Like any emerging technology, there is a proper point in time for an organization to adopt the new tool. If you're at that point, here's a plan on how to proceed to the next step.

Build an RFID knowledge base. RFID is not a 'plug-and-play' technology. The first step in moving ahead with RFID is to develop a firm grasp of its components, benefits, challenges and applications. Since the technology is still evolving, this will be an on-going process. The trade and industry media, solution providers, industry organizations and EPCglobal (www.epcglobalinc.org) are good support sources.

Maintain a strategic outlook. Enterprises need to account for RFID in their strategic supply chain planning process. This doesn't mean that every organization needs to have a formal RFID plan. However, any logistics operation should assess RFID's potential impact on its strategic and tactical plans.

Understand that RFID is not just another form of bar coding. Any organization that only seeks to employ RFID in the same manner as bar codes risks missing out on the real benefits that the technology can generate. RFID should be implemented in conjunction with process redesign that leverages the technology's benefits and fully addresses its challenges. Be prepared to look at everything from packaging to facility layout because it can directly affect the success of an RFID rollout.

Recognize that bar codes and RFID will coexist. Perhaps RFID will eventually replace bar codes as the primary identifier in supply chain systems, but it is much more likely that RFID and bar codes will coexist for many years — if not indefinitely. An operation may use RFID for pallet and case movements, but still rely on bar codes for item transactions. A distributor receiving RFID tagged product from larger vendors may still be processing bar coded shipments from smaller suppliers. This dual approach will entail additional processing, hardware and software cost for years to come.

Make the proper investment in the design process. Implementing RFID is not a pure technology project. Because RFID has so many operational, product and systems touch points, it is essential that all impacted areas have representation on the design team. Give careful consideration to project scope so that each potential touch point is adequately addressed. Take the time and effort to thoroughly delineate each prospective benefit and challenge.

Have realistic expectations. RFID is still an evolving technology. In many ways it is still rough around the edges when it comes to supply chain applications. Any logistics operation contemplating an RFID project should be realistic in their assessment of the potential benefits, costs and difficulties. While this may seem obvious, it may not be so easy to follow as momentum for the technology grows. Any operation undertaking an RFID project should be prepared for many challenges.

Look not just at today, but toward tomorrow. RFID is a long-term investment proposition that should be evaluated in the context of the entire supply chain. Wal-Mart and other RFID leaders are not pushing into this new frontier because they simply want to implement flow-through receiving. They see many potential solutions that are not currently viable. They believe that the technology will continue to mature and cost dynamics improve in part because they are pushing the leading edge. Many early adopters do not see any real gain on their initial steps. They are positioning for far greater returns further down the road.

Be prepared to contend with more information. RFID and the EPC Network can provide an abundance of information down to the item level in near real time. While all this information will greatly enhance supply chain visibility and collaboration, it does present significant information systems challenges. Many supply chain operations are already awash with information. RFID promises to grow this data reservoir into an ocean. This growth will stress existing system infrastructures.

Go to Logistics Today's online Solution Selector at www.logisticstoday.com for a product directory of RFID, bar code systems and printers, and other data capture technologies.