Latest Party Gossip on Automatic Identification

May 1, 2002
Auto ID continues to improve in cost and utility for tracking inventory.

If this were a cocktail party, I might say “stop me if you’ve heard this before ...” But it’s not, so I won’t. In fact, don’t stop me if you think you’ve heard this before. It really is a different story. Really.

The hot news that seems to herald the arrival of radio frequency identification (RFID) for item management is that a major U.K. retailer has replaced bar codes with RFID “smart labels” to identify and track totes of refrigerated food products.

Smart labels, as you’ll recall, are the inexpensive RFID tags in the UHF range (typically 13.56 MHz or 14.4 MHz) that are usually embedded in a self-adhesive label (although other configurations are available). Smart labels, in fact, are widely viewed (at least by those in the RFID community) as being the next, and most logical, evolutionary step in automatic identification and data collection (AIDC) applications.

The advantages to RFID have been clear for decades. RFID does not require line-of-sight, can read multiple tags (even inside packaging) nearly instantaneously, and requires no operator intervention at all. What’s more, fixed-location RFID readers are much less expensive than fixed-location bar code scanners.

The sticking point has always been the cost of the tags. While smart labels cost only a fraction of what earlier generations of RFID tags cost (currently less than 50 cents and even less than that in quantity), they’re still not quite what one might consider “disposable.” And “disposability” has long been considered the key to item tracking applications.

Conventional wisdom looked at the overall system cost and often balanced the number of tags against the number of readers. Need lots of tags and few readers? Go with bar code. Need lots of readers and few tags? Go with RFID. Of course, reusability was also included in the equation. If the tag was recycled within a facility or even between trading partners, then the cost-per-use was calculated.

This equation overlooks the fact that bar codes can also be reused within a facility or among trading partners to identify reusable totes or pallets. Of course, you might need a more durable (read: expensive) label, which might cost 50 cents or more.

Now, let’s pause to reflect for a moment. Our “cheap” bar code label suddenly costs as much as — or more than — an “expensive” smart label. So even if with lots and lots of totes and pallets to identify, RFID might be cheaper because the readers are less expensive. And RFID has all those other advantages as well.

Of course, the problem with conventional wisdom is that it’s ... well ... conventional. It overlooks one of RFID’s real advantages: speed.

To uniquely identify every tote on a pallet with a bar code label, first you have to load the pallet so that the labels face out, then hand scan each one or invest in a very expensive tunnel scanner. Or you could implement a system to scan each tote as it goes onto the pallet, then scan the pallet. But each of these scenarios takes time.

Considering that a whole pallet of RFID tags can be read almost instantaneously and that orientation of the tag is less critical, it’s suddenly obvious that RFID offers real-time savings.

For this retailer, orders go out every morning by 7:30. Since freshness is a concern, there’s a definite “crunch” time in assembling, staging and loading shipments. This is one of the primary reasons the RFID system was implemented.

The retailer calculates that the RFID system will give an extra hour to prepare shipments — which gives more time to perform quality assurance checks on each tote.

All this is great. It’s the sort of thing we in the AIDC industry love to read (and write) about because it shows the power of AIDC.

But it’s hardly “big news.” RFID tags have been used to track returnable containers for years. And this is still a far cry from the item-level supply chain visibility we’re all waiting for.

So, although it might seem that RFID tags are “competing” with bar codes here, smart labels are really competing more against other RFID technologies. The “news” is that smart labels are making RFID more cost-effective for more of these applications.

Bert Moore, contributing editor, [email protected]

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