The rush to RFID

In an airport at Frankfurt, Germany, a maintenance worker crawls through the cramped ventilation system, wearing a small device that reads data from chips positioned throughout the system to verify that he’s done his job. At a U.S. theme park, a teenager on a waterslide wears a special wristband with an embedded chip that will remember how many rides he has taken, no matter how wet he gets. And at a large drug company’s warehouse, a shipment of the regulated narcotic OxyContin gets tagged with chips to track its route, and discourage theft and counterfeiting.

What do all these chips have in common? Each contains special RFID (radio frequency identification) technology, which enables a device to read data stored on the chips at a distance, without line-of-sight scanning or physical contact.

After years of use in applications such as vehicle tracking, factory automation, and anti-theft systems, RFID is suddenly poised to break into the same league as the transistor and the microprocessor. The cost of RFID tags has dropped from several dollars to 30 cents per tag or less, making RFID increasingly cost-effective for much higher volume applications, especially in the supply chain. Driven by recent RFID mandates from several large buyers including Wal-Mart, Target, Albertsons, and the U.S. Department of Defense, much of the corporate world is scrambling to test and roll out pilots of RFID technology.

“There’s a lot of hype around RFID and maybe a little bit of herd mentality,” says Jon Brendsel, VeriSign’s director of electronic product code network services. “Lots of end-users don’t know why they need to do it, but they know they need to do it.”

The list of potential RFID benefits is seemingly endless: greater visibility and product velocity across the supply chain, better inventory management, automatic replenishment, reduced invoice reconciliation and labor costs on the receiving dock, easier product tracing and recalls, and reduced product tampering, theft, and counterfeiting. But to get these benefits, industries will have to navigate a host of thorny challenges involving hardware and software, standards, and even business models.

The Physics Test

The first set of issues facing RFID deployments is the physics of getting RFID readers to read tags accurately in real-world environments such as warehouses. Current success rates for tag readings run as low as 80 percent, explains Kara Romanow, a research director at AMR Research. “The tags just fail. The quality’s just not there yet,” she says. RFID readers have a hard time detecting the tags through interference from metal, liquid, nylon conveyor belts, and dense materials such as frozen meat and chicken parts.

Furthermore, as with other wireless technologies, the devil is in the details of reader infrastructure layouts and potential conflicts with other sources of wireless transmissions. “Every site’s a little different. You can’t just throw up antennae; there’s a tuning aspect,” says Tig Gilliam, a partner at IBM Business Consulting Services. “This is dirty fingernail stuff.”

To further complicate matters, there are two types of tags: active tags, which contain a battery and can transmit further but have a shorter life span; and passive, which draw power from the reader and so have a shorter range but can live forever. And there are also two competing standards for transmission protocols, 13.56MHz and UHF, each regulated differently and with different effective ranges and abilities to avoid interference.