RFID Report

RFID Report examines the key developments taking place in radio-frequency identification.

By Robert Spiegel -- Supply Chain Management Review, 10/1/2005

News and Trends

RFID adoption is polarized

When it comes to implementing an RFID program, there seems to be small ground between those companies that are going all out to integrate RFID technology into supply chain and ERP systems and those that are doing the bare minimum to comply with the demands of their large retailer customers. The key to which direction is taken, according to one technology analyst, appears to relate directly to perceived return on investment. If a company sees a path to ROI, it's willing to invest in the necessary technology to push RFID data into business systems. If the company does not see a clear ROI path, it will implement on the cheap. "There are some companies that are using RFID strategically—they've become the poster child for the promised benefit of RFID," says Chantal Polsonetti, VP of manufacturing advisory services at ARC Advisory Group. "On the other side, you have companies trying to minimize the cost and impact of RFID."

Polsonetti notes that the litmus test for return on RFID investment is how the company treats inbound RFID data, the information that comes from the retailer showing proof of delivery. "Some retailers such as Wal-Mart are feeding back RFID data," says Polsonetti. "The ability to integrate that inbound data into ERP and WMS systems is the key to achieving ROI."

EPCglobal certifies hardware, accredits test centers

At its annual conference in Atlanta, industry group, the standards organization EPCglobal certified standards-compliant hardware products for commercial adoption. The aim is to ensure these products comply with EPCglobal technical standards for RFID readers. The companies receiving certification for readers that meet the EPCglobal UHF Gen 2 Air Interface Protocol include Alien Technology, Applied Wireless Devices, Impinj, Intermec Technologies, MaxID Group, Symbol Technologies, and ThingMagic.

In a separate action, EPCglobal accredited four testing facilities that received the first Performance Test Center Accreditation Marks. Accreditation indicates the sites use a standard set of performance test profiles to simulate real-world conditions in testing the reliability of end-user products that are tagged with RFID. The sites span the globe, including the Pacific RFID Performance Solutions in Taiwan; Kimberly-Clark's Auto-ID Test Center in Wisconsin; the METRO Group's Test Center in Germany; and University of Arkansas' RFID Research Center in Fayetteville.

Unisys says 2006 will be RFID inflection point

According to Unisys Global Visible Commerce experts in Blue Bell, Pa., companies in 2006 will move beyond the pilot phase in implementing RFID infrastructure and shift to adoption of RFID as a core business element. The consultants at Unisys also insist that those who say that RFID offers little return on investment are wrong. "RFID is the same as barcode technology 30 years ago," says Peter Regen, VP at Global Visible Commerce. "Today barcodes are on 87 percent of the items in the supermarket and the adoption rate of RFID is already faster," Regan says. "The key building blocks are in place and market drivers across industries will fuel adoption."

IBM announces open-standards RFID ecosystem

IBM is working to build momentum for an open-standards RFID ecosystem that includes partnerships and standards-based solutions designed to accelerate RFID adoption. The new solutions are based on IBM WebSphere RFID middleware and service supported by Service Oriented Architecture. The architecture offers a J2EE- and J2ME-based application environment that provides flexibility and integration possibilities designed to free companies of sizes from any single IT vendor. Three technology partners, OATSystems, TrueDemand Software, and MARCGlobal will offer applications running on IBM WebSphere middleware. IBM will also launch an RFID for Work in Process solution for manufacturers as well as an RFID Express for small and medium-sized businesses.

The goal is to help companies integrate RFID data and thus give them a chance at gaining a return on their RFID investments. "Beyond compliance and beyond supply chain applications, RFID can help manage work-in-process manufacturing," says Ann Breidenbach, IBM's director of sensor and actuator solutions. "Everyone started RFID by tagging pallets, but now people are using the technology to manage inventory and the manufacturing process." She notes that the middleware infrastructure gives companies the ability to manage the information, thus putting them on the road to efficiency savings.

VW implements active RFID for car location

Volkswagen Autostadt of Austria is using an active RFID system produced by Identec Solutions of Kelowna, British Columbia, to quickly locate cars in a holding lot that has more than 10,000 automobiles. The system also tracks the vehicles' progress through a pre-delivery system that includes washing, vacuuming, cleaning, and quality control. Every vehicle off the production line is equipped with an RFID tag that continues unique ID number and pre-delivery tasks. As the tasks are completed, the status is updated on the tag.

RFID Consortium taps company for patent licensing

The RFID Consortium has designated MPEG LA of Denver to administer a patent licensing arrangement for RFID technology. The goal is to create a technology environment in which companies can conveniently access RFID patents for manufacturers and end users. The membership of the consortium, which was created last summer, continues to grow. Members include Alien Technology, Applied Wireless ID, Avery Dennison, Moore Wallace, Symbol Technology, ThingMagic, Tyco, and Zebra Technologies.

HP and Philips push Gen 2 RFID technology

HP and Royal Philips Electronics are partnering to accelerate the adoption of Class 1 Gen 2 standards that allow a single tag to travel globally and still be read by most RFID readers. The goal of the partnership is to ensure that those adopting RFID will achieve a seamless migration from earlier RFID infrastructure while shifting to the global interoperability and increased performance capabilities that Gen 2 offers.

Sun partners with Axcess International technology on RFID

Sun Microsystems will integrate active RFID technology from Axcess International Inc. The Axcess technology will become part of the Sun Java System Software. The integration will extend Sun's RFID solutions beyond passive RFID supply chain applications and move it into the active RFID market.

Avery Dennison produces high-volume Gen 2 tag

Avery Dennison has started commercial production of AD-220, a high-volume Gen 2 RFID tag. The tag is designed as a high-performance general-purpose RFID tag for carton and pallet labeling applications. Avery executives say the tag is competitively priced and features a 96-bit read/write memory and an operating frequency of 902 to 928 MHz. The tag is small enough to fit into a 4″×½″ label.

Alien Technology gets tag prices down to 12.9 cents

Some in the retail industry believe that RFID will not become useful for individual consumer products until the price comes down to 10 cents per tag. Alien Technology is getting close. The company has introduced an EPC Class 1 RFID label priced at 12.9 cents. The price represents a 44 percent decrease in the price of 96-bit RFID labels that Alien has produced in the past year. The low price is available for quantities of 1 million or more labels. Alien executives note that the lower price was driven by market pressures on RFID costs. "Customers are expecting and demanding dramatic reductions in RFID tag costs so they can improve ROI for the RFID implementations," says Keith McDonald, SVP at Alien.

RFID Conferences

ID World

Nov. 2–4, 2005

Rome, Italy

Showcase of auto-ID technology

IDWorldOnline.com

Active RFID Summit USA

San Antonio, Nov. 15–16, 2005

Forum for users and developers

IDTechEx.com

Smart Labels USA 2006

Boston, March 28–29, 2005

Covers implementing RFID programs

IDTechEx.com