today's RFID newsRadio frequency ID set to revolutionise the supply chain
Posted Fri, 13 Aug 2004
The cost of small electromagnetic strips and disks is about to revolutionise automation of the entire logistics, warehousing and distribution value chain, from customer to supplier to partner and back again, says MARK LILJE, MD at mobile solutions business RangeGate.
Radio frequency identification (RFID) will give customers a number of benefits that will lead to the global market of shipments expanding from over $800 million to $2,65 billion by 2005.
The benefits include increased productivity, improved profitability, optimum inventory control, the ability to identify whereabouts of goods, reduced shrinkage, improved delivery speeds and more reliable deliveries. Overall companies can expect easier synchronisation in the supply, manufacturing and distribution chains, that ties up less capital in goods, improves flexibility, reduces the workforce, allows fewer faults and improves security.
Although RFID consumer applications have proven complex to develop, they are amazingly simple in concept. Label goods with an electromagnetic transponder containing basic information, run them within about four metres of a sensing device that does not require line of sight, such as current barcode equipment does, and a trolley-load of goods can be scanned in fractions of a second.
The applications are proving endless as research continues. A Spanish retail outlet will install an RFID solution in one of Madrid’s busiest shopping streets. Smart labels will be attached to goods during manufacture or in the warehouse and will stay with them through the supply chain. Items placed on shelves will be scanned for inventory.
Shelf readers will constantly scan expensive items and raise an alarm if they are stolen. All items will be scanned simultaneously when reaching the till and information can be stored for warranty purposes.
A transcontinental clothing rental company has selected an RFID solution that includes several million smart labels. That business will know where its garments are at any time, will benefit from increased productivity and profitability and reduced stock loss.
A Swedish solution operating in the 2,45GHz range powers its transponders or smart labels with a short burst of radio energy that powers them to feed a receiver pre-programmed information. Because that system minimises the amount of information transponders contain, it minimises their cost.
While those solutions are all forward-looking RFID technology has been used for many years, such as in automated tollbooth systems for cars abroad. Locally, security companies have capitalised on the technology for remote gate access, where users pass a magnetic disk close to a reader that identifies them and opens a gate.
The primary change in RFID technology in recent years is the cost of the transponder, previously an inhibiting factor, and the range and reliability of the reader. With the cost of transponders continuing to drop, the number of applications for the system increases, and economies of scale continue to improve. While market shipments are currently a reported 6 000 million units a year, this is set to increase by 24% per annum according to research firm Venture Development Corporation.
The cost of RFID solutions has changed dramatically: chipless transponders have been developed that, when interrogated, provide ID and other basic information, and their deployment has surged from 2,5% to over 30%, according to IDTechEx, an independent RFID research firm. Price reductions have been in the order of a third to two thirds, and some industry experts suggest that by 2010 RF tags or transponders will cost less than 1c.
With the continued decline of price and ongoing research finding new uses and improving reading technology, RFID will revolutionise the supply chain and any logistics, warehouse and distribution business that fails to heed the signs will lose business and market share.