Radio Frequency Identification (RFID) has the potential to offer businesses significant benefits but it’s a technology which is not yet available as an off the shelf solution.

Locally, plenty of companies are showing interest in RFID and quite a few trials are going on, but full scale projects or rollouts are still thin on the ground. Working RFID projects such as Yakka Apparel Solutions’ innovative ordering system remain the exception rather than the rule, and this largely reflects the global picture.

Even in the United States, where RFID ‘mandates’ from the likes of supermarket giant Walmart are pushing the implementation of this technology in the same way that suppliers were forced to put barcodes on their product two decades ago, the technology is not expected to become mainstream for a couple of years yet.

A recent survey by AMR Research of 500 US manufacturing companies found that  61 percent of respondents planned to evaluate or pilot RFID this year, only 8 percent were actually using it.

The overwhelming majority of the AMR survey respondents mentioned difficulties in finding the Return on Investment (ROI) to justify their RFID spending, with 28 percent citing this specifically as their biggest obstacle to adoption. Uncertainty over standards was another key factor, especially for process manufacturers. Only 29 percent of respondents believed RFID standards have reached an appropriate level of maturity.

Back in New Zealand, Gary Hartley, manager for strategic initiatives at e-procurement organisation GS-1 says the local take up of RFID is at a similar stage to the US. There are a reasonable amount of RFID trials and pilots underway, but actual deployments are relatively rare.

“Although the technology has been around for some time there is still a lot to learn and there is quite a lot of trial and error involved,” warns Hartley.

Track and trace
But one area where Hartley says there will be early adoption of RFID locally is in the primary produce sector.

He says this is because export-driven food related companies in particular are facing a growing requirement from Europe and elsewhere to be able to track and trace produce they supply.

For example, a working group at Meat and Wool New Zealand is recommending that an Animal ID and traceability programme for cattle and deer starts as a voluntary system from 1 October 2006 and moves to a mandatory system on October 1st of the following year.

“If something goes wrong with a shipment from New Zealand they’ll need to be able to identify an individual animal and even the pasture it was grazing on,” says Hartley.

David Wright, business development manager at Auckland-based automation company System Controls Limited, agrees that the local livestock industry in particular lends itself to RFID.

System Controls has completed around five RFID projects, and several more are in the pipeline. Two of the completed projects were in the livestock industry where RFID is being used as a tool to streamline automation processes. RFID tags enable carcasses to be identified by passive readers and they overcome the orientation problems of identifying carcasses with barcodes.

“All of a sudden you know what everything this, and you know what’s coming along the production line,” Wright explains.

Labour savings
Automation has a couple of special advantages in the meat industry, according to Wright. By eliminating human contact, bacteria counts are reduced, which means the product has a longer shelf life. But a much more significant benefit of RFID-enabled automation is that it is freeing up labour resources in an industry that is facing severe shortages of both skilled and unskilled staff.

“It’s hard to entice people into this industry and so there’s an aging workforce. When you walk around these places everyone’s 45 plus,” says Wright.

In one project 17 low-grade jobs were saved in a single production line allowing the staff to be re-assigned to other tasks.

Wright’s advice to CEOs who are wondering whether RFID will benefit their companies is to “set an R & D budget and have a dabble.”

“Identify the outcome you want and work towards it. But don’t expect to ring up and order something and have it working straight away, it’s not going to happen.”

Wright says some of the projects System Controls has worked on have taken three to five years to come to fruition and testing alone can take a year in some cases. But this long development time is usually the result of physical problems rather than problems with the technology.

At a meat processing plant for example the RFID tags will typically have to withstand a temperature range from –20 to 90 degrees C, as well highly caustic environments. So far, Wright says all of System Controls’ RFID projects have been ‘closed loop’ applications – that is the tags are recycled within the process – but he says one major project presently at the design stage will involve RFID labels being read “by the outside world.”

‘When,’ not ‘if’
While the take up of RFID technology has so far occurred at a relatively slow pace, most industry observers agree that it is only a question of ‘when’ and not ‘if’ the technology takes off. This is leading more vendors to enter the RFID arena, which in turn will help propel the technology into the mainstream as more hardware and software options become available to developers and users.

For example Microsoft has recently entered the market by creating RFID software for postal and courier applications. Microsoft has provided middleware and a tie-in to its MSN Messenger instant messaging service in a package tracking application to allow individuals and businesses to check the status of packages in transit. 

PDA manufacturers are also beginning to offer RFID options on handheld devices. For example Intermec has recently launched the IP4 Intellitag reader, an accessory handle which can be attached to its 700 Series Colour mobile computers to provide a multi-protocol RFID capability. Although RFID technology is normally associated with fixed readers that work without human intervention, Intermec points out there is always a need for exception-based scanning and the IP4 could be used when it’s more practical to bring the read/write device to the tagged object rather than moving tagged objects passed a fixed reader.

Campbell Scott at local supply chain specialist Walker Datavision, a long established local reseller of Intermec equipment, says the IP4 could be used in a variety of warehousing, logistics, manufacturing applications.

According to Scott, Walker Datavision is talking to a number of its customers about RFID pilots in these areas but it has not completed any projects yet.

“We are just beginning to see developers get their heads around technical requirements and the early uptake of RFID will probably come from companies looking to use it inside their own four walls, typically inside a proprietary closed loop,” he says.

“There’s an expectation in that first cut that the tag will not be read anywhere outside the company and the application could be something as simple as expediting the unloading of a vehicle.”

Barcoding and labelling company Saito is another company which is entering the RFID arena by inviting its customers to participate in pilot projects. Saito is also offering a RFID developers’ kit, the CL408e, which consists of a passive RFID reader, tags and other components which are necessary to set up a closed loop RFID application.

Saito’s Dean Prosser says the company is receiving a lot of enquiries about RFID, and is now involved in a couple of pilot projects, but full-scale rollouts are a long way off.

He says the price of RFID tags is coming down but it is important to look at the application as whole rather than to become fixated on the cost of individual tags, and users should also ask what benefit RFID provides above other technologies.

November 2005

Portable RFID

Intermec’s  IP4 Intellitag reader is an accessory handle which adds multi-protocol RFID capability to Intermec’s 700 Series Colour mobile computers.

While unmanned RFID data capture solutions are designed to eliminate human intervention and line of sight restrictions in data collection applications, Intermec says there is always a need for exception-based scanning, and the IP4 and 700 Series will deliver a mobile RFID solution for when it is more practical to bring the read/write device to the tagged object rather than moving tagged objects passed a fixed reader.