RADIO FREQUENCY IDENTIFICATION: Smart Tracking Solutions

Radio Frequency Identification (RFID) is an excellent alternative to bar
codes. If technological advancement and economies of scale bring down its cost
to match that of bar codes, it will revolutionize the way data collection is
done in most industries. This opens up a good business opportunity for solution
providers.

Try shop-lifting from the Big Bazaar or Lifestyle or any modern supermarket,
and you will surely end up behind bars. Thanks to Radio Frequency Identification
(RFID), the technology that monitors goods in big, but scarcely-manned, super
stores.

RFID is a system for identifying objects using radio frequencies. It can also
be explained as an automatic way to collect product, place, time or transaction
data quickly and easily without human intervention or error. It uses a chip, the
size of a grain, that sends a signal or reacts when it approaches a reader.

Many experts believe that it will be found in anything and everything by
2010, and it will revolutionize the supply chain, manufacturing and retail
efficiency.

APPLICATION OF RFID

Bar coding was a technology that revolutionized the way stores managed their
products to make checkout of goods faster. However, bar code needs to be seen
and scanned manually to collect data.

In the case of RFID, the tags can be scanned from anywhere between 1-inch to
100 feet. A simple RFID system comprises a reader (or interrogator), its
associated antenna and the transponders (tags/RFID cards) that carry
electronically programmed unique information.

RFID IN A NUTSHELL WHAT IT IS: An automatic way to collect product, place, time or transaction data quickly and easily without human intervention or error. HOW IT WORKS: Comprises a reader, antenna and transponders (tags/cards) that carry the data. The reader transmits a low-power radio signal, through its antenna, that the tag receives via its own antenna to power an integrated circuit (chip). Using the energy it gets from the signal when it enters the radio field, the tag will briefly converse with the reader for verification and the exchange of data. WHERE IT IS USED: As immobolizers in cars to prevent thefts, in toll collection, inventory control, building security, super markets and library systems WHO IS OFFERING IT: Wal-Mart recently told its top 100 suppliers to adopt RFID by 2005 or find someone else to supply for. In India, Infosys announced RFID-based solution enabling customers to harness the supply chain optimization that this technology provides.

RFID systems are also distinguished by their frequency ranges. Low-frequency
(30 KHz to 500 KHz) systems have short reading ranges and lower system costs.
They are most commonly used in security access, asset tracking, and animal
identification applications.

High-frequency (850 MHz to 950 MHz and 2.4 GHz to 2.5 GHz) systems, offering
long read ranges (greater than 90 feet) and high reading speeds, are used for
such applications as railroad car tracking and automated toll collection.
However, the higher performance of high-frequency RFID systems incurs higher
system costs.

OUT OF SIGHT, NOT OUT OF LINE

The significant advantage of all types of RFID systems is the non-contact,
non-line-of-sight nature of the technology. Because RFID tags need not be
"seen" to be read, they can be buried under a variety of things. RFID
tags can also be read in challenging circumstances at remarkable speeds, in most
cases responding in less than 100 milliseconds.

The read/write capability of an active RFID system is also a significant
advantage in interactive applications such as work-in-process or maintenance
tracking. Though it is a costlier technology (compared to bar codes), RFID has
become indispensable for a wide range of automated data collection and
identification applications that would not be possible otherwise.

DEVELOPMENT WORLDWIDE

While RFID has been around for decades, the cost of the technology and lack
of standards hampered its widespread adoption. All this is changing with the
efforts of the former Auto-ID Center at MIT, which was instrumental in the
evolution of the Electronic Product Code (EPC) family standards and the
formation of EPC Global, a cross-industry organization for the development of
industry driven standards for the EPC Network using RFID.

To further improve supply chain efficiencies and customer loyalty, Carrefour,
Intel Corporation, Metro Group and Tesco have formed a European working group to
accelerate the adoption of EPC technology. This will help improve inventory
control, which will lead to reduced operating costs and increased margins.
Members of the group are actively piloting EPC, the next generation bar code,
and RFID technologies in their supply chains.

The working group, called the EPC Retail Users Group of Europe, will
complement the efforts of current standards bodies, such as EPC Global, by
providing a forum for European retailers to identify and share best methods for
implementing EPC-based technologies, such as RFID readers, and business
processes.

Japan's Ministry of Economy, Trade and Industry and about 100 Japanese
companies has formed a consortium and launched a two-year project to develop
chips that cost as little as five cents for use in radio-frequency
identification tags.

Meanwhile, new technologies like use of ink jets to print semiconductors
using polymer materials are be developed, which will make RFID an affordable
solution in the near future. Such developments in RFID will continue to yield
larger memory capacities, wider reading ranges and faster processing.

FOR THE CHANNEL

RFID is yet another avenue for the channel to explore in the solutions space.
These players have to understand the technology, acquire the expertise and
deploy it for customers. An RFID solution requires significant experience since
the complexity of sending radio signals through a variety of package designs,
product elements and pallet configurations is a unique science.

In India, Infosys is identifying pilot projects with clients based on
strategy sessions on RFID technology and how best it can be applied to their
business processes. It hopes to provide cost reduction, improved customer
service and streamlined operations with the launch of RFID solution and
expertise.

Some technical experts believe that deploying RFID solutions that are
connected to business management will be straightforward plug and play. Still,
these solutions won't show their full potential until RFID has been widely
adopted.

FUTURE OF RFID

For now, it is very unlikely that the technology will ultimately replace bar
code. Even with the inevitable reduction in raw materials coupled with economies
of scale, the integrated circuit in an RF tag will never be as cost-effective as
a bar code label.

But as supply chain masters like Wal-Mart push RFID on their suppliers, who
in turn push it on their sub-suppliers, the cost will go down, and it will
become more common.

Experts feel that when an RFID chip costs the same amount as what it costs to
pick up an item and scan its bar code, then it will be found everywhere from
small businesses to large enterprises and from manufacturers to retailers.

Meanwhile, RFID will continue to grow in its established niches where bar
code or other optical technologies are not effective. If some standard
commonality is achieved - whereby RFID equipment from different manufacturers
can be used interchangeably - the market will very likely grow exponentially.

NELSON JOHNY