RFID: Where, When, How?

When talk of RFID implementation takes places the two names that come to mind
are Wal-Mart and TESCO, who are using this technology in their business
operations. There is yet another not-so publicized place in Germany where an
RFID enabled future store is currently under beta testing.

Metro Group's RFID Innovation Center is the testing and proving ground for
RFID technology of the future, successor to the Bar-Code technology. The dream
of ultimate automation is getting shape slowly but surely.

But though many people would like to know when the RFID revolution will take
place, there is no pre-designated date.

The RFID revolution will reach its peak with item-level RFID tagging
replacing the bar code technology, as the RFID label prices fall to levels as
low as one to five cents. This can happen when silicon-based RFID chips become
much cheaper or with the development of printable RFID labels.

TEST RUNS GOING ON

Developments in printable RFID labels is so important commercially, that no
one would like to talk about the technological breakthroughs openly till they
are able to patent the processes and exploit them commercially.

Item-level tagging is happening in a few pilot tests of high-price or
high-margin goods. Among the manufacturers who were to start using RFID in 2005,
only 3% are expected do so at this stage. Others will start putting the RFID
tags only on pallets.

You can see the chicken and egg story repeating here. A one to five cents
price target for RFID labels is possible only with very high volumes. Once the
high volume-low prices cycle gets going, it can pick up its own momentum. That's
why the mandates issued by giants like Wal-Mart, TESCO and the US Department of
Defense are important to give the initial push to commercialize the technology.

WHO'S TAKING INITIATIVE...... Gillette

Many companies have seen the RFID advantage and taken initiatives in
different areas. Gillette is piloting the use of smart tags with 'smart
shelves' fitted with tag readers to monitor inventories. The tagged razors
will talk to the shelves about when they came and left, making it easy for the
latter to keep count and talk to the store managers. If an abnormal quantity of
razors leave the shelf in one lot, the shelf can alert the manager about a
possible theft!

The smart tags will also track product movement from factory to supermarkets
to reduce shipment errors and reduce thefts. Error-free shipments can possibly
reduce inventory levels at the manufacturers by 5% to 25% .

... Hewlett-Packard

HP is taking a practical approach to RFID-based tracking. They are
simulating a system that will allow staff of a warehouse or retail outlet to
track the whereabouts of tagged items once they are logged in.

The tracking system consists mostly of readily available, relatively
inexpensive hardware like off-the-shelf RFID readers, Web cams and
location-aware nodes. Temperature, humidity and barometric pressure sensors can
be added to monitor environmental conditions through which the tagged products
pass.

This can be very important for perishable goods and healthcare products. An
indoor positioning system called LOCUS is used to locate items precisely. The
approach is to develop the system without having to reinvent everything.

... SAP

SAP has been ahead of other ERP vendors in working on large-scale RFID
pilots. It has an advantage, as it has a strong customer base in the retail,
consumer packaged goods and pharmaceutical industries. SAP, Intel, IBM and other
technology partners have worked together to deploy RFID systems at the 'Metro
Future Store' initiative.

PACKAGED SOLUTIONS

SAP offers a packaged RFID solution that includes a software event
management application module, middle ware and messaging software, to provide
its customers all the elements needed to take advantage of data provided by RFID
readers. The core of the system is SAP's Auto-ID infrastructure, a middle-ware
layer that has been developed over the past two years. It has an underlying
network messaging layer that routes data from RFID readers to applications like
inventory management system, warehouse management system or a data warehouse.

WebMethods, a provider of integration middle-ware, offers an RFID Starter
Pack, which includes software and services designed to help customers start on
their RFID project. It includes WebMethods Integration Server, WebMethods
Modeler, a graphical application for modeling how data will flow from RFID
readers to enterprise applications and databases, and a pilot kit that includes
pre-built data models based on specific business processes. The starter kit
includes a JDBC adapter for linking RFID readers to databases and one software
adapter for linking RFID data to an ERP application or a warehouse management
system.

Many companies launching an RFID pilot need a broad platform to take the raw
RFID data from readers and bring it into the enterprise application layer to
exploit it efficiently.

Ashok Dongre is an independent
consultant

Wipro's 'Concept Store' RFID Pilot

Wipro has been testing RFID in a retail store operated by the company on the
campus of its Bangalore headquarters, to acquire a better understanding of the
issues surrounding RFID deployments in a retail setting. This provides the
company with a great deal of first-hand experience regarding the kinds of issues
its retail customers will face with their own deployments.

Area covered: 1,000 square feet

Trials started: July 2004

Products covered in initial trials: Apparel

Aims of initial trials: To track purchase, theft of apparel and to
monitor stock

Knowledgebase developed: Requirements of middleware and software
integration, impact on existing business processes, selection of hardware,
placement of RFID reader antennae and deployment of smart shelves

Tags used: Read-only and Programmable Class 1 tags