When we first started working in RFID a little over a decade ago, typical questions from supply chain managers were: When should we replace barcodes with RFID tags? When will tags be cheap enough to use? Should we use high-frequency (HF) or ultra-high-frequency (UHF) technology? At the time, we had no good answers and only a vague idea that the questions were wrong.
Today we know RFID can be a powerful tool for supply chain management, regardless of tag and infrastructure cost, if used intelligently in concert with old and new optical ID technologies. RFID technology is a relatively recent addition to Auto-ID technologies, some of which have been around for nearly 50 years. In 1952, the first barcode patent was issued. In 1967, the Association of American Railroads standardized color barcodes for numbering and recognizing railcars, leading to the first big commercial rollout of auto-ID technology.
In 1973, the National Association of Food Chains selected IBM’s Universal Product Code (UPC) as the standard for ID’ing consumer goods. A year later, the first barcode-enabled retail transaction signaled the start of the retail supply chain’s UPC code adoption. Aldi, Germany’s largest retailer, went to barcode technology for check-out as late as 2004. By comparison, today’s supply chain RFID technology was standardized in 2005.
RFID tags have capabilities beyond optical auto-ID technologies like linear barcodes. RFID tags are readable and writable, can carry multiple megabytes of programmable memory and can be read at varying distances. Furthermore, the same reader can read a large population of tags simultaneously.
However, RFID tags’ core functionality is the identification of an object with a unique number or pointer. A programmed reader knows what to do with the ID of a tag and where to get relevant information. There is no need to encode anything else on the tag, as long as there is a back-end system that delivers information based on the ID.
More than 30 different formats of linear (1D) barcodes are in use. The UPC code – the most widely used – includes 12 numeric digits in human-readable numbers and machine-readable bars. UPC codes offer a trillion unique numbers, enough to identify every product category in the chain, but not enough to serialize every product.
1D barcodes cost less than a penny to print using standard technology and don’t require much data management. Packaging or labels can carry codes at virtually no cost. Laser scanning technology to read linear barcodes has become sophisticated. Solutions range from small handheld scanners to long-range forklift-mounted scanners that read codes on warehouse ceilings.
Linear barcodes are the backbone auto-ID technology of supply chain management and retail check-out. They are cheap, versatile and simple. Any object can carry a linear barcode, which makes it the winning technology to identify product categories.
Matrix (2D) barcodes come in different formats. Popular formats include QR Codes for smartphone applications and the PDF417 for ticketing and transportation. Matrix barcodes are superior to linear in terms of readability by camera technology. Smartphones with a fixed-focus camera have an easier time reading a 2D barcode. QR codes are designed to point to a web URL. Anyone can issue and print QR codes and establish a repository of information related to the object.
Today, few products and goods are equipped with matrix barcodes from manufacturing. A supply chain user needs to create the associated codes.
NFC RFID technology
Near Field Communication (NFC) was created for near-field encrypted RFID communication for payment and other secure transactions. NFC allows communication between a reader and a tag, and between two readers.
NFC was created with cell phones in mind. Smartphone makers – like Nokia and Google – are offering phones with an NFC interface – but Apple isn’t yet offering NFC-capable devices.
Users of NFC-enabled smartphones can integrate NFC tags with their phones and/or communicate over NFC to other phones and infrastructure. Transactions or the use of transportation tickets can be executed from the smartphone, eliminating the need for plastic cards and paper tickets.
The ability to securely authenticate tags and objects is a welcome feature for certain supply chain articles, in particular pharmaceuticals and high-value brands. However, the small read range of NFC solutions limits their applicability to supply chain applications.
UHF RFID technology
Passive UHF RFID technology is a newer RFID and identification technology. In 1999, the MIT Auto-ID center was founded with the agenda of standardizing RFID for use in supply chain. The research consortium zoomed in on UHF technology as the most likely candidate to realize efficient supply chain tracking.
The center released the Electronic Product Code (EPC) format around 2002. EPC Global, the Auto-ID center’s follow-up organization, oversaw the EPC Gen2 air-interface protocol release in 2005. EPC Gen2 is a great success story in technology standardization.
Almost all new RFID projects are based on the standard; hundreds of vendors offer tag and reader solutions. Over the last decade, a lot of money was invested in UHF, ergo it improved and became a powerful tool for supply chain applications. EPC Gen2 offers two key benefits over older technology: passive tags can be read from as far as 10 meters, and up to 600 tags can be scanned at the same time.
Passive UHF RFID tags are no longer expensive, costing less than 10 cents. However, tags will never be free, like barcodes. Reader infrastructure is coming down in price and available in many forms, from handheld solutions to portals.
Unfortunately, reader infrastructure is only deployed in commercial installations. Standard consumer devices will not likely include a UHF RFID interface any time soon.
What to do?
What does this mean for supply chain managers? In almost all applications, the most efficient systems will use a combination of the above technologies.
Item-level tracking of low-value individual items continues to best be implemented using barcode technologies. However, it makes sense to use UHF RFID for product containers, like totes, roll-cages and palettes. If containers and tags are reusable, projects become easier to justify and generate positive ROI within reasonable time frames.
Bar-coded cartons of product can be associated with a UHF-RFID-enabled palette. The association step is critical but can be accomplished cost-effectively using a commercial handheld terminal including both a barcode scan engine and an RFID reader module.
Item-level tagging of complex, medium- to high-value SKU’s is best implemented with UHF. Many apparel chains have such systems, mainly for in-store inventory. Managers can get counts on merchandise in-store, including information on size and color. This approach avoids out-of-stock situations and increases sales.
To establish traceability of an item and leverage personnel with access to typical smartphones, 2D barcodes and possibly NFC tags are the best choice. At the container level, those can be added to the UHF-RFID tag.
Since most Auto-ID system costs are related to back-end software and process change within an enterprise, it is wise to use as many Auto-ID representations as can fit on tagged assets. The more modes of identification, the more likely a particular application scenario will be supportable in the future.