Creating Innovative Supply Chain Solutions

Radio Frequency Identification (RFID) is starting to play an increasingly important role in many sectors of commerce and industry. Manufacturers, retailers, logistics companies, and government agencies are starting to make substantial use of RFID technology to track, secure, and manage items in production and distribution as well as throughout the product lifecycle. Manufacturers and retailers benefit from RFID because it can make internal processes more efficient and improve supply chain responsiveness. Accordingly, the technology currently has the most impact in the CPG, retail, automotive, and pharmaceutical sectors. In this paper, we demystify the technology, describe the current standards and compliance environment, and provide insights into the capabilities and commercial applications of RFID.

Introducing RFID

Radio frequency identification (RFID) is fast becoming the most rapidly growing segment of Automatic Identification Data Collection (AIDC). Wherever the technology is introduced most applications show significant process improvements. While often regarded as a complementary, RFID overcomes several of the limitations of barcode technology. Because it is not an optical system, RFID does not need a line of sight between the reader and the RFID-tagged object. Depending on the system used, RFID can read many object tags virtually simultaneously and it can support multiple “read-write” operations so that the data encoded in a tag can be updated or changed during the tracking cycle. RFID uses ‘tags’ (or ‘transponders’) that electronically store and transmit information about the ‘tagged’ item. Tags are thin, low cost, wireless, real-time communication devices based on a microchip and an antenna. By using radio frequencies, RFID tags create a contactless system that is highly effective in manufacturing and environments where barcode labels are liable to damage or are simply ineffective. RFID microchips can be integrated in smart labeling that is easily affixed to items, packages and pallets, and can be built into packaging or products themselves to provide multiple read/write capabilities with reliable operation even in extremely harsh environments.

RFID has become the established identification method in a wide range of markets because of its ability to track and identify moving objects in warehousing, high-value manufacturing processes, and product supply chains. The technology is already commonplace in transportation where vehicles are equipped with RFID transponders that trigger automatic payment of motorway tolls. Other applications include:

• Identification of livestock and food to provide traceability
• Consumer Packaged Goods (CPG) labeling in the retail environment
• Authentication of drugs to prevent pharmaceutical counterfeiting
• Security passes for hands-free access control in offices and factories

In commerce, RFID technology is used mainly to monitor inventory and identify pallets, containers, vehicles, tools, and other assets. In industry, it is used to route materials, components, and sub-assemblies through production processes. In either environment, RFID can provide immediate and tangible benefits throughout the supply chain. Research indicates that RFID will complement rather than displace barcodes and that supply chain logistics will be the key growth sector over the coming years.