RFID gets new life from small-scale apps

The big picture for enterprise RFID is getting a lot smaller.

With large-scale, multi-company RFID deployments still in their infancy, a growing number of enterprises are discovering that automatic wireless identification systems can pay off in small-scale tactical applications within the four walls, or with just one or two partners.

RFID awareness blossomed a few years ago when retail giant Wal-Mart announced a plan to require its top product suppliers to add passive RFID tags to the shipping pallets or cases in which clothing, paper towels, books, coffeemakers and toys were shipped. So did the U.S. Department of Defense. These “open loop” systems were envisioned to span multiple locations and companies, and were touted as enabling organizations to see for the first time when and where tagged items were moving through end-to-end supply chain.

Click to see: Enterprise use of RFID

Typically these are passive tags that are activated when scanned by a tag reader. The tags use some of the energy from the reader’s transmission to send back the unique RFID number of the item, which is then passed on to application software and enterprise ERP systems.

“RFID technology development, standards work and awareness were prodded by these compliance initiatives," says Michael Liard, research director for RFID at ABI Research, a market research firm in Oyster Bay, N.Y. “They put RFID on the map in various vertical markets.”

But such systems are complex and costly, and only the biggest companies have the money to devote to them. Wal-Mart is still firmly committed to RFID.   Overall, standards progress is slow, but steady.

In the meantime, all that development work has opened up a host of new applications for RFID, covering a wide range of asset tracking and inventory management, in short anything where an automatic identification system can help solve very specific business problems for even a single enterprise, Liard says. Such focused, tactical applications are called “closed loop” systems.

“It’s about identifying your specific business processes and pain points, and then thinking through how RFID technology may be able to address those,” he says.

Shipper DHL has had a series of RFID pilots, working with clients to tag pallets or cases and enable RFID tracking from pickup to storage in DHL warehouses, and to final delivery. The company is expanding the range of applications under study, including tagging high-value shipments, sensitive data, perishables and extremely time critical shipments. These are the same kinds of  "taggable" assets that many other companies can consider on their own. The Minnesota Department of Corrections is even using RFID to track 1,300 inmates at one of its prisons.

A clothing boutique in downtown Columbus, Ohio, called the Industry Standard, applies item-level RFID tags to the 1,250 high-end denim items, hoodies and other fashion items aimed at young clientele. It speeds up checkout and guards against shoplifting. But RFID readers are also installed in the dressing rooms: when a customer hangs up the tagged clothes to try on, the reader records the items’ Electronic Product Code and displays relevant information on a touch-screen monitor in the cubicle, such as a biography of the clothes designer, or photos of celebrities wearing that item.