Understanding RFID in Your Business

We live in a great big world that is driven by a lot of business in it, and there are a lot of ways that enable the integration of technology into the operational asset of a company so that work can be done more efficiently. Farhan Masood is the CEO of a company called Solo Smart which, amongst other things, develops innovative technological solutions and we contacted him to talk a bit more about a technology that is being used increasingly for tagging communications and identification. RFID, or Radio Frequency Identification, according to Wikipedia.com, is an automatic identification method, which relies on storing and remote retrieval of data using devices called RFID tags or transponders.

How come RFID hasn't taken off in Pakistan?

Better late then never but not really true. May not at a mass level but there are quite a few RFID projects on experimental basis that had been initiated in Pakistan by technology enthusiasts. On government scale, we can name ePassport at NADRA and eTAG by National Highway Authority as pretty good initiatives. These fascinating projects are suffering due to the negligence and lack of vision of the project owners who are either too busy or already cashed its commercial aspect in terms of deployment. Proper infrastructure to back up has not been provided and neither the projects been advertised to educate people what benefits they can gain by using the RFID. ePassports are currently being issued using a 2D Barcode and only a few ePassports carry RFID chips being used for experimental basis.

On private scale the RFID is mainly used in the time and attendance management purposes in Pakistan. This is one area where RFID implementation can be seen spreading at a high speed. Although advances in radio frequency identification technology have enabled the early adoption in other commercial applications like supply chain management, logistics and transportation as well but I believe that although RFID has an advantage over plain vanilla bar-coding in logistics, it will take a while for it to become mainstream.

We know what makes RFID so useful. What makes RFID so expensive?

Expensive is a word that's frequently associated with RFID, most commonly regarding the tags, but 'unwieldy' - well, there is no doubt some that might agree, but any major technology investment implies change, which can indeed be painful. Could a move towards RFID be complex? Yes. Would it imply process change? Yes. Is it necessarily 'unwieldy'? Not so sure. Unwieldy tends to imply little long term benefit, and just a headache to implement. I think RFID ultimately offers significantly more than that.

RFID is expensive although it can provide good ROI if used in the right business model. Since RFID has a wide spectrum of usage among different industries. I would share the issues with a few sample sectors.

At the head of those challenges is the reality that Retail Industry operates on 'razor-thin margins' and so view technology investments as a cost that has uncertain potential for business benefit. That is not to say that that potential won't bear fruit, but sometimes retailers need to be dragged kicking and screaming to make it. Their perception that RFID is 'expensive, unwieldy and of uncertain business benefit' is one of the biggest challenges to retail RFID success.

I think what needs to happen, is people need to start thinking 'outside the box' so to speak.

If you look at the health care industry you'll find that loss of simple medical equipment, beds, wheelchairs etc is huge. They have no way to track where they are, where they were, or who of their employees used them last.

Also ROI to many businesses can come in the form of more than just 'money saved or gained'. It can also be Time Saved and Productivity Increased.

How does RFID differ from Chip-based tracking/recognition technologies? Or even generic bar codes. Everything simply holds information about an identity, right?

You are right! RFID and simple barcodes are mainly composed of a unique identity code which can be attached to an object or a person to identify them quickly. However RFID tags are an improvement over bar codes because the tags are wireless, have read and write capabilities, do not require line of sight like barcodes and can be read among thousands of other tags simultaneously. Data stored on some RFID tags can be changed, updated and locked. Some stores that have begun using RFID tags have found that the technology offers a better way to track merchandise for stocking and marketing purposes. Through RFID tags, stores can see how quickly the products leave the shelves and who's buying them.

In addition to retail merchandise, RFID tags have also been added to transportation devices like highway toll pass cards and train passes. Because of their ability to store data so efficiently, RFID tags can tabulate the cost of tolls and fares and deduct the cost electronically from the amount of money that the user places on the card. Rather than waiting to pay a toll at a tollbooth, passengers use RFID chip-embedded passes like debit cards.

Could you explain how an RFID tag/chip actually stores the information? Can the size of the data be increased?

Radio Frequency Identification (RFID) is a method of remotely storing and retrieving data using devices called RFID tags or transponders. An RFID tag is a small object, such as an adhesive sticker, that can be attached to or incorporated into a product. Simply put, RFID involves putting a small radio transmitter on a tag or a label with a unique identification number (UIN) on it. When passed under a RFID reader, the number contained in the tag is transmitted to a computer, which matches it with corresponding data.

Technically, an RFID system has three parts: a scanning antenna, a transceiver with a decoder to interpret the data and a transponder or the RFID tag that has been programmed with information. The scanning antenna puts out radio-frequency signals in a relatively short range.

The RF radiation does two things. One, it provides a means of communicating with the transponder (the RFID tag) and it also provides the RFID tag with the energy to communicate (in the case of passive RFID tags). This is an absolutely key part of the technology. RFID tags do not need to contain batteries, and can therefore remain usable for very long periods of time (maybe decades).

The scanning antennas can be permanently affixed to a surface or handheld antennas are also available. They can take whatever shape you need. For example, you could build them into a door frame to accept data from persons or objects passing through.

When an RFID tag passes through the field of the scanning antenna, it detects the activation signal from the antenna. That "wakes up" the RFID chip, and it transmits the information on its microchip to be picked up by the scanning antenna.

In addition, the RFID tag may be of one of two types. Active RFID tags have their own power source and the advantage of these tags is that the reader can be far away and still receive the signal. Even though some of these devices are built to have up to a 10 year life span, they have limited life spans. Passive RFID tags, however, do not require batteries, can be much smaller and have a virtually unlimited life span.

RFID tags can be read in a wide variety of circumstances, where barcodes or other optically read technologies are useless.

-- The tag need not be on the surface of the object (and is therefore not subject to wear)

-- The read time is typically less than 100 milliseconds

-- Large numbers of tags can be read at once rather than item by item.

There is a wide variety of tags available like readable only (with unique identification code), writeable with different data capacities, metal tags (to work on metal objects), ultrasonic tags to work under water, chemical resistant tags to be used tracking of liquids and chemicals, laundry tags which can be washed along with clothes and sky is the limit.

What's the business case for an industry (manufacturing or textiles) to invest in RFID and RFID-enabled infrastructure? How do you make the case for the ROI?

If you are referring to an ROI for RFID in the supply chain of manufacturing and textiles, there are some ROIs in a closed-loop chain. In an open supply chain, it is almost impossible to show an ROI for several reasons. First, the manufacturer makes the largest investment. Unlike barcodes, RFID is a variable cost. However, the return is primarily downstream. So, to do an ROI, we would have to base it on the entire supply chain and not on who continues to make the investment.

Second, most recent RFID projects are been through either faith or force. Mostly force. When a supply chain partner is "mandated" to do a project, they do not take the time to do an ROI. Hence, the "slap and ship" moniker that RFID earned.

RFID is actually an older technology than barcodes. In 1945, Leon Theremin invented an espionage tool for the Soviet government which is recognized as the first know RFID device. The first barcode patent was filed four years later. Based on the Product Life Cycle, RFID should have passed the maturity stage a few decades ago, and therefore would be in the decline stage.

A project worth mentioning is Masood Textile Mills in Faisalabad. It is known for the most advanced RFID tracking system used across business processes from purchase, production till delivery. RFID alone doesn't do any wonders. You need a proper ERP implementation and your business processes optimized to gain great results along with RFID. Masood Textiles spends 5% of their profits as per their IT budget every year and they have seen the growth in their business soaring since they have gained customer satisfaction. Being able to track their business processes they are able to commune the exact status on deliveries to their customers. They have full control over employee performance monitoring and they can track all the stocks so they don't spend in ordering what they already have.

Do you think the power of RFID is not completely appreciated by corporations? Reason for asking is that they will invest in Fleet Management System but may not invest in supply-chain management system which relies on RFID and its features.

Different people have their own targets. The purchasing manager may do a fabulous deal for his company by buying in bulk, but that in turn will reduce the stock turn in the warehouse on which the warehouse manager is measured.

The supply chain grid will deliver significant opportunities for greater streamlining, cost savings, speed and efficiency. At the same time, we will see supply chain event management become the norm over the next four years. We have track-and-trace for small parcels now, but RFID technology will give us full supply chain synchronization and visibility.

That's where we're going as an industry, but it's important to remember that about 80% of companies today are way behind the curve: they stand between the traditional 'silo' supply chain approach and the integrated model. The challenge for these companies is to transform their SCM approach so that they can move quickly to the networked solution, perhaps even in some cases leap-frogging the integrated stage completely.

Furthermore, to gain the full benefit of RFID, the corporations need to have successfully implemented ERP, SCM and HRMS systems in place. Several corporations in Pakistan are at the initial stage of infrastructural implementation and still have a suspicion on the ROI of their first stage investment. Therefore they are just being careful to have a fleet management system first and then moving on to supply chain management system and other RFID tools later if they see any return on investment substantial benefits. I call it a bad approach, since they need to understand that RFID compliments as a process enforcement tool to make the project successful anyways.

Does SOA make it any cheaper or easier to deploy RFID across large areas?

The value that RFID brings to any enterprise has been established through pilots conducted worldwide. For the move from the pilot stage to production and to derive maximum benefits from this technology, enterprises are realizing that greater and simplified integration with backend systems as well as the flexibility to support multiple supply chain processes are vital for their RFID initiatives to be successful. Coupled with this, there is the need to manage huge volumes of data that would be generated as a result of introducing RFID technology. Adoption of Service Oriented Architecture (SOA) principles by enterprises for addressing integration as well as data access concerns can significantly enhance their capability to adopt RFID and derive benefits from the same.

It may not make the RFID deployment significantly cheaper, but may prevent you from RFID project failures which can cause huge losses to the investment made in the RFID spectrum.

If you'd like more details, please visit solosmartinc.com

This story, "Understanding RFID in Your Business" was originally published by CIO-Pakistan.

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