Monday, July 18, 2011

Why RFID? - Part 2 in our RFID Series

Radio Frequency Identification (RFID) has the potential to dramatically alter the way people live their lives and the way businesses and governments operate. Its impact will be especially felt in business where some foresee no less than “a business revolution”[1]. RFID systems are comprised of three things, a tag with an antenna and microchip to store data, a reader to interrogate the tag and retrieve the data, and software to interpret and organize the data as desired. Much more than a “glorified bar-code”, RFID allows tracking and identification of objects in real time; some systems even allow constant tracking.

With an RFID system, we have the ability to take nearly any object and make it “smart” or at least “smarter” by allowing it to communicate back to its reader. A basic tag allows the object to communicate its location. Some tags are combined with sensors to provide more information. Think of a tag combined with a temperature or heart monitoring sensor on a patient in a hospital. Integrated into the hospital network this could allow patient location and condition monitoring in real time throughout the hospital[2].

Some of the general benefits of RFID systems are that they allow accurate and efficient data acquisition. With the increased computerization and automation provided by an RFID system there is a decrease in manual data entry and therefore fewer opportunities for errors. As RFID systems are wireless there is less need for “cumbersome cables”, they take a minimal installation time, and have low maintenance requirements[3].

For consumers RFID should yield increases in convenience, efficiency and safety. With RFID tagged retail products and checkout readers we should see more self-service retailers, perhaps even hybrid-vending machine / mini-marts with no employees other than the ones needed to tag all the mini-mart’s products[4]. RFID enabled “Smart Cards” should “reduce consumers’ average transaction time by between 10% and 40% depending on whether purchases are made in stores or at drive-throughs”[5]. On top of quicker and more convenient shopping, products should be safer as livestock, pharmaceuticals and everything else being tracked with RFID can report to consumers the product’s history, and “pedigree”, assuring the consumer of both the safety and quality of the product[6,7]. Farther into the future there are the ideas of automated kitchens; e.g., your milk carton notifies the refrigerator that it has expired, or that its contents are low; the refrigerator, in turn, notifies you, or simply orders a new carton from the store[8]. The possibilities for RFID to change our day to day lives are numerous, wondrous and limited only by our imaginations.

While the benefits of RFID for business may not be as glamorous as those for consumers, businesses will enjoy the greatest rewards from implementing these systems by being able to (to name a few):

  • Better locate and deploy inventory in the supply chain
  • Reduce lost shipments
  • Increase sales by decreasing out-of-stocks and increasing in-store item availability
  • Reduce employee theft
  • Protect brands through ensuring product integrity
  • Better understand consumer preferences
  • Increase knowledge available to the customer
  • More quickly and efficiently facilitate recalls
  • Track, monitor and manage promotions and sales
  • Locate, track, maintain and prevent theft of company assets
  • Reduce labor’s share of operational costs through increased automation
  • Increase predictability in product demand

In addition to these more generalized benefits for businesses there are many specific benefits for different particular applications or industries, too many to name here. It is clear however that because of these benefits RFID will become a major part of business operations. Businesses will eventually need to adopt RFID in order to run more efficiently and keep up with the competition.

[1] Budde, Paul & Harper, Phil Australia 2007 - Mobile Data and Conten,- The Long Wait for 4G; Paul Budde Communication 9/2007
[2] “Diagnostics Market Research Bundle” Kalorama2009 Diagnostic Industry Bundle; Kalorama Information A division of, May 2009 pg 116
[3] “Kalorama Tech in Heatlchare Bundle” Kalorama Information A division of; November 2008; pg 37
[4] “The Self-Service ‘Buy-and-Pay’ Market” Vending and Foodservice Trends in the US Packaged Facts, June 2008.
[5] “The Self-Service ‘Buy-and-Pay’ Market” Vending and Foodservice Trends in the US Packaged Facts, June 2008.
[6] Swedberg, Claire; “Norwegian Food Group Nortutra to Track Meat” RFID Journal; July 22, 2008
[7] “RFID and UHF: A Prescription for RFID Success in the Pharmaceutical Industry”
[8] Budde, Paul & Harper, Phil Australia 2007 - Mobile Data and Conten,- The Long Wait for 4G; Paul Budde

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