Attaching an RFID tag to an object and incorporating that object into an RFID system, with a reader and software, can turn any object into a “smart” object, capable of communicating within the system. Long term predictions for these technologies include things like smart houses that know when you wake up in the morning, get your coffee ready for you and tell you you’re low on milk[1]; or smart shopping carts where you place what you want in a cart and walk out of the store, paying for your goods automatically when you exit.
While that sort of integration of RFID into our daily lives is years away, RFID technology is currently being used in many different industries and is expected to grow significantly in the next few years. The RFID tag industry is expected to see heavy growth in the coming years -- one third-party market research report forecasts a 14% Compound Annual Growth Rate and a total market value of $8 billion by 2014[2].
Part of the reason RFID technology is expected to see significant growth is due to its application diversity. RFID tags are used in dozens of applications in many different industries. In this section of our RFID series we will take a look at some of the wide variety of RFID uses:
Pharmaceutical companies can use RFID tags to track drugs and to verify authenticity throughout manufacturing and shipping[3]. This can help prevent fake drugs from entering their supply chains, helping to ensure drug safety to patients while allowing for much cheaper and much more efficient recalls when necessary.
Likewise, RFID can be used to track livestock from birth to retail sales. In fact, livestock tracking is predicted by British Research firm IDTechEx to be the largest RFID market by 2017 at nearly $6.5 billion worldwide[4]. This is expected to be largely propelled by government mandates requiring animal tracking for improved food safety. According to the U.S. Department of Agriculture, in the U.S. alone there are over 100 million cattle, and over 35 million additional cattle born each year[5]. In the instance of a food safety issue (like E. Coli in tainted meat), the affected products can be traced in some instances to the animal itself, as well as to any other animals or products that it may have come into contact with. This should allow quicker, more efficient and less costly recalls both in human health and money terms.
In farm management, RFID systems can be used along with software systems to allow for easier tracking of various animal characteristics depending upon the type of farm (e.g., milk production in a diary farm). This allows more tailored care and decreased labor costs. One report states that using RFID systems in such a way as to track individual cattle rather than groups of cattle has allowed one farmer to estimate saving $35-60 per head[6].
RFID tags are used in many toll roads to collect fees automatically as a vehicle drives by, while companies managing parking lots or managing auto fleets may use RFID to track vehicle locations or empty spots within their lots.
ExxonMobil has introduced its “SpeedPass” to collect payment at gas stations[7]. Credit card companies such as Visa, with its new "payWave" system, are beginning to offer RFID embedded smart cards to provide users with a more convenient "contactless" payment option[[8]]. Smart card shipments increased 16% to 675 million shipments in 2009[9]. One estimate from CHASE Card Services holds that smart cards may reduce transaction times by between 10-40%[10].
RFID can be used for security - data on the tag can attest to the authenticity of the attached document. Many nations have begun including them in passports -- the U.S. began doing this in 2006 -- and China recently completed a $6 billion project to include them in national ID cards[11]. RFID tags can likewise be placed in employee or visitor badges so organizations can use them to allow after hour deliveries or monitor visitor and staff access[12]. Some countries are considering adding tags to currency as a counterfeit measure[13].
For large retailers, RFID can significantly reduce costs despite the upfront investment in tags and systems, by reducing shoplifting and employee theft, and eliminating the need for manual inventory counting. This can also reduce overall inventory costs due to greater automation, increased data accuracy and decreased labor. It can also increase sales with better stocked shelves; according to the Wall Street Journal, an American Apparel pilot program saw a 14.3% increase in sales in RFID enabled stores due to better stocked shelves[14], and IHL group recently stated that eliminating the estimated $430 billion in sales lost due to out of stock items could help retailers improve sales by as much as 10%[15].
In addition to tracking inventory, tracking a business’s assets can also be very valuable. A Texas hospital reports saving $30,000 per month by tracking and monitoring the idleness of rented equipment[16].
Tracking assets can be an important application for businesses. According to Frost & Sullivan, hospitals lose 10-20% (approximately $750 million worth) of their assets each year. Construction companies can use RFID to make sure that tools are not left behind at work sites[17].
Businesses can also use RFID to better understand their customers. More accurate inventory data can allow a business to better anticipate future demand, and businesses have also used RFID to track promotions and sales[18]. Another application is monitoring the in-store travel of a garment from the rack to the dressing room and back to better understand consumer preferences[19].
RFID can be helpful in a business’s compliance or safety issues as well. Sushi restaurants can track raw food to make sure it doesn’t expire[20]; healthcare providers can track employee’s badges to make sure hands are washed[21] and they can track instruments to make sure they are sterilized[22]; and an Australian mining company can track vehicle traffic underground to avoid collisions[23].
Some of the more unique uses we’ve heard about are researchers tracking honeybees to study their behavior[24], casinos embedding tags in poker chips to monitor the money at their tables[25], and a waste management company using trucks with readers and RFID tagged recycle bins to measure the weight of a recycle bin prior to disposal and give the customer credit for their bottles and cans[26].
There are clearly many varied uses for RFID technology, and new ones are being dreamed up every day. It will be interesting to see what they come up with next.
