The Manufacturing Software Guide

Teresa Williams

1. Implementing RFID Is Cost Prohibitive
Comparing the cost of an RFID tag with the cost of a barcode label highlights a glaring cost difference. This type of cost comparison does not tell the true tale of the cost of an RFID implementation. It is important to consider the increased efficiencies gained by RFID versus the deployment costs and all areas where RFID will and can be applied to achieve the maximum payback.

Certainly, companies have to address the initial issue of compliance - often accomplished through a "slap & ship” RFID solution. This type of solution helps meet the mandates, but leaving the RFID install in this phase simply applies additional labor and packaging costs to the bottom line.

A phased implementation that addresses compliance needs and forecasts potential ROI hotspots is an excellent way to approach RFID to achieve the maximum benefit for the organization.

RFID provides the greatest payback when applied across the entire supply chain rather than at one specific point where the collected data is not used to improve overall efficiency.

2. RFID technology is Unproven and too "Cutting Edge"
RFID is actually not a new technology and has been around since the end of World War II. RFID has been used for years in the military, in the transportation industry, as a payment collection technology and as a personnel access technology.

There are actually quite a number of applications where RFID is currently in use. Those include Electronic Article Surveillance (EAS), shipping container and railcar tracking, animal tracking, vehicle access and control, production control, ski passes, sports timing, document authentication, dairy tagging, petrol and chemical dispensing, and environmental monitoring of transport environment.

Where the technology is "new” is in terms of considering it as a cost effective, enabling technology in manufacturing, warehousing, and distribution.

In these arenas, RFID provides the promise to drastically reduce costs and improve overall efficiency.

RFID also solves some problems barcode cannot. Radio waves travel through most non-metallic materials, so tags can be embedded in packaging or encased in hardened plastic for durability in extremely harsh environments.

RFID tags also have the capability of storing a unique serial number for every product manufactured around the world, enabling better inventory control and product recalls.

3. Companies are Backing off from RFID Compliance – why should we invest?
There is no denying that RFID mandates are here and currently in place. RFID Compliance is simply not going away.

Some major retailers may wait until others like Wal-Mart, Target, Albertsons, Best Buy and the DoD have blazed the trail for them – but those retailers lagging behind now still have future plans for mandating the use of RFID technology throughout their supply chains.

As vendors to these major companies invest in this technology and discover its benefits, the competitive advantage will swing to those already using RFID.

Deploying RFID now in stages offers companies the ability to learn more with each new mini-implementation and apply those lessons to reap the maximum benefits RFID has to offer.

Waiting to deploy allows other companies to gain a lead, and requires those lagging to implement RFID systems at a much faster pace and on a larger scale – where mistakes will make a much greater impact.

If companies are worried about changing standards and requirements within the RFID technology itself, the best bet is to invest in technology that can be upgraded to work with emerging standards.

Find manufacturers and software vendors who understand the evolving nature of standards and provide for easy upgrades through firmware and version updates.

4) We Have a Barcode System In Place
Barcode is a very efficient technology for automatically collecting data - RFID offers capabilities that allow a company to further optimize its processes. RFID will not replace barcode but can enhance the data collection system already in place.

By adding a layer of RFID technology, companies can reduce data collection labor, collect information not obtainable via barcode, or enhance the level of granularity of the collected data.

Through the truly automatic nature of data collection RFID offers, companies are able to track and identify product through various stages within the supply chain. RFID Readers automatically capture information for processes such as ASN (Automatic Ship Notification) rather than waiting on the employee to scan the barcode label and push the information to the process.

Where can RFID improve on barcode's ability to collect data? RFID offers the ability to scan and read from a variety of angles and through materials – requiring no line of sight to be read. RFID tags hold an incredible amount of data, allowing them to push through more detail than barcodes. RFID also tracks product as it moves rather than relying on labor to physically scan labels.

In most cases, RFID systems can easily co-exist with existing barcode systems and indeed share many major architectural components of established barcode systems.

5) What About Privacy Issues?
The issue of maintaining privacy with RFID is an important issue for users and consumers to understand.

The big concern is that RFID tags will be able to associate individual serial numbers with the individual purchaser. Though this may be technically possibly, the actual application of RFID to this process is not. It would require item-level tagging, which no company is ready to implement let alone increase prices to cover the cost of such an extensive tagging effort.

It is important to understand that even though RFID uses radio frequency, the relatively short read ranges make its use as a surveillance application quite impractical. RFID does not possess the same capabilities as Global Positioning Systems (GPS).

Additionally, data that does travel via RFID through wired and wireless connections uses encryption technology and requires mutual authentication making it virtually impossible for someone wearing an RFID tagged item to be tracked illegally or have their identity stolen.

About the author:
Enterprise Information Systems (EIS) provides comprehensive radio frequency identification (RFID) technology to manufacturers who want to promote supply chain efficiency and comply with the systems of major retailers and government agencies alike.