decent coverage on RFID in the Wall Street Journal. Just wish we got named as "emerging". Fox.
Telecommunications (A Special Report) --- Beyond Bar Codes: Radio ID tags may soon be placed in every
product imaginable
By Kevin J. Delaney
09/23/2002
The Wall Street Journal
R10
(Copyright (c) 2002, Dow Jones & Company, Inc.)
PARIS -- LOOK OUT bar codes, here comes RFID.
Retailers, their suppliers, and zealous techies are abuzz with the idea of slapping small devices known as radio frequency identification tags on products to track them from the assembly line to your shopping cart.
The RFID technology, which was first used to identify approaching planes as allies in World War II, today lets you
wirelessly transfer information to and from simple tags that can be even smaller than a postage stamp.
When it comes to retail, the appeal is that you won't just be able to tag a product generically as a bottle of milk, for
example, as you currently would with a Universal Product Code, or UPC, bar code. You could theoretically give each bottle its own distinct code, which would let you keep track of where a given bottle is at any time, where exactly it came from and when the milk is due to expire.
The other main advantage is that you don't have to manually scan each item every time you want to check this
information -- wireless readers can query as many as hundreds of tags at the same time and do so from several feet away without the individual tags having to be visible. This means a whole crate-load of bottles could be scanned without removing each one. A shelf-mounted reader might provide updates on the number of bottles left. For consumers, it means the ability to speed up the checkout process by pushing your shopping cart in front of a wireless radio reader.
On top of that, a whole range of other applications will be possible once RFID becomes more common. A tagged shirt, for example, might wirelessly tell your washing machine at what temperature it needs to be cleaned -- or tell your dry cleaner that the shirt belongs to you.
What's driving the latest wave of enthusiasm for RFID? RFID tags are gradually getting cheap enough to make it
economically feasible to put them on more and more items. Already, some of the simplest tags cost in the range of 40 cents. And RFID promoters say the technology exists to produce them for around five cents each, when manufactured in volumes approaching 10 billion tags. That's still a ways off, however. RFID standards haven't all been set yet, and the whole infrastructure -- including widespread adoption of a universal-price-code type of system -- is still being developed for the retail industry. More companies also have to commit to the technology before the manufacturers will build the production capacity needed to bring costs down to the five-cent level.
Techies also are excited about the potential applications once tagged items are linked with all of the fancy business computer systems companies have installed in recent years to make their operations more efficient and to keep track of individual customers and their preferences.
"If you had to pick just one technology that could really make a difference [to businesses], it would have to be RFID," says Glover Ferguson, chief scientist at Accenture Ltd., the Bermuda-based technology consulting group.
RFID tags come in a wide range of sizes, price ranges and degrees of sophistication, but they all have two basic
elements: a computer chip and an antenna. The simplest tags, designed for eventual mass retail use, include tiny chips that can store around 100 bits of information. Depending on the system, the chips can read back and sometimes write new information into their memories. They're linked to antennae, made of coils of copper or aluminum wire or a special conductive ink, which receive a radio signal from the RFID reader, a separate device that emits such signals and processes the tags' responses. The simplest versions of this technology, so-called passive tags, don't even have batteries. They draw their energy from the reader's radio signal itself, much as a solar calculator is powered by light waves.
Typically, when a tag comes in range of a reader, the radio signal powers up the tag. The computer chip on the tag then sends back a radio signal to the reader containing the data with which it has been encoded. In the systems that some retailers have begun piloting, the reader would be linked to a computer network, where software would be able to analyze the data sent back by the tagged object, identify it, and then issue instructions based on that. The software, for example, might charge a customer's account for the item, it might order a robot arm to pack the object in a specific mail-order shipment box, it might register in a database that the tagged item has made it from the warehouse to the store's shelves, it might note that a customer had taken an item into a dressing room but decided not to buy it.
The basic RFID technology is pretty simple, as modern electronics goes, and more than 50 companies, including such heavyweights as Texas Instruments Inc., Dallas, and Philips Electronics NV, based in the Netherlands, make the equipment.
There is a good chance most consumers have come in contact with an RFID tag already. They're used as security
access cards in places including the latest Academy Awards ceremonies. They're sewn into high-end ski wear distributed by Goldwin Europe SRL, a unit of Japan's Goldwin Inc., stuck on compact discs at some record stores, and built into the motherboards of some IBM computers. Exxon Mobil Corp.'s Speedpass program in the U.S. lets people pay for gas by waving an RFID tag at a reader on the pump. Tags are the basis of the electronic keys needed to turn on virtually any car sold in Europe after 1998. Libraries around the world are installing RFID systems to trigger alarms if someone tries to steal a book, but also to find misplaced volumes and weed out ones that aren't being used.
Animals have been fitted with RFID tags for years, as cattle farmers, for example, try to keep track of their herds.
Scientists have injected the tags in penguins in Antarctica to help study their movements. Even trash collection has been changed by the technology: A Canadian municipality is using RFID tags as part of systems to bill citizens by the pound for garbage removal. At least one city in Europe is hooking tags to sensors that alert garbagemen when trash cans are full enough that they need emptying.
Industrial use is growing too. Ford Motor Co., Dearborn, Mich., affixes RFID tags to help manage the production of its Windstar minivans at a plant in Ontario. The tags are attached to the radiator assemblies of the minivans and provide information about each minivan's specifications to computers and assembly workers throughout the 25-hour production process. For example, they tell robot painters what color to use and let workers know which options, trim combinations, and special components have been ordered on a specific vehicle. An Australian company sells RFID systems linked to heat sensors that can detect problems with railway-car axles and bearings in order to reduce the risk of derailment.
Mitsubishi Electric Research Laboratories, the North American research branch of Japan's Mitsubishi Electric Co., has built a prototype system using RFID technology and special glasses that would notify restaurant staff when it's time refill your drink.
Research firm Frost & Sullivan estimates the RFID application market represented $1.26 billion in revenue in 2001 and that it should grow 29% annually to reach about $7.25 billion by 2008. The bulk of that remains in the manufacturing and logistics, transportation and security areas. Frost & Sullivan, based in San Jose, Calif., predicts that the revenue from "emerging" RFID applications, including retail use and airline-baggage tracking, will grow 32.5% annually from 2001 through 2006 to become a $33 million business.
Those forecasts show how retail remains a tiny fraction of the overall RFID market. For the moment, price and
technology-standard issues are the biggest factors holding back its further spread.
"Obviously you're not going to put a tag that costs 50 cents on an item worth 50 cents," says James Crawford, retail analyst at Forrester Research in Cambridge, Mass.
As for the technical side, there's no universal agreement on all of the standards for RFID tags. For starters, they respond to different radio frequencies and signals at different power levels in different countries, depending on local regulations of radio waves. RFID experts say that's a temporary problem, as readers can be programmed to operate in multiple frequencies, letting them read tags operating on different standards.
The bigger issue is constructing a common database of RFID codes for tagging items so that every retailer can read an RFID tag from Tropicana, for example, and know that it's affixed to a one-liter container of Ruby Breakfast juice that expires three weeks later.
The Auto-ID Center, an industry-funded research program with headquarters at the Massachusetts Institute of
Technology in Cambridge, Mass., and at the Cambridge Institute for Manufacturing in Cambridge, England, is trying to develop some of the basic infrastructure, such as the individual product codes and computer software and
central-database repositories for handling them.
"It is our hope that in the beginning of 2004 we will see the adoption starting [in the retail area] and then we will see the volume come up," says Helen Duce, associate director for the Auto-ID Center in Europe.
Already, a significant number of retailers and their suppliers are pushing forward with pilot programs. To supplement its usual inventory efforts to reduce theft and loss, Unilever puts RFID tags on some cases of its All brand liquid detergent manufactured at a Baltimore plant. Those cases are tracked by computer from the plant to their arrival at a Sam's Club retail store in Tulsa, Okla., that's serving as a pilot site for a number of other consumer-goods manufacturers. Sam's is a unit of Wal-Mart Stores Inc., Benton, Ark. Unilever, the Anglo-Dutch consumer-goods giant, plans to extend the test program to tagging individual detergent bottles sent to a specific Wal-Mart store by the beginning of next year.
Some logistical obstacles stand in the way. Unilever is sticking the RFID tags on cases now manually, and it's still working out how to affix them to individual bottles without slowing down automated production lines.
"The other thing that is key to us is integration with our current [computer] systems," says Donncha Schollard, director of the Unilever Digital Futures Laboratory in Englewood, N.J. "It's quite a big task."
Mr. Schollard says RFID tags promise significant savings in labor costs because they bypass the need to scan bar codes by hand. But he says even at five cents a tag, they're still too expensive to use on many mass-market consumer goods.
"The goal for a unit level is one cent," he adds. "That's more than five years away."
Given the pace of RFID's roll-out, most people agree, the bar code will be around for a while.
Meanwhile, Intel Corp., of Santa Clara, Calif., has launched a research and development plan it calls "Radio Free Intel" aimed at building a tiny wireless radio transmitter onto every computer chip it manufactures. The semiconductor giant's chief technology officer, Pat Gelsinger, predicts the cost of doing so could be as low as one cent within 10 years.
The Intel initiative is in some ways an extension of the latest wave of RFID enthusiasm. Mr. Gelsinger says the
chip-mounted radios would be much more sophisticated than a simple RFID tag and potentially even double as a
cellphone. But both technologies promise to quicken the arrival of communicating objects, which share increasingly detailed information about each other without human intervention.
"When the economy starts to pick up, and there's some breathing room for investments, I can really see this thing taking off," says Accenture's Mr. Ferguson. |
