Breakthrough technology

RFID supply chain revolution

By George Reynolds

- Last updated on GMT

Related tags Rfid Supply chain

Radio frequency identification (RFID) technology is revolutionising
supply chain management.

RFID has long been touted as the future of logistics for all companies by allowing retailers and suppliers to track and trace goods throughout the supply chain. While retailers are pushing suppliers to embrace the technology, the costs involved and skepticism of the benefits have dampened manufacturer enthusiasm. At present, barcodes and serial numbers allow items to be identified at make and model level. RFID tags can ultimately be used to identify an individual item. When these tags pass through a field generated by a compatible reader, they transmit this information back to the reader, thereby identifying the object. The information carried can provide details of place and date of manufacture, a log of an item's journey through the supply chain, and all other manner of information that could be used to improve the tracing, tracking and movement of goods. Being able to identify items at an individual level has huge implications across the food industry and is a technological leap. In the event of food scares, a precise recall of the exact goods likely to be affected can be made, rather than a wide scale operation to recover all items with a certain serial number. Traceability is now part of food safety regulations in many countries, and RFID will extend its reach and effectiveness as the technology develops and proliferates. Tracking individual items also is helping to improve the efficiency of the supply chain and logistics. Being able to track items allows greater stock management. Automatic readers can provide stock level updates. A reader interfacing with ordering software can conceivably automatically re-order when stocks are running low. The applications of RFID reach far beyond the warehouse though. Individual item identification will enable manufactures to pinpoint the exact ingredients used to produce an item. Supermarkets, such as Wal-Mart and Metro have set mandates, forcing food manufacturers to make investments into systems and tags. The advent of the RFID is therefore inevitable. This year, Metro announced trials of the technology in its distribution centers in Germany had proven successful. RFID read rates of 98.5 per cent were achieved on products passing through detection devices, and Metro now has roll-out extension plans for beginning later this year. However, the form RFID takes across the food industry depends on the sometimes conflicting needs and expectations of both suppliers and manufacturers. Manufacturers are searching for a cheap RFID solution to make it economically viable, especially for individual lower value goods. While tagging whole pallets becomes common due to the low cost against the value, using the RFID on individual items is as far away as 2016 according to recent market analyst report published earlier this year. IDTechEx said that for item-level tagging to become widespread in low cost goods, the technology will have to evolve. Cases are beginning to be fitted with RFID, edging closer towards individual item identification. Developments, such as RFID ink, will provide the industry with the 'one cent tag' that is commercially viable for use on lower cost individual items - but not until 2016, according to predictions. Until then, re-usable tags may provide a cost effective solution, although not for low value goods in packaging that is likely to be discarded. Re-usable tags are more likely to feature at the other end of the market for high value goods where tags can be removed and returned, such as meat carcasses. Indeed, RFID tags are becoming available that are resistant to irradiation and temperature, and robust against other damage. Retailers see possibilities the technology can offer and have expectations that it could radically change business. The well-cited vision is that fridges in homes will be able to communicate with their contents providing information to consumers about on use by dates, nutritional content and who knows, even recipes. While some longer term objectives converge and diverge, today's main issues are how can those prepared to embrace the technology find a global standard to communicate through, while working with those lagging behind. The answer lies with finding a standard, a denominator within RFID that can be displayed on or in something everyone can use. Standards, such as Electronic Product Code (EPC) are currently being tested, which will allow companies and regulators to share information, thus speeding up the supply chain and cutting down on errors. RFID is also being incorporated into labels that display part of the information, via conventional barcodes for example. This enables those without the equipment to detect the tags to at least read some of the information they contain, allowing a minimum level of communication and understanding to take place. While the inevitable future is with RFID, the technology of tomorrow must, for today at least, keep one foot in the past.

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