25 Feb Bar Codes Have a New Best Friend – RFID
The push is on to make RFID an integral part of business – and Wisconsin companies stand to benefit tremendously from the new technology.
RFID (radio frequency identification) tags and labels are small programmable carriers of data that hold up to 128K of information and uniquely identify an item. Also known as Smart Tags and Smart Labels, they can identify where a product has been and where it’s headed. Unlike bar codes, RFID tags and labels don’t need to be in a direct line of sight of scanners.
RFID tag and labels can contain thousands of pieces of data like price, batch number and product weight while bar codes only contain between eight and 30 characters. RFID tags and labels work well in warehouses and baggage-handling areas because they can withstand rough treatment. They also fit the bill when a high degree of accuracy is required, like tracking raw materials for safety and quality reasons. Pharmaceutical manufacturers will benefit greatly from this technology as well, since these industries must comply with numerous federal product-handling regulations. Experts estimate that companies are losing $4 to $5 billion in sales because of miscommunication and misinformation with supply chains.
From warehouse to store, RFID increases productivity and makes the supply chain more visible and supplements or eliminates manual scanning currently required to capture and track information. There are already some major corporations that are reducing human error, inventory shrinkage and warranty fraud by adopting RFID technology. However, in light of these new developments, some have been quick to predict the demise of bar codes. However, bar codes and RFID will peacefully coexist for many years to come.
Bar codes, the ubiquitous labels that grace many of the items we encounter every day, have enabled a new realm of information exchange and the benefits. And they aren’t going away anytime soon. But bar codes are just the beginning of an evolution that’s primed to take information, productivity and labor savings to new levels of efficiency.
Tracking usable assets such as containers, yard equipment and trucks is an obvious choice for early adoption of RFID. But, like the adoption of bar codes, it’s just a matter of time before these tags will find their way to the milk carton in your refrigerator.
Large entities such as Wal-Mart and the U.S. Department of Defense want suppliers to start using RFID tags and labels on crates and pallets. Wal-Mart has given its top 100 suppliers until 2005 to achieve RFID compliance. The initial cost will be high for Wal-Mart and these suppliers, but Wal-Mart is not exactly known for frivolous spending. RFID will help the retailer better track billions of dollars worth of received products – saving the company huge amounts of money and helping its suppliers increase sales.
The next step in the advancement of RFID is the development of a decoding device that can read both a bar code label and an RFID tag or label. Bar codes must be properly aligned with a scanner, but RFID tags and labels can be read and simultaneously processed without a specific orientation or line of sight. For example, with RFID, it is possible to read in whole pallets of products by driving under a gate antenna.
While the benefits are clear to warrant the adoption of RFID, it’s the cost of the Smart Tag or Smart Label that presents a challenge. Bar code labels can cost 1 to 3 cents to make, but an RFID tag or label currently costs 30 to 50 cents. But like all technology, the price has already come down dramatically. According to a white paper by Zebra Technologies, RFID tags cost $1 to $2 as recently as 1999. When production costs drop from 50 cents to 5 cents, consumers will see RFID tags and labels on more items.
The market for RFID expanded from $227 million in 1995 to $965 million in 2002. It’s expected to grow to $2.7 billion by 2007, according to Dan Mullen, president of Automatic Identification and Mobility Global, a trade organization in Pittsburgh.
In Wisconsin, several companies are already using RFID or are actively experimenting with it due to its large role in logistics. Our state’s companies will benefit from this technology with its applications in manufacturing, distribution and transportation – helping them. RFID will survive and prosper — it’s just a matter of time. Those companies willing to make the investment will reap the first benefits.
Gary Jahnke, Miles Data Technologies vice president of sales and marketing, has more than 20 years of automatic identification industry experience. He can be reached by email at GJahnke@milesdata.com. Miles Data Technologies is a bar code and RFID systems integrator with offices in Milwaukee and Appleton.