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Understanding RFID

Most logistic managers don’t understand how RFID can improve their supply chain operations.

At the moment, the hype associated with RFID is still growing, but there are an increasing number of reports of RFID pilots being abandoned because they fail to achieve their targets. However, many reports are providing inaccurate information on the use and benefits of the technology.

Examples of these inaccuracies include:

• RFID technology will enable lorry loads of product to simply pass through a gate, achieving 100% read of each item on board
• RFID tags will be almost invisible, and we will therefore be subjected to invasion of our privacy as the tags are hidden in our clothing, (e.g. interrogated as we enter stores and pass through their readers)
• It is essential to wait for a common standard to be agreed before implementing an RFID solution
• RFID is best used as a replacement for the common barcode

Much of the misunderstanding comes from the complexity of using RFID technologies, and from individuals trying to avoid the laws of physics that the devices obey. This article cannot hope to address all of these inaccuracies, but will focus on some key business questions:

What is RFID?

RFID was first used in World War II to determine airborne friend or foe. These were large expensive systems that saved lives and are still used in modern aircraft today. However, the technology has improved, with smaller, more accurate and more affordable solutions – but these still obey the laws of physics. Passive tags hold data within a chip. Once activated by a radio wave, they send data back to the receiving antenna.

Different factors affect the performance of a tag:

• Read range is affected by the frequency selected, power output and the tag/antenna size. Very small tags can only be read by antennas nearby.
• The more data on the chip, the more power is needed to read it and the more complex the system. There is therefore an optimum data/tag size/power output relationship.
• At low frequencies (LF) there is a problem of contention, which prevents multiple reads. LF is therefore not suitable for bulk product moves but could be effective for tracking individual items (e.g. trucks, cages).
• At higher frequencies, the radio waves are absorbed by water and shielded by metal - so shampoo bottles and coke cans are difficult to tag.
• RFID systems are affected by electrical noise, and readers from one system are likely to interfere with another.
• A 100% read rate cannot be guaranteed.

How can I use RFID most effectively in my supply chain?

It would appear that the challenges are insurmountable! However this is not the case. Used in the right place and at the right time in the supply chain process, RFID will provide:

• Cheaper audit / stock check processes
• Better adherence to / visibility of process
• Greater accuracy than an operator using a barcode reader
• More real-time data than a barcode
• Greater traceability of the individual item, even back to the field, sea or factory of origin

The single biggest advantage of RFID in the supply chain is knowing where a specific item is at all times, without manual intervention. It can therefore be used to:

• Improve customer care (for example, “Your product is currently in our Rugby warehouse, and will be with you as promised”).
• Divert stock from one supply route to another when customer demand. requires, reducing stock outs (which can decrease turnover by up to 4%).
• Reduce the euphemistic ‘shrinkage’ as leakage is spotted.
• Identify when sell-by dates will be a problem if delays occur.

What about privacy laws?

If you are just trying to achieve the above business benefits, you are unlikely to break any privacy laws. There are many advantages to using RFID: security/safety, adherence to health and safety, traceability, food standards, etc. The laws of physics also make it very unlikely that individuals will be unaware that the product is tagged and that someone is trying to read the tag.

How can I maximise the return on my investment?

The ‘5 cent tag’ on individual products will take a long time to appear, so it is best to start using RFID tags in your supply chain to track assets; cages, totes, pallets etc. You can then reuse the tags and recycle assets, reducing losses and determining where damage or misuse is occurring. High value items will benefit from individual tags as well, but you need to be aware of the complexity of the technology and be prepared for bespoke solutions. ‘One size fits all’ and ‘off-the-shelf’ are not yet available. It is vital to use solution providers that truly understand the challenges identified above.

The following top ten tips are worth noting:

1. RFID technologies obey the laws of physics - so if you understand these laws, implementation will be much easier.
2. Implementing RFID

   Seek independent advice on the best solution for your needs: read only, read/write; active, passive; low, high, ultra high etc.; antenna size; tag size; power outputs...

3. Effective data management is vital. Process quickly at point of capture; minimise multiple reads; pass activities back to the central server; compare planned and actual activities. Minimise the flow of tag information, maximise events.
4. Tags are affected by your location, other tags, metal, water, moisture, electrical noise, etc. Get advice, or test them in the laboratory and on-site.
5. Tag prices will remain high for the next two or three years, and some issues relating to worldwide standards remain. However, prices will fall eventually, so it is worth piloting them and improving your processes.
6. Benefits of RFID

   Its speed and accuracy: and it doesn’t rely on line of sight. RFID is more than simple barcode replacement – although this is a good place to start.

7. Barcodes tend to be used just once, whilst RFID tags can be re-used many times – and are therefore ultimately cheaper.
8. RFID tags can hold a lot of information. Read/write tags can also keep a history of use (e.g. servicing) if required.
9. Automatic asset tracking has many benefits. Use product tags and a barcode or printed label to record events: you can use several tags at different frequencies.
10. Start small: the best benefit comes from end-to-end process improvements and the use of RFID tags to eliminate the errors that can arise from manual checks.

Pause for Thought: Think about tags on assets, cases, pallets, cages and totes and the benefits of not having to keep replacing them. Or use them on trucks, tractors and trailers to automatically trigger processes (e.g. notification of goods arrival to activate unloading teams). Or on stock and tools and test equipment, and benefit from automated inventory management.

For more tips, send for our free guide: “101 Top Tips for Transporatation and Warehouse Managers”.

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