09Mar2011
RFID: SILVER BULLET OR FLASH IN THE PAN?
Is RFID tagging the silver bullet for supply chain visibility, or a mature technology that’s gone as far as it can in the food industry? Pundits line up on both sides of the issue. One side says the industry has only skimmed the surface of RFID’s true potential in inventory management and supply chain visibility — particularly in light of new federal food safety regulations that spotlight the need for complete supply chain traceability.
NEW TECH CHEAPER?
But others believe that newer technologies, such as two-dimensional barcodes or the upcoming GS1 Data- Bar, can do the same job as RFID tags and for a fraction of the price. Both camps agree that prices for RFID tags and readers won’t come down further until usage attains critical mass. However, critical mass can’t be reached until prices come down. “In the consumer products industry RFID will gain some penetration in apparel because each SKU is an ‘each’ with its own size, color and shape,” says Dave Donnen, partner, A.T. Kearney (www.atkearney.com). “But the cost/benefit equation is still not there in the food industry.”
Donnen’s comments are underscored by a major new initiative among apparel retailers and suppliers like Macy’s and Jones to expand itemlevel, EPC-enabled RFID technology, a move proponents see as the Holy Grail of inventory management.
Meanwhile, Walmart, one of the technology’s early proponents, announced it is taking a completely new approach to RFID with itemlevel tagging of menswear. Two years earlier, the chain told manufacturers (including food) to put RFID tags on all single-item pallets and cases, a practice that was discontinued when it proved to be a waste of manufacturer resources that yielded little if any benefit for Walmart.
However, RFID is an evolutionary proposition within the food industry supply chain and is gaining traction for pallets, cases and, in some cases, item tagging, according to Tom Singer, principal, Tompkins Associates, Raleigh, N.C.-based supply chain consultancy (www.Tompkinsinc.com).
PASSIVE RFID
One recent development that could facilitate item-level tagging comes from Avery Dennison in partnership with General Electric — a passive RFID tag that could, for example, be put in a carton of produce to detect methane gas when a piece of fruit or a vegetable begins rotting. “The recession wasn’t a good time and the value proposition has been struggling due to the price per tag. But I don’t think RFID has reached its full potential,” he says. “I see RFID gaining traction in frozen and dairy. But you have to break the cold chain into two areas. One is basic shipment tracking where you would use a semi-active smart tag to monitor temperature as unit loads progress through the supply chain,” he explains.
“The other involves intelligent solutions that not only monitor and track temperature over a specified time period, but also send out alerts if temperatures fall outside certain parameters. We’re seeing inside facilities and in stores where instead of manually monitoring temps in freezers or putting in hard wired sensors, they are putting in active (wireless) tags,” says Singer. “The tags may cost $10 but you don’t need that many and you don’t need someone to check on temperatures every couple of hours.”
Jack Sparn, CIO, iGPS (www.igps. net), Orlando, believes that taking the human element out of the equation can be a big advantage. “In the past, a forklift operator had to stop, find a label he could see, then pick up a scanning gun and hope for a read that would capture the data,” he said.
“There’s always a lot of room for human error. Several of our customers are starting to use robotic conveyors for moving loads or palletizing loads for shipment. RFID tags attached to pallets enables a laser-guided device to put products in the right slots in the warehouse.”
RANDOM RF WAVES
However, there are other issues associated with RFID — especially in stores, according to Donnen. “There is a problem with random RF waves. Every time an electronic door opens and closes it creates an RF field and there are lots of devices in the store — everything from phones to wifi systems — that create electrical interference. The question is how well can you protect an RFID tag from being misread. And protecting it is an additional cost,” he notes. “Just because something is physically possible doesn’t make it economically viable.”
Even when it comes to recalls, the industry is not getting down to individual packages. “We tend to do time bracketing in order to recall products within certain dates. You may not know exactly which product to recall but it gives you a buffer on either end,” he says, noting that a good barcode is enough to do the job even though it doesn’t have non-lineof- sight readability.
However, experimentation with RFID is going forward on a global level. “The Metro Group is testing a ‘smart cooler system’ at its Future Store in Tonisvorst, Germany. It uses intelligent shelving located in the fresh meat refrigerator,” says Bjorn Weber, research director, retail technology for Planet Retail (www. planetretail.net), Frankfurt. “All items on the smart cooler shelf are tagged with RFID labels that carry a unique number for each item. This number refers to a central database where the sell-by date is stored. The database enables store managers to know the exact stock level so no item goes past its sell-by date,” he says.
The system also circumvents the old problem of RFID’s inability to scan through liquids or metal. “The meat is in transparent plastic packages with sufficient empty space around the product. This enables radio waves to pass through the liquid-containing food,” says Weber. “And, every time a customer picks a package, the Smart Cooler Shelf reads the RFID tag and informs the database that the stock level has decreased.”
London-based Marks & Spencer, one of the world’s largest users of RFID tags, now uses RFID tags on returnable plastic pallets for private label food. “About 90% of Marks & ‘Spencer’s food assortment is transported in returnable pallets. Since suppliers produce and pack exclusively for M&S there are no additional process costs involved in using the retailer’s pool,” according to Weber.
SMALLER LABELS
The retailers’ warehouses read some two million trays per week but the company has no plans to place tags on individual food items, Weber notes. However, the company is about to launch the next generation RFID tag which has a smaller chip and enables the size of the labels to be reduced. The chain is also considering RFID technologies like printed electronics.
At SPAR in Austria, RFID-tagged food is monitored during transport to improve quality and safety. “A special temperature sensor is attached to an RFID tag. One sensor is located in every truck. Every few minutes it measures temperature and transfers the data to a handheld device,” says Weber. “The driver then hands the device to someone at the store who can see if goods have been exposed to dangerous or higher than acceptable temperatures.”
Similar tests are being run in the U.S. by iGPS, notes Sparn. “In the cold chain we’re running tests with active RFID devices, battery driven tags that are more powerful and enable more functions, like capturing temperatures for specific time periods,” he says. “It can tell you if a product went above or below freezing and then take the information at the loading dock and put it on a database where the manufacturer can see a temperature profile of the product that was received by a retailer.”
PRICES COMING DOWN
As to the cost of RFID, “prices are coming down but not as quickly as people would like. Devices and readers have a lot to do with price,” says Sparn. Two years from now they will probably be half the price they are today just as now they cost ten times less then they did five years ago,” he adds. Readers can be purchased for $1,000 or less and can give an accurate read within 30 feet even for passive tags, Sparn notes.
