BRINGING DOWN THE COST OF RFID

While the general consensus is that RFID is too expensive and difficult to integrate into existing ERP/CRM systems, interoperability issues are being addressed by software and label suppliers.

RFID is being heralded as the universal panacea for improving supply chain management. However, while it undoubtedly brings benefits in terms of improved asset management and profitability, the technology is expensive, much more complex than barcoding and difficult to integrate into existing ERP and CRM systems, says IDC systems.

US-based AMR Research estimates that a company shipping 50 million cases annually to Wal-Mart, will have to spend $13-23 million simply to meet the retailer’s requirements. While an extreme example, it tends to give weight to the view that the relative cost of RFID systems is too high.

Challenging this view and supporting the argument that the longer-term benefits of RFID outweigh the short-term costs, is the example of Scottish and Newcastle Breweries. Since fitting RFID tags to its high value beer kegs, the company is saving $25 million annually as a result of reducing the number of kegs lost or not returned by customers.

IDC has addressed the problem of interfacing RFID into an existing IT system with its Simplitrak software, designed to provide a gateway between the RFID readers and the WMS or ERP system, providing a flexible low cost route for companies requiring complete visibility of their supply chains.

Bringing RFID into the factory requires tailoring the installation for your particular environment and products and ensuring you have the right antennas, readers and other hardware and networking components.

Labelling systems

“Many labelling systems companies tied themselves technically into one or other of the various chip standards that are likely to be applied in different countries and industries,” explains SATO’s RFID business development manger Richard Scott. “It’s a bit like the VHS/Betamax scenario – some will find themselves out on a limb by backing the wrong protocol”.

Already a full service provider for RFID products, SATO has formed strategic relationships with other companies to enable its printers to programme RFID chips while printing self adhesive labels or card tags.

“One of the key drives to implement RFID technology is coming from major retailers such as Tesco and Wal-Mart,” says Scott. “In June 2004 SATO was appointed a Gold Partner by the METRO Group along with 16 other businesses including Microsoft. We are supplying equipment for the rollout of RFID systems to its suppliers.”

SATO printers are compatible with two types of RFID labels: HF 13.56 MHz, widely used for ticketing, smart cards and product identification: and UHF 868MHz favoured for the extended read-ranges within supply chain applications. Initially UHF RFID will be used on outer packaging and pallets.

As the technology uptake progresses and unit prices for RFID labels comes down, SATO expects item tagging to become economically viable.

Scanning difficult items

ALS says a wide range of industries will benefit from RFID equipment in terms of reduced inventory levels and improved asset utilisation, elimination of counterfeiting and easier product recalls. The company says it is keeping abreast of standards in the global frequency bandwidths available, protocol standards and hurdles associated with tagging and scanning “difficult” items such as metal cans and liquid product.

ALS will provide upgrade kits for users of some of their existing labelling systems, allowing them to write to smart labels with tags embedded.

Lost cost one-way tags

An RFID-enabled label printer has been launched by Etiquette. Nova RFID will allow production of combined human readable text, graphics, barcode and RFID tags in one self adhesive label.

This is ideal for low cost, one-way tags through supply chains. It also makes it possible to cost effectively introduce RFID tags into supply chains alongside existing barcode systems.

Designed for use for low cost, one-way tags through supply chains. It also makes it possible to cost effectively introduce RFID tags into supply chains alongside existing barcode systems.

Designed for use in outer case or pallet label applications, the NovaRFID machine is based on the Imaje Nova range of thermal image label printers. Continuous labels are fed through the Nova 6 RFID and Nova 8 RFID at 250mm/second. Labels come with an RFID tag embedded between the paper and the adhesive.

The passive RFID tag has the data written as the label passes through the printer, resulting in a traditionally printed label with an industry standard RFID tag under the surface. The high frequency tags to IS0 15693 operate at 13.56MHz.

We expect this new generation of combined RFID tag and label printers to be in demand as companies can now implement RFID technology without having to replace every piece of barcode equipment in their supply chain. This is the sort of cost effective solution which could really see RFID take off.

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