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"RFID isn't a technology-in-waiting," declares Tom O'Boyle, vice president, RFID Solutions, Miles Technologies, Inc. "There are standards in place for passive tag technology, and there are standards being established and reviewed for the active tag arena as well."  He assures that, "RFID is no longer a beta test anymore, either, as ‘real' RFID applications are being implemented every day."

However, he is concerned about RFID becoming a "catch-all" phrase for technology that "encompasses everything from short-range, non-battery, passive-type tagging applications all the way through to real-time, active tag with a battery location system."  Since the individual solutions are used quite differently, it is imperative for users to become familiar with the differences among them, and understand how to use specific technology to realize the appropriate benefits from their RFID investment, according to O'Boyle.  "People today are more educated on RFID than they had been," he acknowledges, "so their desires of what RFID can do versus what they think RFID should do have become more closely aligned."

RFID in the Warehouse

RFID technology applications in location systems, such as real time location systems (RTLS), are at work locating specific products within the warehouse and distribution center environments.  However, there's been a proliferation in the number of validation applications for the shipping area.

"The current number one application is validating product as it is being loaded into the truck," he offers.  "The industry practice calls for validating that the products on the shipping pallets or in the cases are the correct product for the correct order and on the correct truck," he explains.  "The process is typically linked into the WMS in most cases, and for others it's tied into the ERP."

The tags for the application are almost exclusively of the passive variety.  "The reason for the passive tags is that they will continue to flow though the supply chain as part of the load and are not removed once the load enters the truck," he explains.  "Active tags, on the other hand, need to be removed because it is too cost prohibitive not to reuse the tag over and over again."

RFID in the Yard

"Yard management is another area in which we see people wanting to deploy RFID," according to O'Boyle. "With RFID technology, yard management becomes a lot easier in finding trailers and moving them around."  For example, in a high-end yard management application, and by utilizing 802.11B base wireless-type tags, appropriately tagged trailers can be located within a distance of ten to fifteen feet. "We now have the ability to triangulate and find a specific trailer without having the driver tell us exactly where in the yard he dropped it," he explains.

In other applications, where "people want to walk before they run," they can start with an RFID solution in which a truck or trailer "checks-in."  Essentially, a heavy duty passive tag is attached to a vehicle, which is then driven through a reader at the gate entrance. When leaving the premises, it once again passes through a reader and the tag is typically removed to be reused.  "With this solution, we can tell when a truck enters, which gate it enters, and when it leaves the premises," he explains.

RFID for Compliance

The vast majority of RFID projects today are for internal improvement initiatives, says O'Boyle.  "We're seeing a slight push in the industry with the likes of Sam's Club invigorating on the compliance side for RFID, first at the pallet level and then at the case level."  However, the industry's reaction is somewhat different this time around.

"We're starting to see some people really think about taking that RFID mandate and pushing it into their manufacturing operations," O'Boyle explains.  "Instead of actually performing the tagging operation within the warehouse or DC and shipping it out to be compliant, many in the warehousing community are instead considering implementing the RFID operation on the production line.  Once the items are tagged in manufacturing, we can then start to install the RFID infrastructure throughout the supply chain to follow the flow of product, pallet and/or case throughout, thereby improving the process's visibility."

RFID and ROI

"ROI is the driving factor on whether you should implement RFID or not," he declares.  "We strongly advise that technology not be deployed because it is ‘cool' and ‘fascinating,' but because of the value that is derived from it."  The ROI is a calculation that has to happen pretty early within the process; obviously the harder the dollars are in the ROI, the better the chances the project will be approved.

However, O'Boyle cautions of a major misstep among many companies: they do not accurately estimate the total cost of the RFID implementation.  "They read articles about tag costs, but they never really have an appreciation of how much the infrastructure items to utilize the tags really cost," he notes.  Even with tag costs, there is often some misjudgment that takes place.  And O'Boyle warns: "There is no nickel tag. Unfortunately, we have not found any that could be viable from an end-use standpoint," he states.

"We see tag prices, for example, if you buy millions of smart labels, and they are at the lowest end variety, at about $.10 [each]," he explains.  "In reality, in most of our RFID applications, whether for work in process (WIP) visibility or inventory-type systems where we use a form of recoverable tag or slightly more hardened tags, costs can range from $.30 up to $8 in the passive world. For active tags the cost can range from $10 to $65."

Another element that is often overlooked is the need for software.  "Often people do not  understand that there's a software component that is required to catch all the tag reads, do the filtering appropriately, make certain business logic decisions (like turning on the green light for a ‘good' read), and log that event into a database," O'Boyle explains.  "All of that happens through some piece of software behind the scenes."

There's also a tendency to try to ‘game' the ROI.  "We find that people, in order to get the ROI they're looking for, are including processes like tool crib applications, vendor management inventory practices, personnel tracking and asset tracking, which often can use the same RFID infrastructure," he relates.  "Once the infrastructure is in, it can handle many different types of tags, conditions, and feed multiple databases."

O'Boyle cautions: "Even though your target applications may be a perfect fit for RFID, they may not be a large enough problem to be able to absorb the cost structure associated with an RFID solution."

RFID Project Tip

For those new to RFID, O'Boyle recommends "curbing your enthusiasm and starting slow."  For example, if you truly believe that the biggest issue within your organization is in the shipping area and in validating your pallets as they go out the door, then do just that.  "Don't try to implement everything at once, just aim at one small application. Get it down pat, make sure that everything's operating, and then expand," he advises.

Often those who do move fast and attempt to deploy multiple RFID solutions simultaneously find themselves eventually placing the entire technology project on hold because it has become too large or expensive to continue.

Another piece of advice he offers:  "You'll never get 100 % reads all the time, absolutely guaranteed, by using passive technology; and chances are only 50/50 you'll get it with active tags.  Come to understand that your system will never be absolutely perfect with zero tolerance defects. Therefore, plan to have redundancy or a back-up plan in place to make sure that you can recover from the event."

O'Boyle concludes: "RFID is going to be impacting different elements of your business, and it will begin to start literally living right alongside your bar code systems, voice systems, and your other automation technologies."

Media contact:

Warehousing Education and Research Council
1100 Jorie Boulevard, Suite 170
Oak Brook, Illinois 605234413

https://www.werc.org

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