Before I start, I would like to categorically state that I am a very big fan of RFID. Since 1995, I have been exposed to various methods of solving unique problems using RFID and I have been directly involved in RFID projects. Heavey RF  has a large range of RFID products to offer and has deployed RFID solutions to a number of companies in Ireland. Unlike most RFID providers, we have actually made money doing it.

So what’s the problem?

The problem is this – RFID simply cannot do what people expect it to do from the hype that has been generated over the last decade. It is not a magic wand that will tell you where all your products are in real time. It is not as reliable as bar-coding, and can never be as cost effective. While mankind frequently bends the laws of physics, we have never actually broken them which is what would have to be done if the technology were to be able to live up to the hype.

RFID describes a multitude of devices and components, but is generally understood as a technology that uses computer chips to store information. The beauty is that a lot of RFID chips or tags do not need power as they are charged by the emitted reading signal and respond according to the data programmed therein. The benefit in modern industry over conventional methods of tracking items, such as bar-coding, is that comparatively large volumes of data can be stored in a tag and line of sight is not necessarily required. The technology is being sold globally as a revolution that will eventually replace bar-codes. The hype is that if you are not on board, you will be left behind. Sound familiar? Remember the dot com industry in the late 1990s?

I compare RFID to the dot com industry because of the similarities that can be drawn between the two. RFID technology is around a long time, as was the internet before general adoption. Then, a huge perceived explosion in the dot com industry was generated around speculation, hype and a fear of not being part of a ‘new economy’ – a phase that RFID is currently in. When the dust settled and reality played its part, the dot com industry began a more sustainable and organic development – the next phase for RFID. I do not envisage that RFID will die a death – far from it, but I do argue that it will never replace the bar-code, and I also argue that it will never reach a level where all the products we buy in a ‘supermarket of the future’ are electronically tagged. It just isn’t viable, and never can be.

If you are an Irish company who does not have an RFID strategy, you have absolutely nothing to worry about. If it is ever legislated or mandated to you that you must have RFID in place in your company, you are actually better off waiting as long as possible to reap the benefits of the ongoing developments. (No RFID discussion is complete without discussing Wal-Mart’s’ mandate, and this paper is no different – more on that later…). Now is not the time to be developing strategies. Now is the time to learn about RFID, what it is, what it can do and more importantly what it can’t do. Only then can you make informed decisions about even having a strategy.

There are two core reasons why RFID will not succeed in replacing barcode technology – Technical restrictions and cost. As I type, I can almost hear the advocators saying – “cost is constantly coming down and will eventually be affordable” and “all technical difficulties can be overcome”. The old story about the Russians using a pencil in space springs to mind. Bar-codes are more reliable than RFID tags – a fact that if you do some basic research will turn up some surprising reading. (Some reports have read rates of UHF Gen II tags as low as 60% success at case level)

RFID tags will never be as cost effective as bar-codes. Ever. I state this in the same way that a helicopter will never be as cost effective as a motorcar. Sound bizarre? Think about it. The RFID advocators will tell you that bulk purchases will drive the cost of the tag downwards. That is like a helicopter manufacturer telling you that if everybody buys helicopters, the cost will come down to the cost of a car, and when that happens, you would want to have a helicopter because they have less boundaries, a better view and get you from A to B quicker. I do not want to get bogged down in the complexities of global helicopter adoption – I am merely making a point.

The auto ID industry set a benchmark a number of years ago that when RFID tags reached 5 cent, general adoption would be possible. I believe that the 5 cent tag in a useable form will never be possible. The 5 cent tag has been predicted based on the massive volumes that would be involved should global adoption take place. However, the big problem here is that there is no ‘one size fits all’, a factor needed to drive the volumes. In reality, there are hundreds of different RFID tag types. From short range, medium range, long range, LF, HF, UHF, 2.4GHz, 5GHz - all with different physical attributes depending on the product they are to be applied to. Because of the physical size of products (from very small to very large), their contents (foodstuffs containing iron or viscous materials), and the properties of RF technology, a large number of different tag types need to be maintained – splitting volumes. In the supply chain, RFID could only ever be effective if 100% readability was possible, which it isn’t. Anyone who tells you different doesn’t understand the technology. You cannot guarantee that all your current and future products will work with a particular type of tag.

In the USA, debates are still raging about which technology to use. Wal-Mart has stipulated a UHF tag, and other large pharmaceutical manufacturers have gone down a HF path, as it is better suited to their requirements. Now what happens if a company who was mandated by Wal-Mart to have a UHF tag suddenly receives a mandate from another company to have a HF tag? Everything has to be re-invented. Any barcode scanner worth its salt can read a whole range of barcode symbologies. Having two different tag frequencies from a reading perspective is like trying to listen to two radio stations at the same time – Try it and you will see that you will not be able to understand either.

RFID has many fantastic uses. I personally have two RFID tags on my key-ring and one in my wallet in the form of access control and the central locking for my car. They work, rarely let me down and I’m happy. Looking at the cost (€15 for my access control tag and a recent fee of €193 for my car key when my remote central locking actually stopped working) I would like to make the point that all three RFID tags I carry with me daily are completely different in terms of size, readability, radio frequency, data and proximity. This is because they are fit for purpose – I don’t want to have to be within 1 inch of my car to be able to open it, and I don’t want my access control cards opening doors from 50 feet away.

I have attended seminar after seminar over the last number of years, listening to the same lectures about how RFID is the future and that if you are not on board you will be left behind. I have not heard anything new in these seminars and most of them seem to focus on the biggest thing to happen to RFID in the last 10 years – Wal-Mart.

When your biggest customer says ‘jump’, you say ‘how high’. When Wal-Mart issued a mandate in 2003 to their top 100 suppliers to have RFID tags in place on their cases and pallet deliveries by January 1st 2005, RFID was put in the spotlight because the suppliers had no real choice. Indeed, these were exciting times - if this worked, then a global acceptance would surely follow and speculation of a technology revolution of gargantuan proportions was upon us.

Speculation involves taking a risk against the possibility of dramatic, astounding success. The Wal-Mart story has made RFID look like a sure thing. However, speculation is at its riskiest when it looks like a sure thing. Scratch the surface of the Wal-Mart progress and a very different picture to the reported successes emerges. The Wall Street Journal wrote a piece about how RFID in Wal-Mart was failing, which was quickly disputed by Wal-Mart, but no real defence was produced in terms of facts or figures or indeed the much sought after return on investment.

On paper, the numbers may add up for Wal-Mart (after all, they are not paying for most of it…), but suppliers are not seeing a return on investment. Some are more outspoken than others, but hey, are you going to criticize your biggest customer in public? To date, not one of the Wal-Mart suppliers utilizes RFID for any other customer. There is also the danger that other customers issue different mandates with different non-compatible requirements and the RFID headache gets twice as bad for many suppliers.

Irish companies are being advised by systems integrators and standards bodies to implement RFID now to avoid being left behind. I would advise Irish companies to hold off implementing RFID unless it can be demonstrated that it is fit for purpose and a return of investment can be obtained by the carefully planned change of processes. Why implement RFID for the sake of it? If a company is issued a mandate to have RFID on products, then this can be implemented at the back door without huge costs of implementing RFID throughout an operation. Irish companies and industries are comparatively small on a global stage and as such will always find difficulty realizing benefits that have been identified in the supply chain in larger countries. For example, there is a proven use of RFID in large bulk storage warehouses with no racking. However, when I explored the possibility of implementing such a solution in one of the largest bulk storage warehouses in Ireland, it never got off the ground as the scale of the operation was just not big enough to warrant it.

Why do I feel the need to write this? Because I actually believe in RFID as part of Heavey RF’s future. I have predicted that as much as 20% of Heavey RF’s business could be RFID related over the next 5 year period complementary to our existing bar-code and voice-directed work. We have some extremely advanced RFID products and software and some very innovative ideas where we can offer productivity, accuracy and competitive advantages. However, the bigger the hype that is generated, the more sour the taste in the mouths of would-be customers at the mere mention of RFID in the future. I want people to understand that RFID has a place in Irish industry, but a very different place to what is currently being portrayed.

RFID technology in 95% of cases presented to me would be technology for technology’s sake. I have had customers question why I have not brought this ground breaking technology instead of bar-coding to them to reduce costs and improve accuracy only to scratch the surface and be thanked by them afterwards for saving them from a big mistake. RFID can produce some real benefits when deployed correctly and professionally in a closed loop environment. There are many considerations in making an RFID solution work properly which can increase the costs by multiple factors – a fact that has caught a lot of people out. A proper cost analysis must be performed and the numbers have got to stack up before any decision to deploy RFID should be taken.

Given that bar-coding still hasn’t been fully deployed after 40 years in the supply chain, I find it hard to accept that this much more expensive, infinitely more complicated and not yet mature technology is going to be any different. Given the last 15 years of what is effectively an RFID failure in the supply chain, insist in seeing a proven working solution before taking what is ultimately a big leap of faith. History is littered with large technical blunders – RFID in the supply chain could be one of the biggest….