RFID – watch this space

by Press Release on 2011-03-21 06:02:57

What would life in the 21st century be like without the Internet?  I predict we will be asking ourselves the same question about RFID in 15 years’ time.

For anyone not yet familiar with the term, RFID is “radio frequency identification” – digital technology that uses tags, readers and radio signals to automatically identify and describe any object you care to name. RFID will revolutionise how supply chains and retailing work in future. It will take over from the bar code eventually as a fast, efficient and seemingly indispensable means of identifying, tracking and tracing products, assets and any other object that can be tagged. Who could imagine life as a retailer or supermarket shopper without bar codes ...even as far back as 20 years ago!

This might sound a fanciful claim for RFID, particularly in New Zealand where the technology has little or no public visibility yet. But there is no reason to believe this country will not follow – and perhaps even lead in some industries – a global shift to RFID in everyday life and commerce. The cost savings, efficiency gains and opportunities for competitive advantage will become to great to resist and ignore.

When the individual identity of cartons, pallets and/or containers (with information about their contents) can be remotely read in a distribution centre, cool store, ship hold or elsewhere, the logistical efficiencies are easy to imagine. Share that data online and you have the potential to track and trace items right along a supply chain, even globally and in real time. When RFID tags are attached to items of clothing, electronics goods or any other consumer product, there are huge potential benefits to everyone in the retail marketplace.

Of course RFID can also have a vast range of uses in the provision of public services, infrastructure maintenance, defence systems and so on. Ultimately it can raise visibility, management capacity and choice in every realm of society, especially when linked to that already-established indispensible technology – the Internet.

RFID’s potential has plenty of recognition among business leaders and future thinkers worldwide. And there is plenty of evidence that 2011 will be a year of progress on many fronts. In the US, for example, retailing giant Wal-Mart will be taking the technology right through to the consumer with item-level tagging of men’s clothing.  Wal-Mart was the first major retailer anywhere to embrace RFID when it required the tagging of pallets in its distribution centres five years ago.

Other major retailers in North America and Europe have their own RFID programmes, mostly using the EPC (Electronic Product Code) global standard for encoding identification and other data on tags and in information systems. Global standardisation is absolutely fundamental to RFID for two reasons: It enables the global sharing of meaningful data and it brings down costs.

Gerry Weber International AG, the big German apparel maker and retailer, is another great example of what is just round the corner. This year, it will start placing EPC/RFID tags on 25 million garments sold through its 340 stores and other outlets: The tags will be read in the storeroom and at point-of-sale with many logistical, customer service and anti-theft benefits.  “In our opinion, there are no question marks about the future of RFID,” Gerry Weber’s chief information officer said recently.”We have seen overwhelming interest in what we’re doing from our suppliers, from our points of sale, from IT companies, from other apparel companies and more. RFID has a bright future in the apparel sector.”

As more big companies take up the technology – and apparel is just one of many sectors – the demand for EPC/RFID tags will rise and with this, their per-unit cost will fall. Tag prices around US5 cents have long been seen as necessary for mass take-up at product level. In 2011, the world will move much closer to that tipping point in consequence of rising demand from Wal-Mart, Gerry Weber and others, and of improved tag design and manufacture, mostly in the US and China.

On another front, the linkage of RFID to the Internet becomes ever more robust and reliable. RFID adopters around the world have the EPC Information Services (EPC IS) protocol for the uploading and access sharing of data captured from tags and held on a computer system anywhere (regardless of operating software differences). ECP IS is break-through technology in itself, enabling RFID to really deliver on its potential over the coming years.

So, what about New Zealand? We have no high-profile retailer programmes under way, but there is plenty of movement on RFID. Last year saw a successful proof-of-concept trial on the use of EPC tags and EPC IS in the meat industry: ANZCO and GS1 New Zealand used the technology is track and trace meat products from a Canterbury farm, through a processing plant and ultimately to a retail store. It is a taste of things to come, especially as this country moves to adopt individual livestock identification and traceability in the beef and deer industries. The latter initiative, with Government backing, is well underway and it will involve the widespread take-up of RFID technology on farms, in saleyards and meat works from later this year.

In the kiwifruit industry, one of the largest pack house cooperatives recently completed its third export season using EPC/RFID to track and trace pallets of fruit in busy cool stores. The example set by Eastpack continues to attract big interest at home and from abroad for its proven logistical benefits.

Watch this space for other companies and industry sectors in New Zealand’s to start embracing EPC/RFID in the coming years and the business cases begin to emerge.  

The government took an important, but little acknowledged, step to facilitate this and much more with a re-allocation of radio spectrum during 2010.  In simple terms, the re-allocation creates more space for ultra high frequency (UHF) RFID which is exactly the kind needed for effective EPC application.  Communications and IT Minister Steven Joyce could see the merits in better enabling “emerging technology” , which is how RFID is described in officialise.  We will all benefit as time goes on and as EPC/RFID gains momentum in supply chains and retail outlets the world over.

By Gary Hartley, General Manager – Sector Development for GS1 New Zealand