Radio frequency identification technology has been around for years, but it has never lived up to its hype.
As implementation costs go down, however, there are specific applications, including asset tracking and supply chain automation, where RFID technology makes sense, says Rebecca Wettemann, an analyst at Nucleus Research Inc. in Wellesley, Mass.
"There was a lot of excitement about RFID for a while, and then people took a step back and asked, 'Is this really ready for prime time?' in terms of being cost-effective and in terms of being a better alternative to the bar-code and scanning systems," says Wettemann. "As tags get cheaper and the infrastructure to manage all of that data gets cheaper, there are other areas where RFID makes sense, including in the retail environment."
Companies are also implementing RFID technology to track assets within their own walls or in their parking lots, says Louis Sirico, an analyst and chief technology officer at Silver Spring, Md.-based RFIDSwitchboard, a Web portal that offers companies information about deploying RFID technology.
Sirico, too, sees RFID becoming much more ubiquitous as costs decrease.
"I see RFID tags being built into assets; so it's not a question of tagging something, but there's already a tag built into the product," Sirico says. "I see that already starting to happen. The primary barrier is cost, but as volumes increase, more and more companies will start using it because its benefits can lead to ROI. As demand increases, the products are going to become better and less expensive."
Costs for passive RFID tags have dropped dramatically, Sirico says. In 2000, passive RFID labels cost about $1 each; now they go for less than 20 cents. The price of active tags has also decreased, from $75-$100 to $15-$20, he says.
Global container shipping company APL Ltd. is using the active RFID, real-time locating system and marine terminal software from WhereNet Corp. to track assets in its 300-acre Global Gateway South terminal at the Port of Los Angeles.
"The ability to find something on that 300-acre site is critical to our ability to service our customers because ... they want to know which container is in which parking stall out of the 8,000 or 9,000 parking stalls we have," says Nathaniel Seeds, director of port operations at Oakland, Calif.-based APL.
The WhereNet technology replaces tracking equipment that had been used to scan each row of containers since the facility opened in 1997, Seeds says. Using the old system, finding a container could take upward of three hours, he says.
"I describe that inventory system as 'Park it now, find it later,'" Seeds says. "But over time, as the business grew, it didn't respond quickly enough to the new pace of the operation."
Looking for Options
So APL began to explore alternatives, including GPS-based technology, motion-sensor-based systems and RFID, ultimately settling on the WhereNet system because it enables APL to immediately locate its inventory in real time and is cost-effective -- although Seeds wouldn't provide specific figures.
APL affixed WhereTag transmitters to more than 30,000 chassis, which store the containers, and to its entire inventory of terminal trucks. A local infrastructure of more than 80 wireless WhereLAN locating access points and WherePort devices at 12 entry and eight exit gates enables the system to automatically recognize when a chassis is entering or leaving the facility, Seeds says. The system provides real-time tracking of each on-site chassis and automatically updates the chassis location when it is parked, he says.
Now, when a container is unloaded from an APL ship and placed onto a chassis, a clerk ensures that the IDs of the container, chassis and yard tractor are entered into APL's terminal operating software. A yard tractor driver then transports the container and chassis into the yard. The yard tractor is equipped with sensors, and when it disconnects from the chassis, the location of the parking stall where the associated container has been dropped off is immediately recorded.
"WhereNet's deployment at APL's terminal in L.A. was the first deployment at a marine terminal anywhere in world, so we were sort of building this as we went," Seeds says.
Even so, implementation was pretty painless, he adds. APL knew that the core technology -- active tags and the DTOA (differential time of arrival) location algorithms -- would be functional, but Where¿Net had to develop some new location algorithms specifically for the APL site, Seeds says.
"So there were some engineering issues from WhereNet's side -- like how to trigger the sensors on the tractors and how to write the algorithms so we would locate a chassis that was moved from one space to another by something other than a sensor-equipped yard tractor," Seeds says.
Although the project has yielded a return on investment, Seeds says the purpose of the implementation was to improve customer service.
"Our focus is on the customer," he says. "We wanted to make our customers' experience as good as it can possibly be. We didn't do this to cut costs, but to improve the efficiency of the operation. We would have still done it had we not saved a dime."
Although it would be better to put the tags on the containers rather than on the chassis, that probably won't be happening very soon because there is so much disagreement in the industry about the best technology to use, says Robert Foppiani, an RFID analyst at ABI Research in Oyster Bay, N.Y.
"So what WhereNet is doing is tracking the chassis that hold the containers, which means it's the handling equipment that's being tracked, not the equipment itself," Foppiani says. "So the whole issue is, they want to move these containers as little as possible because the more they move them, the more time is wasted and the more it costs. So being able to monitor [the chassis] at all times and what containers they're handling helps improve efficiencies at the ports and terminals."
Reality Check on Drugs
Pfizer Inc. is using an RFID application to prevent the counterfeiting of the drug Viagra.
"Because of customer mandates and regulatory requirements to deter counterfeiting, we decided we'd put RFID tags on all cases, bottles and pallets of Viagra being distributed in the U.S. that started shipping in 2005," says Peggy Staver, director of trade product integrity at the New York-based pharmaceutical company. "We enabled an authentication service in January of 2006, which means that others in the supply chain that have the necessary infrastructure -- readers, antennas, computers -- in place to be able to read the RFID tags and are able to confirm back through a secure Pfizer Web site the authenticity of the electronic product code number that it is issued by Pfizer."
It took nine months to get the system ready to roll out, says Paul Greene, senior director of drug product automation for Pfizer global manufacturing, who was the leader of the team responsible for integrating the RFID technology into the company's existing systems.
The RFID system consists of technology from SysTech International, TagSys USA Inc., Alien Technology Corp. and SupplyScape Corp. Cranbury, N.J.-based SysTech is providing its TIPS (Total Integrated Packaging Solution) system, which manages all packaging line devices. Among other things, TIPS encodes and records EPC serial numbers to the RFID tags and redundant bar codes (a bar-code system is used as a backup to the RFID system).
Cambridge, Mass.-based TagSys is supplying high-frequency (13.56-MHz) item-level tags and readers. Morgan Hill, Calif.-based Alien provides ultra-high-frequency tags. And Woburn, Mass.-based SupplyScape is providing its RxAuthentication service to confirm that a package received by a pharmacy is an authentic product from Pfizer.
Greene says the integrated system is designed to work like this: First the TagSys technology marks each Viagra bottle with a unique RFID-enabled product identification tag that captures information at the individual item level. Then the SysTech system verifies all the data on the RFID tags and bar codes and establishes a parent-child relationship that ties the individual bottles of Viagra to the cases and pallets. The cases and pallets are equipped with ultra-high-frequency tags from Alien Technology -- and the information the tags contain is stored in a secure database. The SysTech software then makes all the data available for the authentication and other business and track-and-trace applications. The system handles all the real-time packaging-level business processes, including managing rejects, reworks and quality assurance functions.
Once compiled in the SysTech system, the individual drug information is exported to SupplyScape's software, which operates with supply chain partners' applications to manage drug bottle authentication as the packages are passed throughout the supply chain.
"This hadn't been done before the way we wanted it done, so we were doing it from scratch, basically," Greene says. "While doing this, we discovered that RFID middleware companies that were popping up all over place weren't ready to do this at line speed in real time, so we found that everything we needed to do in the line could be done by a more traditional line-control system vendor like SysTech, so they upgraded an existing system."
Currently, the system encodes 120 bottles of Viagra per minute, Greene says.
"It takes 400 milliseconds to do a read/write action, so maybe you can't do 300 per minute, even though that's what we wanted them to do," he says. "And there's also the issue of the tags not being as reliable as they need to be, so misreads and miswrites still occur. We need the next generation of technology to reduce the reject rate and increase the speed at which we can do it."
Using RFID to track Viagra makes perfect sense for Pfizer, says Wettemann. "We see people tending to adopt RFID more when whatever they're tracking has a higher cost," she says. "Counterfeit Viagra is a huge financial issue for Pfizer and a liability as well, so it may make sense for them to track that stuff more effectively."
Although the system is a powerful one, Greene says that until everyone up and down the supply chain installs the required infrastructure, Pfizer can only do so much.
"No one can read any of this stuff -- there are a lot of parties in the supply chain, but who's going to pay for the installation of all the readers and portals, all that stuff that needs to get put in place?" Greene says. "All we can say is that we shipped the product from a Pfizer facility to a particular Pfizer distribution center to a particular wholesaler. But from there, [the supply chain partners] are on their own, because they don't have all the necessary equipment installed so they can get the [pertinent information]."