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RFID Practices of Manufacturers and Retailers Diverge

ARC Advisory Group's Chantal Polsonetti argues in this guest column that manufacturers should not necessarily emulate the RFID deployment practices of retailers but instead forge their own techniques that may include flexible RFID readers rather than fixed and moving beyond the use of printer/encoders.
May 17, 2006This article was originally published by RFID Update.

May 17, 2006—Manufacturers who have followed the progress of EPC RFID, due either to compliance requirements or pursuit of internal ROI, are likely familiar with the original vision of RFID as an "Internet of Things." Inherent in this vision is the need for ubiquitous, automated data acquisition via a largely fixed infrastructure and, in a supply chain context, transparent availability of clean data from all parties. All players acknowledge that the timeline for this vision is some time off. However, many of the elements of the original vision have already fallen short in the first round of implementation. This has left manufacturers to search for alternative physical layer solutions that meet their own requirements versus those of the retailers.

From Fixed to Flexible Reader Architecture

One of the most visible areas where manufacturers are ramping back from the original EPC RFID vision is in the area of fixed versus flexible reader architectures. Fixed architectures, particularly in the form of dock door portals that could seamlessly read tagged cases as they pass in and out of shipping and receiving doors, were a core element of the original vision. This scenario, more appropriate for retailers, has proven to be a bad fit for manufacturers faced with the prospect of outfitting a double-digit number of doors with expensive fixed reader portals, particularly given the slow pace of the rollouts and the limited subset of production involved. Manufacturers are instead finding that they "can't hardwire everything," whether a dock door portal or other fixed reader infrastructure, and are instead opting for more flexible architectures.

One of the more popular current flexible alternatives to the originally-envisioned fixed architecture is the forklift or clamptruck-mounted reader. As their name implies, these readers, now offered by several reader manufacturers, are mounted directly onto forklifts or clamptrucks. Forklift mount readers not only eliminate the need to hardwire everything, but they also enable the reader to be brought to the product rather than the costly vice versa. Some manufacturers are retrofitting their existing forklift operator terminals to include RFID readers, which can still offer automatic reads in this form factor, while innovative suppliers such as Intermec and partner Cascade are designing integrated forklifts. Wal-Mart itself is currently piloting a forklift reader option at select Sam's Clubs for use when transporting goods in the backroom or onto the sales floor.

Eliminating Printer/Encoders

Most manufacturers subject to tagging mandates are using RFID printer/encoders to print labels and, in some instances, high-speed label applicators with embedded printer/encoders to automate their tagging operation. A number of manufacturers we spoke with recently are now setting out to eliminate the need for these printer/encoders because of the production bottleneck they represent, the frequent need for updates, and the overall problem of printing and applying labels in a production environment. These frustrations have sparked renewed interest in the potential of embedding tags in the corrugate packaging and either encoding them on the line or using preprogrammed tags. To this end, Texas Instruments and Smurfit Stone recently demonstrated a prototype with Gen2 straps connected to conductive antennas printed on corrugate boxes. This has captured the attention of a number of manufacturers due to its potential to eliminate the need to print labels and place them on boxes.

As these examples indicate, manufacturers who are retail suppliers should discern between EPC RFID developments that relate to manufacturers versus retailers and focus on strategies that make sense for their manufacturing and distribution operations. Reducing the cost of both tagging and reading/verifying tags through scalable automated processes that integrate seamlessly with production operations should be the goal as tagging requirements escalate.
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