Home Internet of Things Aerospace Apparel Energy Defense Health Care Logistics Manufacturing Retail

Top 10 RFID Trends of 2006, Part 3

This article is the last of a three-part series looking at the top ten trends in RFID over the past year. Today's article looks at trends 3, 2, and 1, those that RFID Update considers the three most important trends of the year.
Dec 21, 2006This article was originally published by RFID Update.

December 21, 2006—#3 - Pharma Fits and Starts
Tracking individual bottles of expensive, high-volume drugs has long been considered the low-hanging fruit for item-level RFID tagging. The pharmaceutical supply chain is highly fragmented, full of mom-and-pop wholesalers and distributors. Opportunities are rife to siphon off shipments of expensive drugs for resale on the black market, costing the industry billions annually. Worse, introducing bogus drugs into the supply chain, also easier than it should be, can have a far graver cost than dollars: human lives. For these reasons the US Food and Drug Administration has advocated RFID as a technological salve to pharmaceutical supply chain security, though it has never gone as far as mandating the technology's usage.

This year saw RFID adoption by the pharmaceutical industry take a few steps forward, then a step or two back. A handful of major pharmaceutical manufacturers and distributors began piloting or deploying the technology. Pfizer shipped RFID-tagged Vi*gra, and GlaxoSmithKline tagged the HIV drug Trizivir. Cardinal Health launched an end-to-end supply chain pilot, and pharmaceutical packaging giant O-I introduced a solution that allows pharmaceutical manufacturers to embed RFID tags within drug bottles.

While these developments are all positive, they don't cumulatively amount to the level of progress hoped for and expected by many at the top of the year. Furthermore, in the last couple months there have been two sobering developments. First, the results of Cardinal's pilot proved mixed, leading a company spokesman to conclude, "While our pilot demonstrated that using UHF RFID technology at the unit, case, and pallet level is feasible for track-and-trace purposes, a great deal of additional work needs to be undertaken by stakeholders across the industry to address significant challenges. Until those challenges are addressed, direct distribution of medicine continues to be the best near-term approach to maintain the highest levels of security and efficiency in the pharmaceutical supply chain."

Second, just two weeks ago a US federal judge issued an injunction that lifts an FDA-mandated pedigree requirement for drug shipments. While RFID had not been a requirement for the pedigrees, industry observers agreed that pedigree enforcement generally was a positive step toward the ultimate adoption of RFID-based e-pedigrees. With the FDA pedigree requirement now postponed, momentum behind RFID e-pedigree adoption may be slowed.

Despite these setbacks, the argument for pharmaceutical-tagging remains largely unchallenged. Also, according to sources, more positive announcements are expected in early 2007.

Related articles:
#2 - Gen2 Delights
EPCglobal's Gen2 standard was ratified at the end of 2004, but it wasn't until this year that vendors brought Gen2 products to market in meaningful volumes. The improved performance of these products over their Gen1 predecessors is, according to nearly everyone, dramatic.

Early positive reviews came from RFID solutions provider ODIN technologies with the January release of its Gen2 tag benchmark, which reported strong performance by the evaluated products. Later in the year, Wal-Mart made a number of public statements about the "step change" in performance from Gen1 to Gen2. Procter & Gamble vice president Richard Cantwell said in his keynote at the Baird RFID investor conference that Gen2 "is significantly better than Gen1" in P&G's experience. When ODIN last month came out with a second tag benchmark, chief operating officer Bret Kinsella told RFID Update that the company had observed improved performance in Gen2 tags even since the January benchmark.

Many believe that Gen2's strong performance could finally vault RFID adoption out of the "science project" phase. The news is only expected to get better as competition heats up among the RFID chip providers. Recall that Impinj's year-long reign as sole Gen2 chip provider ended this fall, as Texas Instruments, STMicroelectronics, NXP (formerly Philips), and Alien all rolled out competitive Gen2 chip offerings.

In addition to being roundly praised all year long, Gen2 received another major boost in July when it was officially incorporated into the ISO standard for passive UHF RFID. While largely a formality since the standard already included a very similar specification, the official ISO designation cemented Gen2 as the global standard for passive RFID.

Related articles:
#1 - The Industry Itself
No annual wrap-up would be complete without stepping back to take stock of the industry itself. Since the Wal-Mart and US Department of Defense mandates of 2003, the industry has been waiting and hoping for the so-called tipping point, the moment at which adoption reaches enough critical mass among early adopters to induce the mainstream to follow suit. Demand for the technology spreads rapidly, and the rising tide lifts all boats.

Needless to say, this moment did not come in 2006, and probably will not in 2007. But rather than dwelling on the negative, it is reassuring to observe just how far the industry has progressed in a short amount of time.

In 2004, even before the RFID hype had subsided, there was already industry acknowledgement that widespread adoption faced a number of obstacles. The oft-cited examples were nonexistent standards, intellectual property disputes, poor technology performance, privacy concerns, and lacking ROI. Of this list of five, it is safe to say that three have largely been overcome, and that a fourth is getting there. Gen2 is a successful, effective standard upon which an ever-expanding marketplace of products is based. It has also demonstrated very robust performance gains that will render obsolete the extensive tinkering needed to make early pilots behave.

As for intellectual property, Symbol and Intermec settled their disagreements, and many vendors have signed on to Intermec's licensing program. Additionally, the RFID Consortium aims to facilitate IP licensing via a patent pool model that has proven successful in other technology industries. (As an aside, Alien sued Intermec earlier this year, bringing IP concerns momentarily back to the fore. But since June there have been no major developments, and the industry seems to have reacted with a shrug.)

The public consternation over privacy has not fully abated, but there has been solid progress. The industry has engaged the issue more actively and responsibly than a few years ago, when it seemed to hope the concerns would just go away on their own.

That leaves ROI -- or lack thereof -- as the intractable puzzle still begging for a solution. Unfortunately, there appears to be no silver bullet. It will require a combination of falling prices, business case discovery, and developments in data analytics. But the good news is that at the end of 2006, industry focus is trained squarely on this issue. Judging by past success, there is every reason to believe that the collective effort of the industry will soon overcome this obstacle as it has the rest.
  • Previous Page
  • 1
  • Next Page

Login and post your comment!

Not a member?

Signup for an account now to access all of the features of RFIDJournal.com!

PREMIUM CONTENT
Case Studies Features Best Practices How-Tos
RFID JOURNAL EVENTS
Live Events Virtual Events Webinars
ASK THE EXPERTS
Simply enter a question for our experts.
TAKE THE POLL
JOIN THE CONVERSATION ON TWITTER
Loading
RFID Journal LIVE! RFID in Health Care LIVE! LatAm LIVE! Brasil LIVE! Europe RFID Connect Virtual Events RFID Journal Awards Webinars Presentations
© Copyright 2002-2016 RFID Journal LLC.
Powered By: Haycco