Sep 07, 2014I was at a social gathering recently when I ran into an acquaintance whom I've known for almost 20 years. "Still betting big on RFID?" he asked. I said I was. "Your blind faith in this technology is admirable, but did you ever consider the possibility that you might be wrong? I mean, lots of people thought we'd see cold fusion and flying cars by now."
I chuckled. My conviction that radio frequency identification will benefit companies and individuals is not based on blind faith. I'll explain why in a moment, but yes, I have considered the possibility that I might be wrong, or at least that there might be obstacles to adoption so great they cannot be overcome, or that an alternative technology could make RFID irrelevant. And I continue to consider that possibility. Not doing so would constitute negligence as the head of a company whose sole focus is on RFID.
My conviction that RFID will be an incredibly important technology is based on the fact that there is a tremendous amount of waste in the world, and there is no other technology that can cut that waste. Consider these facts:
• A recent report released by the U.S. Department of Agriculture's Economic Research Service stated that in the United States, 31 percent—or 133 billion pounds—of the 430 billion pounds of the available food supply at the retail and consumer levels in 2010 went uneaten. The estimated value of this food loss was $161.6 billion using retail prices. And the United Nations' Food Programme estimates that 50 percent of all food produced globally is never consumed. A large part of the problem is that food goes bad due to inefficiencies in the supply chain.
• Shrinkage in the United States alone costs retailers $32 billion annually, according to a recent National Retail Security Survey. A large portion of this is due to employee theft, administrative error and vendor fraud.
• Hospitals lose an estimated $5,000 per bed annually in equipment, according to a McMaster RFID Applications Laboratory study, and nurses spend roughly an hour per week searching for hospital equipment.
• Thirty million passenger bags are mishandled each year by airlines, costing the industry $3 billion.
• Seven percent of containers used to transport automobile parts for assembly are replaced each year, while 36 percent of respondents to a Joint Automotive Industry Forum survey said they experienced operational downtime due to lack of containers.
I could go on, but you get the point. Is it possible that this waste will never be addressed? I don't think so. The global economy is too competitive, and there is simply too much money to be made if companies find a way to eliminate waste.
Is there another technology that can make a huge dent in the waste? I would be doing our readers a disservice if I claimed that RFID was categorically the answer to all of their inefficiencies. Other technologies—used alone or in conjunction with RFID—can deliver benefits as well. GPS, 2-D bar codes and video all have a role to play in reducing waste and boosting efficiencies. And, of course, data analytics is very important.
But as I see it, RFID will have the biggest impact on waste and inefficiencies. GPS has its limits. It can only be used outdoors. It's too expensive and bulky to track, say, a shirt or a small parts container. 2-D bar codes require that a person orient each bar code to a scanner, and labor is very expensive. Even if creating algorithms enabling computers to interpret videos becomes cheaper and easier, video cannot tell you that there is one pair of jeans missing from a closed box, or that there are no medium shirts on a shelf, or that one of a hundred black suitcases needs to be diverted to a flight headed for Dubai.
RFID can't do everything, and it is not a panacea for all business problems and poor execution. But like the Internet, it enables companies to do things never possible before, and it will deliver transformational change over time.
Are there deployment obstacles that cannot be overcome? I don't think there are. It might never be possible to read every tag every single time due to the laws of physics, but throughout the 13 years I've been covering RFID, I have never seen an issue that can't be overcome with good system design. Many years ago, when passive ultrahigh-frequency (UHF) tags could not be used in the presence of water or metal, I believed RFID firms would develop innovative products to get around those challenges, because they could make money doing so. That faith was born out. We now have companies tracking slabs of steel and pallets containing cases of water bottles.
Having been at this for more than a decade, I am more convinced than ever that RFID will become ubiquitous. Nothing I have witnessed would suggest otherwise. So you can call my conviction well-informed faith.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.
