Expert: Invest in RFID Now

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Companies that wait for RFID tag prices to fall to less than five cents will be left behind, says Spectra Consulting's Philip Calderbank.

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June 24, 200 — Philip Calderbank got involved with RFID in 1996, when his employer, Sensormatic, provided RFID badges for athletes at the Atlanta Olympic games to control access to the various sports stadium and the Olympic Village. He was so impressed that he made RFID the focus of his career. He later joined Global ID, an RFID system integrator based in Switzerland. Last October, he started Spectra Consulting, which has offices in the U.K. and Jacksonville, Fl.

Calderbank has advised retailers and manufacturing companies on RFID technology and implementations. He spoke with RFID Journal editor Mark Roberti recently about the state of the market, the Auto-ID Center and other key issues facing companies that are considering investing in an RFID system. Here are excerpts from that interview.

RFID has long been the technology that’s about to take off and never does. Is that still the case?

The industry has made some good progress in last six months in particularly. The Auto-ID Center has brought together top companies. We’re seeing companies like Chep International, [which supplies millions of pallets to manufacturers,] getting involved in partnerships with companies like Marconi InfoChain and Intermec to drive some tests. That will stimulate the market considerably.

Over here in the U.K., two major retailers — Marks & Spencer and the Woolworth group — have begun to introduce RFID, which again is a big stimulus to the market. Over the next two years, Marks & Spencer is putting 3 million tags on containers for moving frozen foods is a substantial statement. It’s in those areas, in retail particularly, where the market is starting to move.

What’s your view of the Auto-ID Center’s attempt to create a global network for tracking individual items using low-cost RFID tags?

The Auto-ID Center could be misleading end-user customers in the sense that their vision is good, but their application of that vision is misleading. They tend to recommend future technologies as opposed to existing technologies. The end user doesn’t always know the difference between the two.

I hear statements about item tracking with a tag that costs less than 5 cents. That’s not practical today and it may take two or three years before any company gets anywhere near that sort of price. The companies that are talking about that today are only in the first stage of test. They aren’t even at the prototype stage.

Can companies implement RFID systems today while preparing to adopt a system like the one the Auto-ID Center is proposing three to five years down the road?

Systems introduced today can be integrated with any future systems that are developed, but the integration comes at a cost. You will need new readers. But anybody waiting today is missing opportunities. Marks & Spencer isn’t waiting. But they aren’t applying tags to individual items. They are tagging totes, crates and pallets. That is really where the market is going to be in the next few years in the supply chain. Don’t put the whole program on hold. Companies that continually wait for the five-cent tag are going to be left behind.

Is there a business case for putting tags on pallets, instead of using bar codes?

I know of an automaker that is tracking pallets with boxes of tools, parts and other metal items. They want to load up a pallet with a number of crates, drive it through a portal and get an immediate read of what’s on the pallet. With bar codes, it’s very slow because you have to reach each label separately.

And bar codes have to be printed and applied and read. Someone has to do all that. So bar codes are not free. There is a cost that is already there in the supply chain. RFID is more expensive but carries so much more value because the data can be updated as the product moves from point to point.

The Auto-ID Center is promoting a system where only a unique serial number will be stored on the tag. Others say you have to carry data on the tag. What is your view?

I’m not a great advocate of the license plate concept for RFID. One of the main benefits of an RFID chip is that it can contain data. If you are moving product from place to place, in order for information about the product with license plate to be shared, you need compatible software systems. Auto-ID Center would say you just communicate via the Web. I’m sorry, but that is not going to happen just yet. There are too many problems communicating over the Web for that to be a practical solution.

Don’t you need standards to share data stored on the tag?

The standards are coming, and they will come faster because they have been worked on for a number of years. EAN and UCC are working very hard on the GTag and ISO18000 standards. The standards will be there and that will help adoption considerably. As a bridge to that, companies like SAMSys are helping out today with their universal readers which can overcome some of those standards issues today.

So companies should be thinking about tracking pallets now so they are ready to track items in, say, five years?

Absolutely. Will the system that reads the pallets today be the same system that reads the items? The answer is no, but it doesn’t matter. The item-level system will be integrated into the same network. That’s key.