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Cold Chain Heats Up RFID Adoption

Tracking goods with sensor-equipped RFID tags could revolutionize perishable-item transport by slashing spoilage-related costs.
By John Edwards
Apr 01, 2007—Mike Nicometo is a cool guy. He has to be. As global information systems director of Cool Chain Group, a third-party logistics provider located in Bremen, Germany, it's Nicometo's job to ensure that a variety of perishable goods stay nice and cool as they travel by road, sea, rail and air. "We're building a global network of freight forwarders dedicated to temperature-sensitive products," he says.

Temperature control is at the heart of Nicometo's work, and RFID promises to become an important tool in his company's mission to assure customers that their products will never be exposed to excessive heat or cold. Nicometo believes that sensor-equipped RFID tags—with their ability to continuously and seamlessly monitor an item's temperature throughout its journey from grower to customer—mark a major improvement over existing temperature-monitoring technologies, such as digital data loggers, time temperature indicator (TTI) labels and chart recorders.

Ensuring that shipments stay at or near a specified temperature is a priority for companies operating in the cold chain.

Specialized RFID monitoring tags promise to revolutionize the shipping and handling of a wide range of perishable products—from food to pharmaceuticals. By shifting environmental monitoring from trailer-, container- and warehouse-mounted devices to individual pallet tags, RFID will give suppliers and distributors continuous and accurate readings throughout the distribution process. "It will permit in-transit monitoring of goods at a level of granularity that's much better than the single-point, whole-load environmental logging devices that are in common use today," says Chris Hook, a cold chain technology analyst at Deloitte Consulting.

Precise, frequent and automated readings, interpreted by software and coordinated with existing and planned product inventories, should translate into more intelligent goods management and fewer rejected shipments, says Bill Hardgrave, director of the RFID Research Center at the University of Arkansas. "The benefit is the visibility it gives you all along the supply chain," he says. "You can see, in regular time increments, what's happening with the product, whether it's temperature, humidity, shock or vibration."

Cold Facts
Ensuring that shipments stay at or near a specified temperature is a priority for companies operating in the cold chain, where deviations of only a few degrees can lead to spoiled goods and thousands of dollars in damages. While most cold chain players strive to keep their products chilly, the market actually covers items requiring a variety of special environmental conditions. "Cold chain means anything requiring a controlled environment," says Hardgrave. "It could also be something requiring hot temperatures or high humidity or low humidity—but it all gets lumped under the cold chain umbrella."

While its name may be somewhat misleading, a growing number of businesses are beginning to view the cold chain as one of RFID's most promising frontiers. Hardgrave says there's a growing business case for cold chain RFID. "Fifty-six percent of all shrinkage in a supermarket is attributed to perishables, to the tune of about $35 billion a year," he says. "If we can reduce that by 8 or 10 percent or so, that's a huge benefit." Also losing significant sums to harsh environmental conditions each year are firms that ship pharmaceuticals, fresh flowers, live animals and precision electronics.

With large amounts of money at stake, it's not surprising that cold chain RFID has generated so much vendor interest (see "Who's Who" box on page 29). Yet, despite the apparent benefits and vendors' best efforts, getting RFID into the cold chain is proving to be a formidable task. That's because early adopters face a variety of barriers, including high up-front costs, iffy reliability, poor interoperability and a lack of successful deployments to base models on. As a result, while most parties generally agree that cold chain RFID is a good idea in theory, real-world adoption has been sparse. "Companies aren't exactly lining up to deploy a technology that currently doesn't have a track record," says Hook.
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