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One RFID Tag From Cradle to Grave

Consumer electronics manufacturers, distributors and retailers are working toward the day when life-cycle tracking of computers, TVs and other electronic products will deliver benefits for both businesses and consumers.
By Elizabeth Wasserman
Apr 01, 2008—When Toshiba Europe started using radio frequency identification technology to track laptop computers at its plant in Regensburg, Germany, the company saw immediate results. Since 2006, the European subsidiary of Japan-based Toshiba has been applying passive RFID tags to the accessory boxes packed with each laptop on the production line, and reading the tags automatically as pallets are moved past RFID interrogators into the warehouse to await shipment to retailers. Previously, it took workers 90 seconds to hand-scan the bar code on each laptop on a pallet. With RFID, the time spent inventorying each pallet has been cut to three seconds.

By speeding up the process, RFID helped Toshiba Europe overcome a bottleneck at the plant and ultimately increase output from 9,500 to 17,300 laptops per day. The cost of scanning each pallet was reduced from 35 cents to 21 cents-saving Toshiba $470,000 last year alone. The RFID initiative also reduced loss and theft of products, and helped Toshiba ensure accuracy of shipments to its customers.

But the benefits of item-level tagging stop when the pallets leave the warehouse, says Andreas Unterbusch, Toshiba TEC's RFID project manager. While some European electronics retailers-such as Media Markt and Saturn, both owned by German retail giant Metro-want suppliers to RFID-tag goods, those retail chains are currently reading RFID tags only on cases and pallets. "Toshiba is prepared [for item-level tagging], and this could be used by anybody asking for that," Unterbusch says. "But nobody is asking for that at the moment."

The consumer electronics industry is perhaps uniquely suited to item-level tracking. Unlike the consumer packaged goods industry-which produces a lot of low-priced goods, such as toilet paper, detergent and disposable razors-many consumer electronics devices carry high price tags. The products often have a limited shelf life, meaning they can become obsolete quickly due to the development of newer, cheaper products. RFID could help retailers ensure that hot items are on store shelves when prices are high, and help manufacturers manage inventory and better meet demand. From $300 video game consoles to $1,000 computers and $4,000 flat-panel TVs, the value of such items often justifies the cost of item-level RFID tags-even if those tags run $1 or $2 apiece.

In fact, many stakeholders in the consumer electronics industry foresee a day when electronic items will be RFID-tagged during production, tracked through delivery to retailers, tracked in-store to make sure products are stocked on the shelves, and updated with warranty and repair information to provide a virtual pedigree on each device, says Michael Liard, research director for RFID & contactless at ABI Research. Eventually, RFID tags could even help ensure that manufacturers comply with regulatory mandates for disposal of toxic substances (many electronic products contain lead, mercury and other hazardous substances), such as the European Union's Restriction on Hazardous Substances (RoHS) directive, which went into effect in 2003.

"With RFID technologies implemented in the consumer electronics industry, all players in the industry-manufacturers, logistics service providers, retailers, service and maintenance operators, recycle operators, and most importantly consumers-will have better visibility of products during the product life cycle," says Tatsuya Yoshimura, Sony's RFID research and promotion manager, who co-chairs EPCglobal's Consumer Electronics Industry Action Group (CEIAG). "RFID technology will facilitate collaboration among CE manufacturers and their supply-chain partners, leading to higher profitability and improved productivity."

EPCglobal's CEIAG, a group of electronics manufacturers, distributors and retailers and RFID vendors, is now working to bridge the divide between the separate paths that manufacturers and retailers have taken with RFID to date. CEIAG members-including Best Buy, Hewlett-Packard, Hitachi, Nokia, Panasonic, Sony, Toshiba, UPM Raflatac and Wal-Mart-started meeting in August 2007 to begin an expected two-year process aimed at getting industry participants to agree on technology standards to make that vision of life-cycle tracking for computers, TVs and other electronics goods a reality. Several members of the group are pushing for standardization on a passive RFID tag with expanded memory and read/write capability so that product serial numbers and repair and warranty information can be stored on each item, says Gay Whitney, standards director for EPCglobal.

"We're talking about full product life-cycle management-from the time raw materials are contracted, all the way to when the electronic [device] arrives in the home," Whitney says. Among the challenges for item-level tagging on electronics is convincing the consumer that there is a benefit to having the tag remain on the item, and convincing manufacturers, distributors and retailers to share data. "It's still a little futuristic," Whitney says, "but it's not that far off."
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