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A Guide to RFID Security Tags

Tracking high-value goods can thwart counterfeiting and supply-chain diversion. Here's what you need to know to choose the best solution for your company.
By Jennifer Zaino
Dec 01, 2010—Product counterfeiting has long plagued manufacturers in many industries, and from all accounts, the problem is growing worse. That's due, in large part, to more outsourcing of manufacturing in Asia and booming online sales.

"Faking things is kind of a national sport in China," says James M. Bevan, the managing director of research firm Vandagraf International. "Then you throw in the Internet sales of products [on sites] you Google up for Gucci handbags, and what you actually get are China fakes. Put the Internet and outsourcing to China together, and the [number] of counterfeits absolutely skyrockets."

In addition, supply-chain diversions to unauthorized outfits cost companies worldwide billions of dollars in lost revenue. Product-related crime losses, including counterfeiting and gray-market diversions, amounted to nearly $700 billion in 2008, or about 7 percent of world trade, according to Vandagraf.

Several radio frequency identification technology providers have developed item-level security applications to address these problems, though few manufacturers and distributors have taken advantage of them. But that's beginning to change, thanks to RFID chips and tags with enhanced data security features, lower prices, and more understanding among end users that RFID can be used to thwart counterfeiting and diversion.

"Four years ago, I could say with a fairly high level of confidence that zero tags were sold for this purpose, except possibly for experimental lab work and pilots," says Scot Stelter, senior director of product marketing at Impinj. "Now, we are starting to see volume purchases of RFID tags for that application," such as the tagging of high-value branded goods.

The use of passive RFID tags as a security technology rather than just a track-and-trace effort is growing about 17 percent annually, according to Vandagraf. "If you are an RFID chip manufacturer and say you could supply a passive RFID label that would meet track-and-trace needs and maybe antitheft needs and authentication all bundled in, then your sales offering becomes more powerful," Bevan says.

What makes an RFID tag capable of securing goods against counterfeiting or providing forensics insight into unauthorized supply-chain diversions? Not surprisingly, vendors vary in their approach to these challenges. Consider the following issues when choosing an RFID solution to protect your brand and reduce theft. Then check the table on page 35 for specifics on some leading RFID vendors that make security chips and tags for your application.
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