Will Chip-Based Serialization Lock Suppliers into a Single Chip Vendor?

Jul 02, 2012The use of passive ultrahigh-frequency (UHF) radio frequency identification tags is on the verge of rapid expansion. We've been hearing this claim for some time now, but with the latest round of initiatives being pushed by apparel retailers, we actually are approaching a tipping point. If your company is an apparel supplier facing tagging requirements from customers, as mine is, there are many questions that come to mind. One topic that will inevitably arise is which serialization method to use—and it's likely to spark a debate as passionate as any political argument.

GS1 recently published a document titled "EPC-enabled RFID Serialization Management for SGTIN-96," (see RFID News Roundup: GS1 US Publishes RFID Tag-Serialization Guidelines), but is there a clear answer on which solution is the best to use? As an executive working for an apparel company, I have been considering this issue for a while, and at present, I would say no. Having said that, I should clarify that there are serialization methods offering greater benefits and more peace of mind than others.

This brings us to the use of so-called chip-based serialization to create a unique Electronic Product Code (EPC). This method employs a Tag Identifier (TID)—a unique serial number written to a chip during manufacture. The problem is that a TID can be 72 to 168 bits in length, while the serial number in the EPC is only 38 bits (the remaining 58 bits in a 96-bit EPC are used for the header, and to identify the company and product category). So chipmakers must create a "recipe" for extracting part of the TID in a way that never produces a duplicate EPC.

In late March 2012, three chipmakers announced that they had agreed on a formula for chip-based serialization that would allow companies like mine to utilize tags with chips from all three vendors without having to worry about creating duplicate TIDs (see Three RFID Chip Makers Agree on Serialization Approach). Really? I'm not so sure.

Like any other industry, chip manufacturers want to control the majority of the market. After all, the goal of each company is to sell as many chips as possible. Currently, each chipmaker has a different method for creating an EPC based on the TID in its chip. So when you start using one chip, you need to configure all equipment around it—software, label printers and so forth. How often do you really want to switch to RFID tags made with a different chip, and then have to change the configurations of all your equipment at all your sites? You might want to change chips because of cost factors, but you might decide against it due to the hassle involved.

Chipmakers are telling us, "Don't worry about serialization management—we'll take care of that for you." My fear is that once you select a chip and use the TID to create EPCs, you will be married to that chip. Yes, you can change it—but without reconfiguring all of your equipment, there is a danger that you might create a duplicate EPC. Are the odds of that occurring worth the gamble, when you might have to pay charge-backs?

To guarantee that each Electronic Product Code is unique, you will likely have to create a database containing every EPC based on a TID, and refer to that database constantly, in order to ensure that all new TID-based EPCs are unique. This now becomes a big nightmare for apparel suppliers and others tagging millions of items annually.

TID is an option for serialization. But due to the fact that EPCs are currently 96 bits, I believe the time for TID-based serialization has not yet arrived. Once longer EPCs become the norm, we will no longer need to use a chipmaker's formula to create EPCs based on TIDs—we will be able to utilize the entire TID as the EPC. I'm sure chip manufacturers will disagree with me, but if you should opt to employ chip-based serialization, be sure to examine the issues carefully—or you might be wedded to one chip provider until death do you part.

Dwight Carver is a pseudonym for an executive at an apparel manufacturing firm. He requested that his identity be withheld, so that he could express his opinion.