What’s next for RFID?
Originally published on
With higher accuracy rates, lower cost and the Internet of Things (IoT), RFID might finally be ready for its turn in the spotlight. RFID — radio frequency identification — may have been ahead of its time in a flurry of high-profile pilot projects in the early 2000s that didn’t seem to pan out. It’s not fair to say that RFID technology went away, but . Thanks to advances in sensors and data processing technology, companies are again looking at tagging trucks, pallets, cases and items to track location and other data like temperature and impacts.“There are places where RFID brings unique capabilities that you can’t do with barcode, for example, any type of asset tracking,” Klappich said. “The key use cases are all about location transparency.” The retail sector has been one of the largest adopters since the Walmart trials. Macy’s, for example, is tagging individual apparel items for 900 retail locations and boasts an accuracy rate of 97%. Early results showed Macy’s like inventory variances, markdowns and order fulfillment. Falling costs for the technology is one of the reasons apparel companies can tag thousands of items. At the time of the Walmart program, tags cost 35 to 40 cents apiece, and the price has dropped to about 5 cents apiece, Ivy said. Apparel companies are moving to source tagging, in which items receive RFID at the manufacturer so they can be tracked from factory to store shelf.
Walmart’s cautionary taleIn 2003, with 100 of its top suppliers and vendors to tag all pallets and cases within two years, but by 2006, the initiative was all but dead. A combination of poor timing on the heels of industry-wide ERP implementation and other IT investments, a lack of data-crunching capability to use the information generated from tracking tagged products and the high cost of the RFID tags, meant even Walmart couldn’t scale it up Behind-the-scenes resistance led many Walmart vendors to take a “slap and chip” approach. “A lot of suppliers at the time told their 3PL, if we get an order from Walmart, slap an RFID chip on the pallet, but we’re not going to spend a lot on the technology,” Dwight Klappich, vice president of supply chain execution research for Gartner, told Supply Chain Dive. One of the problems with the Walmart pilot was the inability of companies to turn the data generated by the tags into actionable intelligence. In 2009, Procter & Gamble ended its pilot program for certain product displays because Walmart did not act on the available information to improve store operations, . Today, the systems of record — ERPs and transportation and warehouse management systems — are able to ingest data from RFID in real time, Jason Ivy, senior manager of supply chain and logistics for Impinj, a RAIN RFID provider, told Supply Chain Dive. “Now you can scan 100 items at a time as they pass by the RFID reader rather than scanning the barcode on each item one at a time,” he said. “Whether you’re tracking goods flowing through the supply chain or assets that support the supply chain, you can now have a physical record that’s really meaningful and useful.” Yet under the radar, companies turned to RFID for a range of uses, like tracking medical devices in hospitals and trailers in trucking terminals. Once a victim of the hype cycle, RFID has quietly repositioned as a technology now ready for prime time.