Radio Frequency Identification is one of the hottest topics in packaging today. Wayne Robinson listens to the views of Cambridge University’s Dr Duncan Macfarlane, one of the world’s leading exponents of a technology that may change the way business is done. Although RFID (radio frequency identification) has been around in primitive form for a quarter of a century, it is only over the last five years that it has begun its rise to the top of the packaging agenda. Packaging professionals attending the latest NSW PCA dinner event at the impressive Curzon Hall, had the opportunity to listen to and question one of the world’s foremost experts on RFID, Dr Duncan Macfarlane, an Australian now lecturing and researching at Cambridge University in England.
According to Macfarlane, the current RFID movement began in 1999 when a group of interested parties were celebrating the 25th anniversary of the barcode, and began discussing the next stage. Under the umbrella of the ID Auto Centre, they identified their mission as to rethink the role and implementation of the barcode, to make the connection between information and physical flows (packages). To do this they realised they needed some way of automatic, reliable transfer and update of information based on physical operations. They needed one simple low cost system for the whole supply chain, and they identified RFIDS as they key element.
For the next year or so, discussions took place until the concept was given a huge boost. Wal-Mart, the world’s biggest retailer, came on board as a sponsor, which fairly quickly led to more than 100 of the world’s top companies joining the scheme, and so the serious push for RFID had begun. Names to join along with Wal-Mart were Gillette, Kellogs, Unilever, Procter & Gamble, Kraft, Philip Morris, Intel, Canon, Coca Cola and Pepsi. In fact, virtually all of the world’s leading brands were there.
Four years later, the original Auto ID centre had broken into two – creating a business side, EPC Global, and a research side, Auto ID Labs, of which there are half a dozen around the world, including those at Cambridge and one at MIT, Massachusetts.
At a fundamental level, RFID is a means of automatically identifying objects. There are two basic elements to an RFID, a reader and a tag. The tag is located on the object, the reader extracts information from it. Typically; operation data size can vary from 64 bits up to a few kilobits, reading range can be from 1cm up to 10 metres, and a reader can read between 50 and 1000 tags every second.
So far, tags developed generally have no power themselves; they transmit data by reflecting back radio frequency energy that comes from the reader. These are known as passive systems. It is possible to build active tags, with their own power source, a battery, but these are more complex, costly and bigger, although on the plus side, they do increase the functionality and the performance, or range of communication.
There are other technologies apart from RFID for product identification, notably barcodes, magnetic strips and vision systems, and RFID is not as cheap as some of these, but the virtual simultaneous identification, the robust nature, the reasonable operating distance and the full automation with no line of sight necessary are compelling reasons why RFID has risen to the top of the pile.
The key thrusts at the Auto ID Labs are low costs and business justification. Keeping the cost of the readers and tags low is being achieved through reducing the chip price, and reducing the amount of silicone needed, through minimising the information stored in the tag chip. This has been completely minimised by storing only the ID on the chip, the rest of the information is stored on a database and accessed through the ID number read by the RFID system, which is then linked to a URL on the internet. In other words the information on the tag is just like a key, which opens the door to all the relevant information located elsewhere and available online. To the user it is immaterial where the data is located, just as long as he or she gets it when requested. So the user reads a tag, and instantly all the information on that package appears; what it is, where it has been, where it is going to, who made it, when it is needed and so on, except that the information is coming not from the tag itself but from the database. The EPC, or electronic product code, merely provides the gateway, in a mechanical sense, to the data.
The business justification has come through multiple applications and companies, to create standard tag reader systems, and to develop standardised data management and communications, with Savant and PML providing the software here. The EPC systems essentially operate as an extension of the internet, and this has kept the cost right down.
The EPC (electronic product code) is a new numbering system that took the dons at Cambridge two years to develop. It had to be able to provide a unique number for each of the billions of packages that would be read over the coming years. It comprises a header, which has 256 different variations, the EPC manager which indicates the manufacturer, with 268 million variations, the object class which indicates the product type, or SKU, with 16 million variations, and the serial number, unique for each instance of a product, and which has 68 billion options. Multiply all these by each other and you have the total number of unique EPCs, so there should be no need for duplication for some while yet.
So what will be the key impact of the widespread implementation of RFID? Macfarlane says it will primarily be about visibility. He says prospective companies have voiced their support through understanding that RFID will give them "total visibility of our supply chain operations", one company even saying that RFID will give "complete visibility through the total life cycle of its products". Macfarlane says that while visibility is key, the real benefits will occur when the loop is closed. By this, he means that once information has been sensed, decisions need to be made and then actions taken, which determine the operation, which is then monitored through RFID sensing. He claims that once this loop is complete and visibility is influencing decisions, the real benefits will weigh in.
Better information is clearly a key benefit of RFID. The value of a networked RFID is in enhancing the quality of product information available to make decisions and so take actions. RFID provides immediate information with accuracy, completeness and timeliness.
In terms of applications, RFID is seen as having very little in the way of limits. At present, tags are used on reusable assets, carriers for the manufacturer, pallets for the retailer, in other words resource based tagging. Macfarlane sees RFID tags moving to allow product based tagging, they are now capable of being used in assembly by the manufacturer and on cases for the retailer, and the aim is for RFID to tag each physical entity for the retailer, each component from the manufacturer.
The current drivers for RFID include compliance, certainly in the US where Wal-Mart has said its top 100 suppliers all need to be RFID compliant by January 2005, with the next 300 the year after that. From the retailer’s perspective, cost reduction and delivery performance improvements are big drivers. Mike Duke, Wal-Mart president and CEO, says, "What we see with RFID is an infrastructure breakthrough. We are very committed to it." Not committed enough to pay for it though, Wal-Mart-suppliers are having to bear the whole cost on their own, and will not be allowed to raise their prices to cover it, Wal-Mart arguing that they will make enough savings by using the process to more than cover the costs of implementing it. In the UK major supermarket chain Tesco is also pushing RFID, although not so aggressively as Wal-Mart, and will be providing some kind of financial assistance to its suppliers. Tesco wants RFID on pallets, cages, trays and cases initially, although it is looking to selected individual product lines from September of this year as well, phased in over two years. At the end of that period RFID will be extended to all products. Tesco will have readers at all points in the supply chain, notably in the delivery dock, for delivery verification, and on the store shelves, for product replenishment.
Products singled out for RFID at present are those of high value; clothing, DVDs and so on. Clothing actually raises an interesting issue, that of privacy, for if the garments you are wearing are readable in some way by someone, it opens up the possibility of malicious use of that information. Privacy is a question the Auto UD Labs are working through. Macfarlane says it will not scupper RFID, but does need to be carefully considered and resolved.
Another driver is the US Department of Defence (DoD). It has requested RFID for its entire food supply chain by January 2005, and, unlike Wal-Mart, is prepared to pay for them. It wants active tags on all shipments, large items and containers, and passive tags on pallets, cases and some items. It will tag the packaging for now, but will tag the item when that becomes possible. By implementing RFID, the DoD believes it will be able to provide a better food service to its forces on the ground. The Department is unlikely to stop at food, uniforms, weapons and equipment are all likely to have RFID in the near future, in that way an exact track can be kept of everything, a notoriously difficult job in the armed forces. In Aerospace, arch rivals Being and Airbus have formed a joint working party to initiate RFID implementation, and there is an initiative by IATA, the international airline association to have RFID on all items of passenger baggage by the year 2007, partly to minimise the potential for lost baggage and partly to help eliminate terrorist possibilities. RFID is not just being developed in Europe and the US, many leading Australian companies are involved including Visy and Coles Myer.
Packaging, according to Macfarlane, is possibly the most innovative sector of all for RFID, and there are serious developments going on all the time in new packaging methods, new materials, for instance conductive inks, and in life cycle deployment.
Issues remain for RFID, including the need to integrate with existing systems, with challenges in systems integration and levels of integration. There are still issues of tag performance, for instance a tag on the middle of a wine bottle label does not perform too well. There is a confusion around who should be working with whom, and who pays. Privacy has to be worked out, as does security on many levels. However Macfarlane and his co-developers are confident they will be ironed out as the drivers push forward irresistibly. He believes that the benefits RFID will deliver to the packaging supply chain, will lead to new ways of operation, sleeker systems, delivering lower costs, faster speed to market and safety. After a relatively short gestation period, RFID is coming of age, and the next couple of years will see its first public steps.
