Multiple Choice

The past year was one of struggle and experimentation in consumer goods companies' use of Radio Frequency Identification (RFID), with lingering standards, product immaturity, cost and return on investment issues clouding the ability to reach Wal-Mart's January 2005 mandate. Instead, suppliers and the retail behemoth continue working to get production-level operations underway on at least some product lines.

Learning From the Past
IT hardware and software makers and their users are incorporating the lessons learned from these experiments into products to meet today's slap-and-ship requirements, while keeping an eye to the day RFID application and encoding moves further up the supply chain. Meanwhile, retailers without current RFID programs are watching these activities to determine when, and if, they should implement RFID requirements of their own.

The past year has shown that users want RFID hardware to accommodate multiple protocols, including EPC UHF 0, Matrix's 0+, Impinj's 0+, and Class 1, and have a clear upgrade path to future standards, particularly EPC UHF Generation 2.

A related issue is the capability to accommodate 64-bit, 96-bit and even 128-bit tags, as well as the need to resolve EPC with ISO standards. The uncertainty has encoder and reader manufacturers struggling with how reassuring they can be to customers about the cost of upgrades.

With tag quality still in development stages, users also want the capability to track bad tags for proper ID use and possible recoup of tag costs, and to help identify ways to improve tag handling processes.

Also at issue is the ability to adjust encoding processes to fit various sizes and widths of tags. Users have been experimenting with tag placement, exploring issues such as where tag location gets the best read -- a particular issue with signal-interfering case contents such as bottled water. A related issue is whether or not to print data over the tag-containing portion of the label.

Reading is Fundamental
In reading solutions, the RFID community has been experimenting with the placement and configuration of readers to ensure the best results. While dock-door readers are many users' first priority, 2005 should bring hand-held readers with RFID capability. Meanwhile, makers of fixed-position scanners and imagers are beginning work on incorporating RFID decoding into high-speed sortation systems.

Many vendors produced software to enable users to translate bar coded SKUs into RFID codes for encoding and application processes, so manufacturers are capable of satisfying their retailer requirements.

But most agree that RFID encoding and application will need to move to an earlier point in the production and distribution process, both for economy and to reap some internal benefit from the tags.

With the passive nature of tag reading making it inherently different from active bar code reading, users and makers of material handling and distribution products are rethinking long-established business processes.

What does it mean when you can get accurate inventory, in real time, without anyone having to touch it? No one knows all the business processes that will emerge from that paradigm shift in thinking, but supply chain software developers that want to be a part of the solution have to start accommodating that flexibility into their applications.

Perhaps the most challenging aspect of application design, say developers, is devising ways to manage exceptions -- not only how to handle them, but even knowing when they've occurred. An application must know it expects 100 of an item at this location in order to know it only got data on 98.

The Next Generation
Must-haves for the next generation of applications include the ability to accommodate RFID data structures, work with middleware, place RFID data into EDI transactions, interact with EPC network services and participate in global data synchronization.

Applications also need to store and retrieve data in formats that will be useful for future applications, say, one that queries, "where are all my model 45a widgets right now?" They also need tools to analyze this data to discover hiccups and delays in the supply chain. And that's just in the warehouse.

"We also expect aftermarket service, support and resupply will move to RFID as the most effective technology to use in managing the post-sale supply chain," notes a December 2004 AMR Research report, "RFID Changes Everything".

While all the focus seems to be on RFID for pallet and case identification in the retail supply chain, other uses, including ensuring merchandise security through the transportation process and within the store, are also the focus of experimentation and solution development. Target is among those retailers participating in smart container tests.

The Driving Force
All this is occurring in a climate where mandates -- not technology maturation -- is the driving force. Those forced to comply with retailer mandates are grumbling about the lack of business case apart from the ability to keep an important customer.

AMR Research is predicting RFID will not be a widely embraced technology until 2010. "Once the technology improves, the chips perform better than 80 percent, the cost decreases to the 5-cent per-tag range, and the global standard is finalized, RFID will revolutionize the way business is conducted," says the December AMR Research report.