Timing is everything. And it seems to me that the timing for this column could not have been more spot on.
A news story in our June issue ("Packaging Machinery Demand Grows," News Net, p11) reported that RFID isn't yet a big item on packaging machine builders' radar, and that really disturbed me. You've heard me despair about the exodus of our jobs and the subsequent need for innovation, yet some folks still don't seem to want to take the Wal-Mart message seriously.
|"Will you be ready? The competitive advantage, along with the requirements of large retail business, will drive many of your customers to the trough of RFID gluttony."|
If you didn't know, Wal-Mart has set a 2005 deadline for its suppliers to be RFID-compliant. Scenarios are already being tested for a limited product line. The pervasiveness of this technology can run from pallet tracking for distribution, to product coding and automatic checkout.
Will this affect your business? For many of you, I suspect so. The time is now to invest or someone else will.
The Boston-based Yankee Group reports that more than four million jobs will be affected by RFID in the next three years, and the industry will spend up to $5 billion on tags and infrastructure. I think this means that it will be used.
International attention to RFID is well-documented. A U.K.-based RFID center recently was created to assist vendors and customers with the transition to RFID systems. Microsoft and Intel fund this center.
You may also be aware that this technology is going to be pervasive because the first lawsuit has already been filed by Intermec, an RFID product and technology vendor. There are presently more than 4,000 patents, so hang onto your seats.
Now, understanding that this still is fledgling technology, let's examine the technology and its possible implications.
RFID systems transmit data via radio frequencies. This data is the same as the data found on a barcode, which is on every product you buy, on the packaging it's shipped in and on the pallets those packages are stacked on.
Although RF readers vary in size, read-distance and cost, the devices all do the same thing--read the data that is on the RF tag. This is where it starts to get interesting.
In past lives, RF tags were larger, passive devices that received the energy to respond to a reader from the reader itself. These 'pucks' identified large devices such as automated guided vehicle (AGV) support frames, but not the car chassis it was carrying. The content (data) of the support frame was, however, stored on the puck.
These pucks were expensive--generally $2-$8 per node. That won't do if you wanted one on each bag of M&M's.
Form factor will be the largest force driving widespread application I can think of. Paper-thin tags incorporated into any product, coupled with the associated savings from things like better product tracking, will accelerate the speed of business and increase profitability.
So where do you come in?
Standards for electronic product codes (EPCs) are being hammered out by various companies, a process being managed by EPCglobal--a not-for-profit organization supporting the commercialization of RFID technology. There are many fronts for standards such as protocol, hardware, and intellectual property.
Once standards are set, the floodgates open. Will you be ready? The competitive advantage, along with the requirements of large retail business, will drive many of your customers to the trough of RFID gluttony.
Companies such as Intermec and Samsys are already developing products for those same customers that will need to incorporate RF technology into their product lines.
The end user (Wal-Mart, Department of Defense, etc.) will want parts, products and pallets tagged with RF to replace the UPC codes in use now. All a product has to do is show up at the door, and voila! Product received. Software takes care of the paperwork.
The vendors have to use tags, but don't want to waste resources manually programming and placing them on the product or packaging. Again, an automatic system is required.
These vendors are your customers,you'll need to be helping them with the growth curves and the technology before someone else does.
These same customers will use RFID technology to enhance their shipping and inventory accuracy. Perhaps they will want to use it for raw material processing as well.
But of course, everything involves the companies and products that require the next generation of identification. Much will morph in the coming months, but for heaven's sake, don't let this opportunity slide by without a taking a closer look.