Editor's Note: Our popular guest blogger, Chris Kapsambelis, is back with another opinion piece. He asserts that RFID in the supply chain has stalled, and that little or no advantage exists for RFID when compared to the venerable workhorse, the barcode.

By Chris Kapsambelis

After reading Anita Campbell's article "Wal-Mart Extending RFID Mandate But Can Its Website Handle It," I began to wonder why the effort to use RFID in the supply chain appears to be stalled. In the hope of providing some relief to Anita's boredom with Wal-Mart, what follows is my analysis of the current status of RFID in the Supply Chain.

In 2003, the MIT AutoID Center produced their vision of RFID as a replacement for barcode in the supply chain. Their concept emphasized that unlike barcode, RFID did not require "Line-of-Sight." As a result, full automation would be possible through the use of RFID Shelf Readers, and Portal Readers. Portal Readers were to read, at the item level, everything that was shipped and received at every facility (factory, warehouse, or back room). Shelf Readers were to be deployed at shelves for the purpose of reading items at sale or storage locations. The marriage between RFID and the serialized Electronic Product Code (EPC) eliminated the need for laborious inventory counts since RFID readers could produce these counts automatically. This was a vision of a computerized hands-free supply chain. People were expected to perform their functions completely unaware that computers using RFID sensors would keep track of everything. It was "The Internet of Things."

Companies like Wal-Mart, which apparently never progressed beyond using barcode at the item level for price lookup at Point of Sale (POS), thought that RFID would let them leapfrog the competition into full automation in the supply chain. As some of us predicted, they are finding that passive RFID is not significantly different from barcode, and the full benefits of automation are not possible. Companies like UPS, FedEx, Walgreens, Home Depot, and many others who make full use of barcode in the supply chain at distribution centers, warehouses, and store back rooms, now have the edge over RFID users. That is why RFID has stalled.

A lot has been written about RFID as the solution to the chaos that exists in the back room of large retail chain stores like Wal-Mart. For companies that have been using barcode-based Electronic Data Interchange (EDI), and Advanced Shipping Notices (ASN), Warehouse Management Systems (WMS), as well as Distribution Center Automatic Sortation Systems, the disorderly back room was never a problem. These concepts have been in use with barcode for more than 25 years. Another problem that RFID was to eliminate is the retail out of stock (OOS). Again, systems that have been using barcode generated POS data to drive the replenishment cycle have had this problem under control for years, and find the need for RFID Shelf Readers completely unnecessary.

The problem with RFID in the supply chain is largely due to the need for an inexpensive tag. This need can only be satisfied by demanding very high production runs. The only tag that can satisfy this need is the UHF passive tag.

The passive tag, with its large two dimensional antenna, does not perform much better than barcode. The antenna is highly directional which negates RFID's perceived advantage of not requiring "Line-of-Sight." While the tag can be read through some materials it fails to read through metals or liquids which can be found in large abundance in the supply chain.

This lack of performance has forced users to abandon Shelf Readers and Portal Readers in favor of mobile readers. But, when it comes to mobile readers, barcode has a huge advantage over RFID because barcode readers are the size of a cell phone, and battery life is measured in days. RFID readers are more that 10 times larger, heavy, and have a battery life measured in hours.

Add to this the fact that item level tagging, for retail chains, is now all but abandoned. This is primarily due to the lack of performance. The five cent tag is unachievable without the volume demand of item level tagging. Barcode tags, on the other hand, continue to be relatively free.

For some time now, hand-held mobile applications of RFID have taken center stage. Automation and "The Internet of Things" are hardly mentioned. Soon, RFID in the retail supply chain will be a thing of the past. It just cannot compete against the established barcode technology. I think Wal-Mart is just going through the motions hoping somehow to Salvage some of their large investment in RFID. In my opinion they will not succeed. No one can afford to follow in their footsteps.



About the Author: Chris Kapsambelis was a founder of Computer Identics Corporation, where he participated in the early use of barcodes for logistics applications. Later he founded Barcode Data Systems that provides consulting, and software development for auto-ID applications. He was elected a Charter Member of the AIDC100 which is made up of the top 100 recognized authorities on Auto ID and Data Capture. He received training in radio systems while serving with the U.S. Air Force, and later graduated from Northeastern University, Boston, MA with a Bachelor of Science Degree in Electrical Engineering. He has been granted numerous U.S patents related to the development of bar codes and bar code readers.