Editor's Note: I am pleased to provide another guest post by popular guest blogger, Chris Kapsambelis. The author asserts that given the way passive RFID is being implemented today, the economic advantage of RFID over barcodes is being lost, and the future of passive RFID in the supply chain is dim.

By Chris Kapsambelis

As a result of the various RFID pilots in progress since 2003 in the supply chain, two of the most important reader concepts appear to be headed for extinction.

The first to be abandoned was the Smart Shelf. The Smart Shelf was designed to provide continuous and automatic counts of products on store shelves and storage bins. With this capability a retailer would know immediately what stock is being depleted and therefore able to replenish without ever running out of stock.

In practice, the Smart Shelf proved to be very expensive. Recognizing that Smart Shelves would not be very effective until item level tagging was well under way, further testing was postponed awaiting the results of case and pallet level tagging which were much easier to cost justify.

The second concept involves the use of RFID Portals. Pallet level tagging utilizes RFID Portals which are designed to read all the RFID tags on a pallet load of case goods. This would be done automatically, as pallets were transported on fork lifts in and out portals in a given area. Systems were designed to process these reads and provide accurate and perpetual inventory counts at distribution centers and store back rooms.

In practice, RFID Portals failed to produce the needed read rates to justify their very high cost. Pallet read rates are between 90% to 95%, and case level read rates are between 50% and 80%.

To overcome these initial failures, Wal-Mart reports that new form factors of RFID readers are being considered. For some time now, tests are being conducted with RFID equipped fork lifts. The RFID fork lift reader is a more economical solution to the portal reader because one fork lift reader can be used in place of many portals. In addition, a fork lift reader can be used for Pick and Place transactions, involving pallets, as well as Shipping and Receiving by the pallet load.

To address the problem with reading case tags, a hand-held RFID reader has been introduced. This reader is used to read cases as they are placed on pallets one at a time, and on the receiving end as the cases are removed from the pallet. As with the fork lift reader, the hand-held unit can be used to record Pick and Place transactions at the single case level.

Then, there is the strange idea of a wearable RFID reader that can guide an associate in finding items in current demand. Apparently, without Smart Shelves, RFID cannot be relied upon to precisely track items to a given storage bin in the back room, and this method may be necessary in finding what is needed in the last 50 feet of travel from the back room to the store shelf. It sounds very labor intensive.

In the struggle to standardize the use of RFID, many people have been prone to draw comparisons with the early struggles to standardize on the use of barcode. This movement to manual RFID readers also has a precedent in the early adoption of barcode. The early vision of barcode involved the automatic reading of objects in motion, primarily on conveyor belts. That is why the word "Automatic" is part of the phrase "Automatic Identification (AutoID)." For a long time AutoID was used to describe just barcode. Later other technologies were included. When the retail industry adopted barcode, hand scanning was introduced by necessity. Since then hand scanning and barcode have become synonymous.

In the Supply Chain, the biggest advantage that RFID has over barcode is the ability to automatically read large groups of objects eliminating the labor needed to manually scan the large volumes involved in the supply chain. Portal Readers are designed to automatically record Shipping and Receiving transitions at the pallet level. Smart Shelves are designed to automatically count and locate cases and items at back room storage bins and store shelves.

If RFID is going to follow into barcode's footsteps and become a manual scanning technology, then the economic advantage of RFID is lost. None of the other attributes of RFID is of sufficient magnitude to justify its use over barcode. Therefore, the prospect of RFID in the supply chain looks very dim indeed.



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.