RFID Strategy -- Successfully Navigating A Hybrid World

Jan. 27, 2006
How to effectively transition your company from bar codes to RFID.

Radio frequency identification (RFID) solutions are quickly gaining prominence in the global supply chain, their embrace hastened by recent Department of Defense and major-retailer mandates that require suppliers to provide them with RFID-tagged products. According to Allied Business Intelligence, a New-York based research consultancy, the global RFID market will increase from $2.2 billion in 2005 to $10.9 billion in 2009.

Despite this growth, RFID won't completely replace the ubiquitous, affordable bar code anytime soon. The technology is almost certain to co-exist with existing bar code technologies for several years. During this interim period, companies who implement RFID must do so in a way that's complementary with other technologies to prevent the disruption of their organizations.

The RFID Difference

RFID can offer significant benefits today to companies seeking better inventory tracking and higher productivity. Bar codes require the reader to be in the line of sight of each individual tag to scan it - but the radio frequencies used by RFID make it possible for a reader to sense any tags within the operator's range. RFID portals can be placed on shelves and at entrances so that companies know where a product is, from the dock door to the point of sale. RFID enables companies to better control their inventory, reduce shrinkage, and ultimately increase customer satisfaction and sales through better availability.

Bar codes have become universal thanks in part to the Universal Product Code (UPC), the open standard that lets anyone scanning the bar code identify the manufacturer and type of product being scanned. But while companies have employed RFID technology internally since the '80s using proprietary readers and tags, serious efforts to develop an open standard for RFID didn't start until 1999. The result, the Electronic Product Code (EPC), includes more detailed information than UPC, including identification of the unique item by serial number and information about where and when it was produced, along with the name and location of the destination store. The recent adoption of the EPC standard by the Department of Defense, as well as Wal-Mart and other companies, makes the use of RFID more feasible for all.

The Big Decision

To effectively navigate the technology transition, companies first need to decide whether immediate RFID deployment makes sense for their operation. For suppliers whose major customers insist on using RFID, the minimum solution required is to "slap and ship" boxes or pallets with EPC tags. However, many companies see beyond the mandates and recognize that RFID technology can lead to a competitive advantage in the future, and are investing today to discover how it can drive better supply chain synchronization. Regardless of whether your company is an early adopter or technology laggard, if RFID has a future it must deliver a return on investment for business justification.

Avoiding Technology Dead-ends

But even those companies that can benefit from RFID today should treat its data in many ways no differently than bar code information. Because of the prevalence of bar codes, an RFID program must be undertaken in a way that avoids technology dead-ends, while still providing backwards-compatibility with existing bar code technologies. For RFID tags that go to other companies, EPC-compliant technology is a crucial consideration. Organizations should also consider reader platforms that are software upgradeable, systems that can manage large volumes of data, and applications that can scale as RFID deployment expands.

Multi-use readers that can scan bar codes and RFID tags, along with special bar code tags that have RFID tags integrated into them, can also help to smooth the transition between the two technologies. Just as important is the installation of a solution that takes into account both technologies and that integrates seamlessly with other data-capture devices; from bar code scanners to imagers, mobile computers and enterprise digital assistants.

The End Result

After all, once the data is taken from the machine, be it a bar code scanner or RFID reader, it's what's done with the data that matters. The effective implementation of RFID requires solutions that use this technology to its fullest. By putting the proper back-end systems in place, organizations can harness the power of RFID to have their goods interface directly with inventory systems, giving them the power to electronically track products from the production line to the consumer.

Symbol Technologies, Inc. designs, develops, manufactures, and services products and systems used in enterprise mobility solutions. It offers data capture, mobile computing, wireless infrastructure, radio frequency identification, and mobility software products and systems that capture, move and manage information in real time to and from the point of business activity. For more information, please visit Symbol's website, www.symbol.com.

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