Bringing down the cost of RFID infrastructure

Transpond Global says the problem with RFID isn't the cost of tags. It's the cost of the hardware to collect data and infrastructure to manage data and direct processes.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 5/22/2007

You’ve heard about the 5 cent RFID tag. But have you heard about the $500 RFID reader?

If not, Transpond Global Solutions, an RFID systems integrator, has a product for you. Here’s what they’re talking about.

It’s not all about tag
Ever since Wal-Mart announced its mandate, the talk has been about the relatively high cost of RFID tags compared to traditional bar codes. The tipping point when RFID makes sense as an alternative to bar codes is supposed to be when the cost of a passive RFID tag comes down to 5 cents. Tejas Vakil, Transpond Global’s CEO, isn’t convinced.

“You’ve heard that the 5 cent tag is going to drive volume,” says Vakil. “But we think the real hurdle is the cost of capturing and integrating the data back into your processes.”

Bringing down the cost of an RFID infrastructure was certainly one of the themes at RFID Journal Live last month in Orlando. There, several vendors were demonstrating mobile solutions that eliminate the need to install a fixed reader at every dock door.

The $500 reader
Still, if RFID is to become as pervasive in manufacturing and distribution as the bar code, you’ll need read points throughout a facility. The cost of fixed readers, which can be expensive, can oftentimes be $1,000 to 2,000 for a single reader. That’s why Transpond Global is focusing on the $500 reader instead of the 5 cent tag.

“The existing reader/antenna solutions are wonderful products, and they work if you only need a limited number of read points,” says Vakil. “But we believe they’re too expensive for volume deployments.”

Vakil’s group has developed a stripped-down RFID reader and antenna with one Ethernet connection that draws power from a facility’s Ethernet cables. That makes it easy to install and cheap to operate.

The reader itself has just a few basic functions. It can:

• Read and write to tags
  
• Lock and kill tags
  
• Time stamp the data.

Everything else is handled by software on a server. Transpond Global has been demonstrating a prototype at trade shows and expects to have a production model by the fall.

“We really expect other hardware companies to follow us on this,” he says. “If we all can bring down the cost of implementation and infrastructure, end user will be able to recoup their investments in RFID and show a return.”