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RFID surges ahead

Proponents have changed the conversation and have started tagging at the item level in what the industry is now calling a “source-to-store” approach.
By Maida Napolitano, Contributing Editor
April 01, 2012

Much improved readers and tags
While spotty read performance and stray tags may have prevented many from adopting the technology, significant hardware and software developments is changing minds. Readers have been able to capture tag information from longer distances consistently. For example, Motorola has introduced a more ruggedized next generation RFID reader that has handled increases in volume of items moving through warehouses and the reading of tags in densely packed pallets.

“Based on customer feedback, this RFID reader offers a greater level of sensitivity—being able to read tags in more challenging environments and on more products—and provide more configuration options that can be tuned within harsh industrial situations,” says Mike Maris, senior director for Motorola.

In addition, Intermec’s latest network readers, released in early 2011, have longer read ranges and offer the ability to read more tags, faster. According to Kurt Mensch, Intermec’s principal product manager for RFID, its Advanced RFID Extensions (ARX) can determine the motion of tags to identify tags of interest and discriminate surrounding tags.

Each year it’s not uncommon to see smaller, more powerful tags introduced into the market for a growing number of uses. Inlaid in different forms and paper mediums, they can now be easily attached to a wider range of assets—from airplanes to sheets of paper or even loads with liquid and metal—and still be consistently captured by today’s readers.

And, Omni-ID recently launched a tag that combines RFID with e-paper technology. Ed Nabrotzky, Omni-ID’s CTO and marketing vice president, calls it visual RF tagging. “Visual RF tagging allows wireless tracking of items like other active systems, but adds the element of dynamic visual cues for the worker.” The tag combines RFID with a display that can show product locations, pick instructions for an order, or any other human-readable information, allowing the system to instantly communicate to workers new tasks to perform on the fly, such as quality holds or re-routing of orders.

Convergence of technologies
There has also been innovation in how RFID software and hardware are being used not only in isolation, but also as part of other wireless technologies to minimize inaccuracies while maximizing efficiencies within the DC.

For example, the RFID system introduced by TotalTrax automatically captures and tracks the physical movements of a lift truck fleet by “combining different forms of data collection devices—optical, RFID, position based—and load detection sensors, combined with optical positioning and our software,” according to Sarah Brisbin, marketing director for TotalTrax.

This “smart truck” dramatically enhances warehouse management system capabilities based on real-time knowledge of the actual location of each lift truck, optimizing operator movements and task interleaving.

Intermec also offers another reader, which according to Mensch, is the only long-range handheld RFID reader on the market that combines five wireless technologies in one device: RFID, wireless WAN, GPS, Wi-Fi and Bluetooth. “This flexibility allows a single reader to be used for any application, from asset management inside the warehouse to trailer management in the DC yard,” he adds.
To help add to this momentum, tag costs have been declining and are expected to be driven down with widespread adoption by retailers at the item-level. In fact, just a small decrease in cost can have a substantial impact. A retailer, for example, that ships 100 million units per year can save as much as $1 million with just a penny saved per tag.

According to Liard, ROI times have shrunk over the last few years. “There is increasing evidence that it’s been less than a year.”

RFID’s Catch-22
While there are more drivers than ever pushing RFID’s adoption, not all are convinced. Andraski believes a lack of education is holding companies back from investing and innovating. One of the biggest challenges, he says, is that companies view RFID initiatives as a source of competitive differentiation; thus, it’s been a challenge to get users to share their experience and their ROI modeling.
“Others can’t learn if they don’t share their success story in a public fashion,” says Liard. “It’s a Catch-22 for RFID.” 

New RFID guidelines for retailers and suppliers unveiled by VICS Board
Suppliers, retailers and solution providers seeking help on efficient identification, serialization and placement of Electronic Product Code (EPC)-enabled RFID tags should benefit from new guidelines that were announced today by the Board of Directors of the Voluntary Interindustry Commerce Solutions Association (VICS).


Benefits of RFID

In an October 2011 survey of 58 suppliers and 56 retailers across North America conducted by Accenture on behalf of the Voluntary Interindustry Commerce Solutions Association (VICS) and its Item-Level RFID Initiative (ILRI), both retailers and suppliers ranked “improved inventory visibility” as their top realized benefit of having implemented item-level RFID tagging programs. 

Here are some other expected benefits for suppliers and retailers within the four walls of RFID-enabled warehouses and DCs.
• An internal reduction of inventory levels as a result of greater inventory accuracy. 
• An increase in speed and accuracy in materials handling operations by substantially reducing the number of touches per carton, resulting in a significant reduction in DC labor cost.
• An increased speed of cycle counts, decreasing the labor required while simultaneously increasing the accuracy of the count.
• A reduction or elimination of manual item-level audits of carton contents, thus minimizing the time and labor associated with the DC receiving process.
• The ability to audit each outbound pick-pack carton quickly to ensure a high degree of outbound accuracy and be able detect errors before they are found by the customer.
• A reduction in the number of claims or chargebacks by retail customers.
• The automatic ability to create an automated shipping notice (ASN) based on the products in the container and the time of departure of that
container.
• The verification of an entire container manifest without needing to unpack the container.
• With consistent, highly accurate performance, it will allow a supplier to completely bypass the retailer’s DC, and instead ship direct to stores, avoiding any need to crossdock that merchandise at the retailer’s DC.
• A reduction in shrinkage due to customer and employee theft.
• Enable continuous quality improvement and result in fewer return-related costs and markdowns.
• By enabling tracking and tracing, RFID has the potential to reduce the cost of compliance with free trade agreements, governmental mandates and regulations while improving customs processes.

About the Author

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Maida Napolitano
Contributing Editor

Maida Napolitano has worked as a Senior Engineer for various consulting companies specializing in supply chain, logistics, and physical distribution since 1990. She’s is the principal author for the following publications: Using Modeling to Solve Warehousing Problems (WERC); Making the Move to Cross Docking (WERC); The Time, Space & Cost Guide to Better Warehouse Design (Distribution Group); and Pick This! A Compendium of Piece-Pick Process Alternatives (WERC). She has worked for clients in the food, health care, retail, chemical, manufacturing and cosmetics industries, primarily in the field of facility layout and planning, simulation, ergonomics, and statistic analysis. She holds BS and MS degrees in Industrial Engineering from the University of the Philippines and the New Jersey Institute of Technology, respectively. She can be reached at .(JavaScript must be enabled to view this email address).


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