On the comeback trail

With concerns about cost and security settled, RFID is now being increasingly adopted by enterprises other than retail for asset tracking, inventory management and host of other innovative applications.

The adoption of radio-frequency identification (RFID) technology, every since it burst onto the scene a decade back, has been one long, strange journey: Periods of irrational exuberance followed by times of great frustration and confusion; expensive pilot projects riddled with technical, standards-based and cost complexities; and a widespread belief among users that it is a technology solution in search of a problem.

But last year, all that RFID hype, which was famously kick started by the US retailer Wal-Mart, has finally given way to real-world implementations and pockets of success. Is RFID making a comeback? There are tell-tale signs that this contact-less technology is back in the radar of many IT managers.

“Companies around the world are looking to radio frequency identification technologies to better track mobile equipment, tools, assets, vehicles, people and so on. Companies in the Middle East have the same problems and are exploring the benefit of using RFID, particularly in the construction, energy and security industries. Given the large number of tools and equipment used on construction and energy sites, RFID can reduce the amount of time spend looking for specific items and ensure items arrive in a timely way and don’t delay production. In security, RFID is being used to secure weapons and munitions,” says Mark Roberti, founder and editor of RFID Journal.

RFID is being increased adopted by verticals other than retail and manufacturing, which have been the early adopters. “Obviously, when referring to RFID technology, many people can identify with retail or manufacturing applications where there is a need to know the particular state or location of a component or item for sale. In reality, RFID technology enables asset tracking and systems improvements in logistics applications such as with returnable transport items, waste management or automation as well as asset management verticals including laundry, jewellery, and medical. Additionally, RFID technology is frequently mandated for food and animal identification to help track provenance or ownership in the case of disease or loss,” says Marie- Francoise Glotz, VP of Identification Technologies, HID Global.

Wael Hasan, Territory Manager of Zebra Technologies, says RFID is also being used in the education sector. “Take for example, university libraries with thousands of books. They don’t often do stock taking physically because it can be quite labour intensive. Now the books are being tagged with RFID, so all you have to do is walk down the aisle with a scanner and the whole process is done within a day. It is also being used in data centres to track critical devices.”

Experts note that IT executives at companies with large data centres have long grappled with the problem of misplaced equipment, particularly “ghost servers” that draw power but don’t do any work. The problem can be costly, because electricity is wasted and in some cases companies must continue to make lease and maintenance payments on the “lost” systems.

Placing RFID tags on IT equipment could make it easier to keep track of machines moved into or out of the data centre. Traditional inventories of IT assets, which are generated by staffers who walk from server to server carrying bar code scanners and clipboards, have limited shelf lives because a data centre’s equipment is constantly changing.

Roberti cites the example of Tagstone, a leading RFID solutions provider, which has developed a solution for managing car dealerships. Tracking many vehicles that all look the same but are slightly customised can be a challenge. Tagstone helps companies find the right vehicle and better serve customers. Tagstone is also working with governments around the region to track weapons. So they have a system that tracks which police offer was issued a gun and when and when it was returned. Kuwait retailer MS Retail is offering an RFID-based tracking system at its new children’s superstore, Baroue, to enable parents to monitor their kids as they play in the store’s playground.

There are couple of factors driving the adoption of RFID across verticals. First off, many of RFID’s infamous roadblocks such as managing wireless signal, resolving back-end IT and supply chain integrations problems, and grasping those immutable laws of physics have been cleared. “When RFID came initially, many people thought it would replace barcoding. In reality, its complimentary to barcoding. While some of the integration problems still do exist, users have gained a greater understanding of the challenges and process re-engineering involved in deploying the technology in suppy chain,” says Hozefa Saylawala, Product Manager at Motorola Solutions

Another factor driving the adoption is cost. “There has always been a demand for RFID in the region. However the adoption rate has been slow due to high costs associated with the tgas and infrastructure. This is finally changing as manufacturers lead by Intermec are starting to produce lower cost infrastructure and lower cost tags,” says Julian Sperring-Toy, GM of Intermec.

Saylawala adds that while the cost was an issue when it came to item-level tagging, today tag prices have come down to the range of 10-20 cents and some of the tags can also be re-used. Also, the amount of data a tag can hold has also gone up.

Is RFID’s journey showing more positive signs or is it still an evolutionary slog with more work ahead? After being seven years in, is RFID finally riding a wave, sweeping through enterprises? Soma Sekhar Vedantm, CEO of TrackIT Solutions, says the wave has already happened without many people realising it. “Media has failed miserably when it comes to portraying the adoption, and everyone was looking for a Wal-Mart style of adoption. Truth it, there was a wave of adoption on the HF side, as it is being widely used in access control systems, public transportation tickets, etc. It would take time for that to happen in the open supply chain, which is heavily compartmentalised. Getting these silos to adopt a common technology will take time.”
Security concerns are preventing some IT managers from using RFID technology as transmissions from active RFID tags can be retrieved. But the industry proponents say opposite is true as it actually enhances security.

“Where there is a need for increased security, identification or tracking, we are seeing more implementations of RFID technology. It is up to the systems integrator to work with customers to determine the right transponder, reading environment and appropriate database infrastructure. Whether or not the tag holds more than a unique number identifier or enables read/write capabilities, for example, is all based upon the user’s requirements for knowledge about the asset along with any regulations which may govern the asset’s use or transport,” says Glotz.

While it is true is that, as implementations have shown, RFID can deliver true business value and clear ROI, it is nowhere close the initial hype of RFID’s potential. Soma says it will be the only technology which will be used every physical object in the world and he believes RFID would soon find its way into every industry soon. “RFID will be applied in new domains. How many organisations have a proper asset mechanism in place? How many have a proper digital data-based inventory tracking system? These represent enormous opportunities. It is only a question of when.”