RFID tech centre opens in Toronto
Widespread adoption of radio frequency identification (RFID) technology is still years away from fully replacing ba...
September 26, 2005 by Canadian Plastics
Widespread adoption of radio frequency identification (RFID) technology is still years away from fully replacing barcodes, but with companies like Wal-Mart Inc., demanding suppliers adopt the technology, now is the time to start thinking about RFID strategies, according to IBM.
Last week, an RFID testing and development centre opened at one of IBM Canada’s locations in Markham, Ont., and showcases the latest generation 2 RFID technology.
Generation 2 RFID technology features better tracking capabilities. For example, generation 2 can track where a case of products has been, how long it had been there and how many products are enclosed. Canadian companies can access the centre to learn about RFID and to test RFID solutions with their own products.
But technological issues remain such as the inability for radio signals to transmit through metal and liquids which is why companies should carefully evaluate the business case for RFID before jumping right into implementation, according to Shai Verma, RFID Practice Leader, IBM Canada in Markham, Ont.
The reason to implement RFID right now is because there is a solid business case for how RFID can bring cost savings and efficiency into the supply chain, he said.
And if original equipment manufacturers (OEMs) or automakers use RFID in their own facilities, adoption of RFID by suppliers can give bring competitive advantages, Verma said.
Many plastics processors supply parts for the Tier One automotive original equipment manufacturers (OEMs), and it’s just a matter of time before the automobile manufacturers and the OEMs demand RFID-compliance, Shia added.
Right now, many large automobile manufacturers use RFID within assembly plants to track parts. This means when parts and components come from suppliers, the automobile manufacturers slap on an RFID tag and track the parts as they move through the plant .
But there are lots of things to consider before committing to RFID.
First is industry standards: Make sure that you invest in RFID technology that is EPC Global-Certified, said Jack Brooks, vice-president, business and sector development at EPC Global Canada in Toronto.
EPC Global is the standards body responsible for developing standard communications protocols for RFID, much as it was responsible for developing the now universal barcode standard.
EPC Global-Certified RFID technology will be able to communicate with other EPC Global-Certified RFID technology from different vendors, ensuring no one is locked into one particular platform.
Additionally, as RFID technology is improved, EPC-Global intends to ensure new generations of RFID technology is backwards-compatible, meaning it can communicate with earlier generations of EPC Global-Certified RFID products.
Users will only need to upgrade their RFID readers, for example, by updating the embedded software on the reader, rather than buying a whole new reader
Right now, RFID is being used to track products at the pallet or case level. With the cheapest RFID cards costing between 10 cents and 20 cents, Brooks said it is still too expensive to consider tracking each individual product, or by item. When the cost drops down to five cents, that’s when tracking by item will start to become cost effective, and this won’t happen for at least five years, he added.
The exception is when a product is so big, that it is shipped as an individual item, not in a case or pallet. For example, Hewlett-Packard Co. uses RFID to track its inventory and shipments but computers and servers are so large they are shipped individually and not in cases or pallets. In this instance, “the item is the case.”
September 21st marked the opening of the RFID centre, which was conceived through a joint effort between 10 different industry groups and IBM Canada. The groups involved include the Canadian Council of Grocery Distributors, the Canadian Federation of Independent Grocers, the Canadian Produce Marketing Association, EPCglobal Canada (GS1) Canada, Food and Consumer Products of Canada, Intermec Technologies Corp., Symbol Technologies Inc., and Agriculture and Agri-Food Canada.
Even though the food industry is aggressively adopting RFID, Verma said RFID could have benefits for the entire manufacturing industry, no matter their spot on the supply chain.