In my last blog post, I talked about how RFID could be the Ideal solution in many retail applications that are currently handled by barcodes, if it weren’t for its technical limitations. These included sensitivity to metal and water. But even given its limitations, there are many industries now successfully using the technology as a replacement to barcodes. How did that come about?
At the beginnings of the EPC
By the early 1990’s RFID was being used in applications such as anti-theft mechanisms in cars and card readers in public transportation systems, for example. But to make RFID viable in supply chain applications, an international product identification standard, such as the ones bardcodes have, needed to established for RFID. This was created in the early 2000’s . It was called EPC or Electronic Product Code. Shortly after, in 2003, Walmart announced that it would require its top 100 suppliers to identify its pallets and cases with RFID tags.
Walmart out in front
In fact, Walmart was taking the risk of adopting and working to improve the technology until it could reliably be used to track all inventory in its vast supply chain. If it worked out, and all of its suppliers adopted RFID, Walmart was going to save countless millions of dollars in inventory management. The problem was that the technology wasn’t quite advanced enough for the scope of their application.
Over the next 6 years, there were many technical problems encountered and the planned adoption of other Walmart suppliers was delayed or cancelled. Also, margins on many consumer goods simply made adoption unsustainable for many suppliers, who created backlash because Walmart had forced this unproven technology on them. Through these problems though, Walmart continued to refine the technology.
Walmart continues to use and develop the RFID and has even also rolled it out in high-theft clothing items such as jeans and underwear, for tracking in the store environments.
Others followed
Thanks in part to Walmart’s steadfast development and active funding of RFID research, many other Retail and manufacturing companies are now testing it or using it.
- Retailers such as BestBuy, Metro and Target have now begun using RFID technology to improve their supply chain.
- Companies such as Airbus, Boeing, General Motors and many others, tag parts and track them automatically through the manufacturing process.
The Future of RFID
RFID could be seen as the magical version of barcodes. Instead of a product code you have to scan, it is a product code that “jumps into” your inventory system by itself through radio waves, allowing you to track items effortlessly. It’s great potential is its ability to provide real-time information about an almost limitless number of items. However, Its basic cost and the efforts required to overcome its technical limitations make it inaccessible to many companies. Businesses of all sizes can implement a barcode system at a much lower cost with excellent results, provided the system is well thought out and appropriately installed (ask us how!). Also, innovations in vision technology are enabling more efficient barcode reading with an increased level of automation. The advantage here is that the barcode on the product itself doesn’t have to be changed.
This is why we see RFID being more of a complement to barcodes. Due to pricing and technical issues, we don’t believe it will attain widespread adoption in the short to mid-term, but rather remain a powerful tool to be used for very specific applications, in highly controlled environments.
