Feature Articles
December, 2004
From Our Technology Issue
Imagine pushing your grocery cart filled with Wonder bread, Jif peanut butter, Kraft American cheese slices, and Lay's Potato Chips right out of the grocery store without stopping at the checkout counter. No alarms sounding. No one chasing you into the parking lot. No worries at all.
The image isn't as futuristic as you might think.
Radio frequency identification technology, most commonly known as RFID, is already being used in many consumer and business applications and could one day altogether replace decades-old familiar barcodes.
Already, the technology allows vehicles to pass through the New York State Thruway's EZ Pass lanes without stopping, owners to be notified if their pet is lost, and drivers to unlock their vehicles without their keys. Since 1997, more than six million Exxon-Mobil customers have used the RFID enabled Speedpass wireless payment option.
With a Wal-Mart mandate that its biggest suppliers implement the technology for inventory tracking purposes by 2005, experts say it's just a matter of time before RFID changes the business landscape and, indeed, the way of life for consumers.
"This whole idea of chips and locating has implications in every industry, beyond just tracking groceries.
It's going to be world altering."
-Peter Bruu
Simple Business Technology
"The implications are fantastic. It's a mind-boggling topic. Think about luggage; you never lose luggage. In every industry you can think of, it's going to be dramatic," says Peter Bruu, technology consultant and owner of Simple Business Technology in Penfield.
"If everybody has a chip in them, then no one would need keys. It could change the whole lock industry.This chip could go in your arm and it could be powered by the heat of your body," Bruu says of a far-off possible use."This whole idea of chips and locating has implications in every industry, beyond just tracking groceries. It's going to be world altering."
For now, the main business application is inventory control. RFID tags or microchips can be placed on pallets or cases of merchandise, even individual items. They emit signals through tiny antennae, which are being researched and produced by Rochester Institute of Technology. Information is then picked up by readers, which, in some cases, can be read from significant distances.
The tags can be made so small, consumers may not realize they're there. RFID technology has the potential to save businesses time and money in lost or stolen inventory, and in the cost of employees who may no longer be required. A retailer and its supplier will be able to track a shipment in transit, at any time and any place. The implementation of this type of usage should be relatively easy since each pallet or case, as opposed to individual pieces of merchandise, would be tagged. Theoretically, both the retailer and supplier could know if the storage room supply is getting low and another shipment of goods could automatically be ordered.
"Initially the impact will be more on the business owners and the business managers using it because it gives them much more visibility into their inventory and supply chain, and that's a huge benefit to manufacturers and suppliers," says Scott Edwards, senior account manager with the regional sales office of Symbol Technologies Inc., which specializes in three primary technologies, including RFID. "I believe there are significant cost savings to be gained by having that level of inventory control, but to give you any ballpark... I wouldn't know."
Symbol Technologies has supported RFID for some time through pilot projects and recently completed acquisition of Maryland-based Matrics, which is the world's leading manufacturer of RFID tags and readers.
Tracking incoming RFID tagged inventory with RFID readers. Photo courtesy of Metro AG and the Future Store Initiative.
Edwards says Symbol Technologies works with the Department of Defense and Wal-Mart, both of which have issued the RFID mandate for their suppliers. Many of the company's big-name customers locally aren't yet implementing RFID, "but all of them are talking about it. Most of them are still doing pilot projects."
Challenges in implementing the technology include cost and a lack of ratified industry standards.
Depending on the type of tag, the cost can go as high as about $1.25 a tag, experts say. "Nirvana seems to be five cents per tag. Today, you maybe could get them down to 25 cents a tag and that's with millions and millions of orders," Edwards says. "We're racing to bring down the costs, because until we get there it is impractical to tag everything with RFID tags-only things with a very high cost or pallets."
Experts say the Wal-Mart and Department of Defense mandates will drive RFID implementation. "I think that you will see significant progress in the implementation in 2005 and 2006," Edwards says.
RFID tags or microchips can be placed on pallets or cases of merchandise, even individual items. They emit signals through tiny antennae.
Bruu goes a step further, and forecasts RFID will be close to being at the "piece level," or individual pieces of merchandise, within five years. "There are already companies jumping ahead of that mandate just to kind of make themselves competitive. It's really just a matter of quantity of production," Bruu says.
There are environmental obstacles, as well, in that liquid absorbs the radio waves, preventing, say, a case of water bottles from being read and tracked. Also, "read rates" are not 100 percent, but are more like 80 or 90 percent. Software integration tools could also be a challenge, and technology to filter the massive amounts of information that will be available needs maturation as well, Edwards sais.
Because of the enormous amounts of information that could be transmitted, privacy is a primary concern for some.
"We worry about the kind of information that can be gathered," says Barbara de Leeuw, executive director of the Rochester and Genesee chapters of the American Civil Liberties Union. "They're only using coding numbers, numerical sequences that don't have my name and address, but certainly the technology would allow for a chip to have more information. So one of our concerns is about consumers and whether this is being used with them or for them or against them."
While de Leeuw believes the technology can benefit business, the privacy questions need to be addressed before RFID moves too far ahead. "They're gung-ho and ready to go, so controlling the information, the breech of security, being able to control whether it's off and on and all that needs to be considered," she says.
Though many privacy advocates are pushing for the RFID technology to be turned "off" once paid for, Bruu looks forward to a day when a grocer would fill his shopping cart for him in advance since it would know when he's out of the items he likes to have on hand. Refrigerator manufacturers are already building the technology into new models so consumers' shopping lists can be automatically created.
"What the privacy people are pushing for are the tags to be turned off at check out. I would think that would ultimately be a government decision because we don't have control. It's not like turning off or turning on a firewall in your computer," Bruu says. "Maybe on checkout you have the option of when you walk through this reader you can disengage or not disengage. To me it's more of a technology issue."
Rochester area educational institutions also have their hand in the cutting-edge technology. Both the Rochester Institute of Technology and University of Rochester have studied RFID.
At the University of Rochester, Dr. Jack Mottley and his students have studied the use of RFID for navigational assistance for the visually impaired. The project involved installing the technology on buildings throughout a community and sending audible directions through headphones.
While implementing such a system may never happen, Mottley says it has great potential and would help bring buildings into compliance with the American Disabilities Act. "It avoids all sorts of privacy issues, and one of the problems for the visually impaired is that there are Braille signs and talking signs, but they require you to push a button. And if you're blind how do you know it's there? This could become another sort of gold standard," Mottley says.
RIT has been involved in the development of antennae and looking at ways to drive down those costs by printing at high volumes and at high speeds, Dr. Bruce Kahn says. The antennae are basically wires, which are probably not recognizable at first glance. Kahn says they're already being used in certain products now like, for example, in the packaging of DVDs.
"It's basically in everybody's interest to make this work. There are a lot of companies who are interested and involved in it. But very little work is being done in academia at least on the printing end of it," Kahn says.
Peer Connect of Rochester is working with the U.S. Postal Service on the business development of the Electronic Postmark, a Web-based service that uses RFID to protect electronic data. Essentially, the Electronic Postmark is a trust builder for those who use it and is enforced by U.S. Postal Inspectors. "It's already happening. The postmark is another massive change in how people will be able to transact and trust the system. It really brings about a number of laws and conditions," says Jason Curtis, CEO and owner of Peer Connect.
"It's not the absolute end-all, but there is nothing else quite like it... It's just one of those things that will imbed itself into everything," Curtis says. "It will change the way we do everything. It's really cool. It's one of the next cool things.
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