ABI Research, headquartered in Oyster Bay, N.Y., has announced that it expects the worldwide RFID market—sales of RFID hardware, software and services—will have a compound annual growth rate of about 15 percent from now until 2013, with annual revenue reaching $9.7 billion by that year. ABI’s research director, Michael Liard, believes the RFID market is growing robustly, across all product categories of RFID technology.
15% over 5 years works out to be 3% growth. 3% is not much more than the growth of the supply chain. One might even argue that this is falling back instead of gaining ground. So, what is the issue with RFID? Does it make sense?
What is RFID?
Unless you have been living under a Rock, most people have heard of RFID. RFID has many different variants, and rather than go through all of them here, I will refer you to Wikipedia article on RFID. Suffice to say, RFID has some cool possibilities for tracking items in a warehouse, and possibly identifying lots and product details without having to go to a database to retrieve the item information.
By eliminating the need to lookup product, applications exists where systems can be down or purposefully missing. This reduces the need to have warehouses wired, which can make for very flexible storage. It would be possible with RFID to setup up temporary tents for peak volume, and still accurately track the inventory.
These kinds of advancements will take some changes to the software vendor’s code, or additional applications. Many of the mainstream WMS systems use telnet over the wire for truck mount and handheld scanners. These systems do have issues when the telnet server is not available. Having a separate application which could process warehouse instructions without a wireless connection has good applications.
Where RFID makes sense
RFID does make sense for some areas, such as closed loop supply chains. The biggest reason for this is the cost of the tag. Until polymer semi-conductor tags become a reality, the cost of producing a tag adds cost to the overall logistics of the item. Because of that cost, the ability to recycle these tags is important. A closed loop supply chain handles this real well.
Polymer tags are tags that can be printing much like a regular barcode label. The development of this type of tag may mean that the cost of the tag becomes effectively a penny more than the cost of a label today. If this type of technology sees the light of day, RFID may just be able to break that rate of growth in the industry and become mainstream technology. Until then the cost of the tag
Active RFID makes sense in areas where monitoring of the product is important. Some tags have the ability to perform temperature logging so that the temperature of the product is recorded and maintained. Active tags also have the advantage of faster turn-around and the ability to transmit farther. This gives companies the ability to ping the warehouse and check inventory with static mount antennas. Rumor has it that some are actually working on Cartesian coordinate location based on the ping.
RFID also make sense for manifest-less receiving. Because of the nature of RFID tags, and their ability to retain additional data about the product they are tracking, RFID tags can work to eliminate manifests. A simple sweep of the truck will indicate correct product. To date, I have yet to see software written for this purpose. The biggest reason is one of control. If I ping one dock door, who is to say the next staging area doesn’t also reply. In theory it is possible.
RFID also helps with shipment integrity. In the USA, with the shortage of good labor, having RFID tags can improve the quality of outbound loads and inbound scanning. It is my opinion that Wal-Mart made a perfect case for that by their RFID initiative. Wal-Mart implemented RFID, and charges suppliers that fail to have these tags a processing fee. This fee in effect covers the labor and tag cost to implement these
Technology issues with RFID
RFID does have some technology challenges.
First is the extra cost of the RFID gun. Even if the company can completely move over to RFID in their supply chain, they still will need guns that have both scanners and RFID readers. Passive guns do have additional power requirements necessary to generate the RF “volume” great enough to trigger the tag. This additional power requirement limits the battery length and number of cycles to run the handheld guns. Truck mount equipment tied to the main electrical system does work well in this area, but for pick-pack operations, this places a tether on the worker.
Further, while active and semi-passive tags do not have latency issues, passive tags do. The latency comes about because the tag must power up, read its data, then “transmit” back. All this takes time. The amount of time this takes may not be long on a single transaction, but if you look at 1 million clicks at 1ms apiece, this is 27 hours of labor. 1ms is a low latency.
Next big issue comes because while most systems handle the unique tag of RFID, most systems do not support the additional data on the RFID tag. So even if you could get a good process of programming the tag, and getting good data on the tag, getting the data out of the tag, is just as big of a problem for most software systems. Many WMS systems are starting to come around, but this usually requires different programs and processes for your IT staff to support.
Telnet sessions for WMS made sense because the telnet process meant programming an application which could manage all the guns at one time, and concurrency. Concurrency comes in because most directed pick/put away systems need to control the single transaction. If I have a directive to pick an item for a staging, I need to make sure I am not giving that directive to two drivers. By making the gun run its own copy of the application, WMS providers must have some process or safeguards so that no transaction has two clients.
Process Issues with RFID
RFID has issues due to proximity. If I “scan” a tag, there is always the problem of getting the correct tag. Proximity can be controlled by the type of tag and its properties, but two tags, on two pallets sitting side by side, can eliminate this for most. Therefore, you have to get into scanning after pickup. This works by not triggering the scan until the truck has picked the pallet and is in the isle. Delay from the wrong pallet does occur, and operators are still required to pick based on sight, not a tag.
RFID still requires some other form of pallet ID if the tag stops functioning. While the QC on tags is very good, the likelihood they will get damaged, fall off or crushed is very real. This additional paper or label requires additional time and resources. Making sure these two are in sync adds time.
It is also possible that if two tags fall off, to get the tags switched. QC control becomes a real issue to make sure the tags are correctly placed.
Recycling the tags takes time, effort and expense.
Is there real growth?
It is my opinion that RFID is a niche solution at best. 3% growth is not growth. This growth is going to continue to be hampered by technology and process issues that need to be resolved. Until these are better resolved, WMS systems may never fully support them.