RFID Gazette

RFID Gazette - Tues May 08, 2007

Yet More Anti-RFID Envelope Makers
National Envelope Corporation is the latest company to go after the potentially lucrative anti-RFID envelope and wallet market with their Smart Card Guard products. The envelopes can be used to protect contactless credit cards, ID cards, and e-passports. [via Contactless News]

A Smart RFID Mirror
Paxar is currently showing off its smart mirror at a show in Miami, Florida. The mirror, typically to be used in retail clothing stores, gives customers information about a tagged item of clothing. [via RFID Update]

Free RFID Discovery Service
Affilias is offering a service to companies that want to share RFID EPC data over the Internet. What information is to be shared can be configured on a per subscriber basis. Affilias calls the service ESDS (Extensible Supply-Chain Discovery Services) and hopes it'll become an industry standard. [via RFID Journal]

RFID Gazette - Mon May 07, 2007

A roundup of recent RFID-related news.

NFC Vending Machine Demo
RFID in Japan has a YouTube video showing someone buying a drink from a vending machine and paying for it with their NFC-enabled cell phone.

RFID Implants For Payment Systems
A nightclub in Barcelona, Spain is allowing patrons to use implanted RFID chips to enter a VIP area and pay for drinks. Said one of the owners of the club:

I know a lot of people have fears about it. Having a radio-transmitting chip under your skin makes you very unique.

Right. So do horns sticking out of your head, which I'll have implanted before an RFID chip.

Dual-Purpose RFID Labels
Checkpoint Systems is introducing an inventory tracking and anti-theft system for retailers. The system uses RFID labels that serves the dual purpose by having two different circuits. This is apparently worrying privacy advocates who feel the system might track customers who mistakenly carry away chips after a purchase.

RFID Gazette - Mon Apr 09, 2007

Sirit Gets California Toll Road Contract
RFID use in toll roads continues to increase in the United States and the OCTA (Orange County Transportation Authority) is expanding their own existing use. They've awarded Sirit a three-year contract for US$2M in RFID transponders as an extension of a prior contract. [via RFID Update]

RFID Asset Tracking For Jewelry Retailers
Jewelry retailers can breathe a bit easier with a tracking system from from RSI ID Technologies. The system includes tags, readers and software, and allows retailers to keep track of in-store jewelry items as well as provide data on which pieces are generating interest. [via RFID Journal] A number of jewelry stores in the Middle East have already been using a different RFID system for asset tracking.

How RFID Helps
CRM Buyer gives a good example of how RFID helps in a number of applications including supply chain and security. For example, US ports handle about 7 million containers yearly but there are only enough personnel to inspect about 2%. RFID locking systems and other security measures in terms of supply chain process can reduce the security risk. The CRM Buyer article is fairly general and is targeted at those new to RFID use in SCM (Supply Chain Management).

Wal-Mart RFID Plans Change

Computer World has a series of recent articles focusing on Wal-Mart's RFID efforts. First and foremost, Wal-Mart has shifted their efforts towards stores rather than distribution hubs.

This shift is due to an acknowledgement that they've missed their own goal of installing RFID in at least 12 of its 137 distribution centers by last year. Second, despite the fact that many small Wal-Mart suppliers have had trouble finding an ROI (return on investment) in implementing RFID in their supply chain, Procter & Gamble has found Wal-Mart's RFID effort effective.

Now, it should be pointed out that not only was P&G one of the first 100 Wal-Mart suppliers to implement RFID, they're also a giant company themselves. Their ROI in RFID can be realized in volume transactions - something small suppliers just cannot accomplish.

While it'd be nice to think/ hope otherwise, the evidence so far, plus statements from some smaller suppliers, suggests that compliance with Wal-Mart's RFID initiative is hurting them. Nevertheless, Wal-Mart is still promoting RFID adoption.

Canadians Eager For RFID In Grocery Stores?

A survey in Canada suggests that we are eager to see RFID in grocery stores. I'm not one of them. In fact, I find it kind of surprising because Canadians are generally more conservative about technologies that potentially invade privacy. At least, they have been in the past, when RFID-enabled money cards (not credit, not debit) were trialled.

Well, things do change, including attitudes. And it's more than possible that this video from IBM is the reason for it. It's been running in Canada since at least 2005, possibly earlier.

The survey findings seem to contradict the general reaction of consumers towards RFID chips in everything they buy. (This is based on an educated guess, from the thousands of RFID articles I've scanned or read in the past year.)

If the opinions of the 1,056 shoppers surveyed are truly representative of 35+ million people, then there's hope for the acceptance of item-level RFID. On the other, given that 80% of those surveyed had never heard of RFID, I'm a bit doubtful that the general Canadian populace is eager for it in their grocery items. That said, if IBM and Marnlen's new clipped tags are used, there may be more consumer acceptance in Canada and the US.

RFID and Wal-Mart: Going Over Like A Lead Balloon?

I doubt even a "little" thing such as supplier revolt will divert the steamroller known as Wal-Mart from pushing their RFID program forward. While suppliers probably aren't at the revolt stage yet, it does appear that they're not thrilled but afraid to criticize. And they have yet to find an ROI (return on investment), mainly because Wal-Mart declared last year that suppliers had to not only comply but had to find their own ROI. Wal-Mart wouldn't help.

That's a huge mistake, as far as I'm concerned. Instead of acting like a dictatorial government and holding threats of financial ruin over every supplier's head, they could have taking their integration sessions a bit further and nudged suppliers along with advice. Sure they're in business to make money. So charge for it then and stop being doofuses. I can't see Wal-Mart bartering, but you never know. For financially -strapped suppliers, Wal-Mart could consider product in exchange for some help finding ways to make RFID work for individual suppliers.

Ultimately, helping their suppliers find the ROI is a much wiser course of action that would help RFID take a better toehold in the supply chain. Not doing so suggests that Wal-Mart doesn't really care about anything but their bottom line - which is already the perception people in small towns have, where the retail giant has displaced mom and pop stores.

RFID On CSI:NY TV Show

Singer Nelly Furtado appeared on last night's CSI:NY franchise as an amazingly successful shoplifter at high-priced New York boutiques. Towards the very end of the episode, one of the CSIs found a device in a purse they confiscated from Furtado's character. And guess what? It was a "credit card scanner" which, according to two other CSI characters is "based on RFID", "works remotely" and "from three feet".

I'm guessing that the writing team read that New York Times article about the inherent security flaws in RFID-based credit cards, which I've discussed a few times. No doubt the episode was shot months ago. Since the NY Times article, credit card companies have skirted around the issues or outright denied them, but have said that their cards (meaning the new generation) are secure and have new security features.

Still, that's not going to stop speculation from TV shows and movies. RFID tech was also mentioned in Law + Order: SVU a few months back.

How Will RFID Affect Jobs?

While RFID is expected to create many jobs and opportunities, this isn't the first time that people have predicted that the use of RFID in the enterprise may affect jobs, namely the loss of them. There are other concerns, such as employees will be affected by process. Amid concerns about how RFID and employees in the retail sector, the ILO (International Labour Organization) met in Geneva earlier this year to discuss the issues. Two reports resulted, one entitled Social and labour implications of the increased use of advanced retail technologies (PDF, 60 pgs). [via The RFID Weblog]

The latter report is split up into 7 main sections:

1. Retail trade: Characteristics, trends and prospects
2. Retail trade: Regional overview
3. Technology and supply chain management
4. Radio frequency identification
5. RFID and commerce
6. Social and labour implications
7. Social dialogue

   

Regions analyzed include the US and North America, the European Union and other parts of Europe, Japan and other Asian countries, and Africa and the Middle East. Included in the report is a discussion of the benefits of RFID, both in pallet-level and case-level tagging, as well as how RFID affects workflow processes.

While the report says that some jobs may be lost, employees could be trained for customer service work. I find this hard to accept, as not everyone is cut out for customer service. Since RFID will make business process workflow more efficient, it's likely that labor needs will be reduced. There will be a shortage of skilled workers in relation to RFID, so employers considering a switch to RFID should consider in advance where they may want to reposition to-be-affected employees, if at all. Retraining may have to be part of the process, which will potentially cut into any profits gained from the use of radio frequency technology - something to be considered.

RFID Roundup - Sat Nov 25/06

RFID Mirrors
A new mirror from Paxar for the retail clothing industry uses RFID technology to help customers learn more about a particular item of clothing, including garment descriptions and suggestions for matching items and accessories. Touching the mirror will also signal sales staff that a customer needs assistance. [via The Retail Bulletin]

RFID + Parking
"Meter maids" are getting help with the out of control parking situation in South Korea thanks to RFID tags on every car. Handheld readers would scan car tags to determine if a particular car is allowed in the city on a given day, and a fine issued if not. [via PSFK]

Managing RFID Adoption
Line56 has a three-page article outlining how to break RFID adoption into five stages, to more easily understand what your returns might be, as well as how process workflow might be impacted. The five stages they discuss are Creep, Crawl, Walk, Run, and Sprint - the latter of which includes actual implementation. I've only scanned the article but it does appear to have some generalized value for a manager researching how to go about RFID implentation for their company.

Marks & Spencer Clothing Stores To Rollout RFID

One of my biggest beefs with large department stores is that there is so much variety of style and size that I often can't find what I need. Marks & Spencer is one clothing retailer that is trying to solve this and other inventory management problems through RFID.

Based on a successful trial, M & S plans to triple the number of their stores, up to 120, that will use RFID item-level tags on merchandise. Their target period is spring 2007. During the trial period, the retailer doubled the number of their tagged items to nearly 50Mln over the summer and fall seasons. This necessitated item tagging by 15 suppliers in 20 countries. The current trial involves items from six clothing departments, which will be expanded to thirteen by fall of 2007. Said James Stafford, head of clothing RFID,

Stock accuracy has improved and stores and customers have commented on the more consistent availability of sizes in the pilot departments.

This highlights one of the benefits of item-level RFID tagging in retail: more efficient control of out-of-stock items. Better inventory management, of course, leads to satisfied customers who can actually find what they're looking for, in their size, and thus greater profits.

[sources: Computer Weekly, VNUNet]

Consumers Want Fingerprint Verification?

According to a Harris Interactive survey, 72% of 2000 people surveyed seem to indicate that fingerprint scans at ATM/ debit machines would make them feel more secure. I have a hard time believing this, and Evan Schuman at Storefront Backtalk says there are reasons to be suspicious of such data because of the way that a question about biometrics was worded.

Fingerprinting still and probably always will have connotations of being arrested, despite the fact that some employers expect it. I still believe that if biometric authentication has to be used for various reasons, with or without RFID, that consumers would rather it be something like voice recognition. Though that has a number of technical issues that need to be resolved, including its usability in public. On the other hand, other recent surveys in other countries suggest that younger people would be all for identification via palm vein scans and even from implanted radio frequency chips.

Cisco High Tech Ballpark

Baseball's Oakland A's are moving to Fremont, California and a new US$500M high-tech ballpark. Not only will fans be able to to watch instant replays, order food and drink, and communicate with friends over a wireless network, they'll be able to download online tickets to their cell phones, which will be validated with RFID readers at the stadium. [PC World via Loftware]

Since the Soccer World Cup earlier this year, a number of other sports including cricket, football, NASCAR racing, golf, and hockey are using RFID in numerous capacities. This includes game use (soccer: to settle goal decisions), asset management (NASCAR: track tires), ticketing and concession payments, seat management, etc. There have even been a few soccer teams suggesting that their star players be implanted with radio frequency chips.

Contactless Credit Card Confusion: Biometric Authentication

The ability to skim information discreetly off of the RFID chip in contactless credit cards is causing a stink, thanks to a big NY Times article recently, and eliciting questions that either credit card companies either have ignored or never asked themselves during the design phase. One important issue is secure use, another is credit card selection when a consumer is carrying more than one contactless card.

Of course, there is a way that these cards could be made more secure, but it would require more technology and another generation of cards before they're widely available. Biometric techniques are already being used for access control and identity verification, such as in e-passports. Several forms are in use, including fingerprints,  palm vein scans, retinal scans, and voice recordings. (DNA biometrics is infeasible, at least at present.) From a consumer perspective, most of these techniques are invasive, with maybe the exception of voice recordings.

People are used to recording their voice, so voice biometrics may be a method for solving both issues: secure use and card selection. During a transaction, the customer would be prompted to select the card they'd like to use and recite their name.

Problem is, this isn't a guaranteed solution, as there are technical issues that might hamper its use. For example, if you are in a very noisy shopping mall during Xmas holiday rush, voice authentication may not work unless your mouth is close to the merchant scanner's microphone - which leads to issues of hygiene. The other problem, and more serious, is what if someone uses a recording of someone's voice? Ambient background noise would be expected during a purchase (except online), but with cheap/ free audio editors, that's not difficult to add. And if there is no cashier to verify that a person using a card is actually speaking instead of replaying a recording, then security isstill an issue.

This is, of course, something that all voice biometrics systems will have to deal with, but biometrics tech is costly, and if a merchant is "forced" to use it, there's another source of inflation for our cost of living. But what really worries me, though, is whether these sorts of flaws will lead to the thinking that we "have to" use something more invasive such as retinal scans or palm vein scans just to buy our groceries. Because if cold, hard cash and notes are eliminated, that's the direction we'll have to head down to "protect" consumers from security issues of contactless credit cards. Even if it's as simple as the idea that your contactless credit card requires your fingerprint to be recorded.

Contactless Credit Card Confusion: Wrap That Rascal

Bruce Schneier, a writer for Wired Magazine, has his own blog that has a short post about the ability to skim information off the RFID chip on new contactless credit cards. This is a post worth reading for the comments by readers. Many of the commenters echo my feelings about contactless credit cards and the supposed time-savings they offer, not to mention their security flaws. One commenter, Nicholas, says that you gain almost nothing since while you don't have to take your credit card out of your wallet, you do have to take your wallet out of your pocket. In other words - whoop-de-do. And even that little bit of time savings may not last. A bit further down the post, reader Daniel asks what happens when people start carry two or more of these cards. How will store scanners know which card to charge?

These contactless credit cards are expected to become popular for small transactions, so security issues aside, the likelihood that consumers will carry more than one, is increased. A merchant's RFID reader would thus detect more than one card in your pocket, unless you use an anti-RF sleeeve or wallet.

If you don't use a sleeve (but you should - always use protection), that means you have to remove the desired card from your wallet/ purse. If you do use sleeves, then you still have to remove the right card - not just from your wallet but also from its sleeve. Where exactly is the time saving in that?

These are more reasons why I've said for some time that contactless credit cards are stupid idea that only benefit the issuing companies and the merchants, not the consumer. And they're presently more of a risk to carry than regular credit cards. But since they're probably here to stay, wrap that rascally card with an anti-RF sleeve - something issuing companies should already be doing for you.

The Network Effect Of RFID Use

Paul Faber of Industry Week gives a very nice explanation of a phenomenon called the network effect, where the value of a good or service increases in direct proportion to the number of people or companies using that good or service. For example, early email systems were only of value to those few researchers who had access. Now, email access is ubiquitous and valuable. Faber discusses how the network effect applies to RFID in retail, EPCglobal's EPC (Electronic Product Code), and container tracking.

The beauty of the EPC, aside from the fact that it's being promoted as a standard, is that it is designed for the sharing of information, collected by RFID readers, between organizations. So anyone in a particular supply chain that uses EPC could benefit from it. So while Wal-Mart's use of it is unfortunately relatively isolated, their mandate to introduce their suppliers to RFID and EPC should increase the value of its use to both them and the suppliers, especially beause Wal-Mart plans to share such data. However, at present, RFID in retail, Faber suggests, is not large enough yet to enjoy the positive side of the network effect, "[d]ue to the incomplete infrastructure of EPC RFID tools." Layoffs in companies such as Checkpoint Systems would bear that out.

More Bookstores Using RFID

A number of bookstores in Europe are following the lead of libraries in an effort to tag their books to manage their supply chain and assets. While the core functionality is the same, bookstores have a slightly different purpose for tagging than libraries. The Dutch bookstore chain BGN recently started tagging their books and expect their return on investment to manifest in only 14 months.

Selexyz, the largest bookseller in the Netherlands, is doing the same thing, with the intent to control their restocking efforts and reduce labor costs. They've found that their special kiosks that allow customers to perform natural language searches for books has resulted in a 50% increase in sales. Accuracy in their processes has been 100%, except where manual processes are still being used.

Because of this success of this RFID project, they plan to follow suit in all of their stores by year-end 2007. Since big bookstores came into existence, they've not only cut earnings for the average author but also for themselves and publishers. If RFID can reduce costs for book chains, almost everyone in the loop wins (except any employees displaced as a result).

RFID Applications: Shopping Carts

How many times have you seen a shopping cart left abandoned far away from it's rightful place? Personally, I find it annoying when people are too lazy or immature to return them. A prank's a prank, but leaving them around amounts to a sort of pollution. Not to mention, costs owners between $150-200 per cart, if they cannot be recovered. Well, a new tracking system from Intelligentz could stop the cart pranks of drunken college kids. It's kind of a combination RFID application: security and retail, with a bit of consumer use thrown in: asset tracking.

The problem is that there are people, say the elderly, who need the carts to take home their purchases. So the solution that Intelligentz has devised allows carts to be removed from a premises up to a certain distance - in this case a mile - by using long range antennas in light poles in the parking lot. This distance limitation allows management companies to more easily round up carts.

[via RFID Journal]

Tagging Books With RFID

Libraries are already tagging books and other inventory with RFID, so it's not surprising that some large bookstores, such as the Dutch BGN [via Silicon] chain, are also chipping books. The book applications of RFID are essentially the same with in both environments, with the exception that one is selling the inventory. But when big book chains first started up and the trend caught on, they slashed the profit margins to themselves, publishers and authors. Obviously, this is an application where item-level tagging is essential.

Given the cost of item-level tags compared to case- and pallet-level, you'd think bookstores would be reluctant to reduce their margins even further. On the other hand, since using RFID means reducing the chances that a book doesn't get sold because it was mis-shelved, the ROI (return on investment) may be worth the 14-month wait they are expecting. While BGN is claiming that it's easier to track out of stock and popular books, it's really nothing that barcodes cannot do. However, one great advantage of item-level RFID is that inventory can be done without shutting up shop and having the entire staff document everything. And that kind of ROI is very measurable.

Offshoring Affecting Australian RFID Industry

While radio frequency technology has been around for a long time, its use for RFID and smart cards is relatively new, maybe 20 years at most, in limited trials, with the bulk of projects conducted only this decade. Still, offshoring has reared it's head enough that an Australian smartcard firm has found the need to close up one factory in Melbourne, Australia, and move part of its operations to Christchurch, New Zealand. The result is that 70 jobs will be lost in Australia and 30-40 created in New Zealand. Approximately 10 Australian employees will be re-employed.

Australia has a number of ongoing RFID projects including chipped driver's licenses, and has even been working on a code of practice since mid-2004. Local firms, however, are being outbid by not China and India but countries like Germany. The country's AMWU (Australian Manufacturing Workers' Union) suggests that this is partly attributable to "... the lack of vision by the Australian Government."

[sources: Australian IT]

RFID Roundup - Fri Sep 22/06

Free Contactless Payment Systems For US Merchants
NAB (North American Bancard) is giving away RFID contactless payment systems to 3000 retailers, small and midsize, in 20 large US cities. The systems use VIVOtech readers and VeriFone terminals, and payment is made with a contactless credit card, such as the 17 million issued by banks like J.P. Morgan Chase and others. Supported cards include MasterCard PayPass and American Express ExpressPay, as well as cards by Discover and Visa. Read RFID Journal for more details.

China Tests IP-XTM RFID Technology
A radio frequency technology called IP-XTM is being tested in several sectors in China. The technology, whose platform is provided by iPico, allows RFID tags to be authenticated even when objects they're attached to are moving at high speeds (up to 240 kph). IP-XTM is expected to save millions of dollars logistics, supply chain management and other processes. [via China Tech News]

RFID To Be In Japanese Driver's Licenses
The US and Australia aren't the only places pushing for ubiquitous RFID-enabled identification cards, including driver's licenses. All Japanese driver's licenses will be getting RFID tags. This migration will start as early as Jan 2007 and be complete by 2008, depending on the prefecture. [via RFID in Japan]

Chinese RFID Demand Driven By Security Sector?

According to a CCW Research report, China's demand for RFID will be driven by[China Tech News] public security applications. While this may be true, the sheer size of China has resulted in several RFID projects, some of massive scope, and with great potential for more radio frequency programs. Here are a few tidbits about Chinese-related projects:

• China recently announced a gigantic project for 125M contactless train tickets for their railway system - quite possibly the biggest project of it's kind in the world.
• NXP Semiconductors (formerly Philips Semiconductors) is finding demand [EET Asia] for it's UCODE EPC G2 UHF chips, which were apparently selected because they conform to Wal-Mart's RFID mandate. Not suprising, given the probably high ratio of Chinese manufacturers amongst the retail giant's suppliers.
• In fact, Chinese-made items make up half of the product sold by giant US retailers. China is also looking to implementing RFID in the healthcare and manufacturing sectors.
• An older article at this site says that manufacturing logistics and suply chain issues are a big driver of RFID implementation in China.
• China has also been tagging livestock and has been testing RF tags for luggage tracking for some airlines.

   

As you can see, it's not just public security apps driving demand for RFID in China. They have so many projects of such large scope that they had considered having a Chinese RFID standard, though that idea seems to have passed. The government's Ministry of Science and Technology did come up with a Chinese RFID policy white book.

Wal-Mart Doubling RFID-Enabled Stores

Contradicting even their own reports of their own setbacks and that many vendors are lagging behind in implementing RFID in their supply chains, Wal-Mart has announced [Extreme RFID] that they will be increasing the number of their own stores using RFID to over 1,000, by Jan 2007. As a spokesperson put it, they are moving ahead aggressively. They've had to push suppliers in the past to start implementing RFID technology by announcing mandates and deadlines for compliance. But while I'm not big on their whole project in the first place, I have to give the retail juggernaut credit: they've persisted despite setbacks.

RFID: Predicted Areas of Growth

Item-level RFID for retail applications is expected [RFID News] to have a good year in 2007 says AbsoluteSKY, Inc., of Montreal, Canada. The company is already working on applications with "four major retailers", with announcements pending. AbsoluteSKY announced a deal with Universal Surveillance Systems earlier this year for "retail RFID products" that would help retailers track product in real-time. Real-time location systems (RTLS) seem to be increasingly of interest to retailers and other businesses.

Another RFID application area expected to enjoy growth [IDTechEx] is in the use of smart cards and key fobs for payment systems. Key fobs are already in use in many countries. Some North American gas stations have been using contactless key fobs for "quick payment" lanes for years now. Smart cards are not only being used for payment systems but also for government ID, health cards, and driver's licenses in a number of countries, including Australia. China alone is expected to issue nearly a billion smart cards to adults over the next two years. Additionally, banks like Chase in the US have been distributing RFID-enabled credit cards with increasing frequency. In fact, a recent Ipsos Insight survey indicates contactless credit cards would be used by over 100 million Americans.

In terms of hardware, the RFID reader market is expected to be worth [RFID Update] over US$1 B by 2010, according to a VDC (Venture Development Corporation) report (PDF, 2 pages) issued last week. More than 80% of the market is for fixed-position readers, with the rest going to handheld units and modules integrated with other hardware such as label printers. This considerable difference between fixed and portable RFID readers is expected to continue, as readers will be embedded in also sorts of stationary equipment, desktops, cabinets, etc., in numerous near-future applications. The gap will decrease slightly, however.

More RFID Woes: Wal-Mart Sued For Alleged Patent Violation

Wal-Mart is being sued for supposedly violating an RFID-based inventory control patent filed in 2002 by a company called RFID World. Also named in the suit are Gillette (now owned by Procter & Gamble), Michelin, Home Depot, Target, and Pfizer). Visit RFID Journal for more details of the suit.

Wal-Mart and Target are probably two of the largest retailers using RFID for inventory control and supply chain management. Conflicting media reports suggest that Wal-Mart has had some difficulties with their RFID rollout and might have scaled back their expectations, but they say they are moving ahead. Some of their suppliers are reluctant to use RFID because they have not perceived a reasonable ROI (return on investment). As a result, some suppliers have lagged behind expected milestones from Wal-Mart, causing the retailer to get heavy-handed and mandate the use of RFID by all suppliers.

While implementing the technology is often perceived as being expensive, one small manufacturer managed their initial RFID trial for around US$6,000, with just one employee. Part of the misperception might come from the confusion betweeen item-level tagging and pallet- and case-level tagging - the latter two of which are generally less costly than item-level tagging. However, with a lawsuit in progress, one which suggests that suppliers will also be in violation RFID World's patent if they comply with Wal-Mart's standard, it's possible that there will be more setbacks in Wal-Mart'sRFID rollout.

New Technology Mashups: VoIP and RFID

Here's an interesting mashup of two relatively new technologies, VoIP and RFID. Japanese department store giant Mitsukoshi has set up a system in their dressing rooms that makes use of both technologies in an innovative way, using a special Cisco VoIP/ RFID phone.

Customers use the dressing room phone's reader to scan the clothing item's RFID tag, then use the phone to talk to an employee. The employee can use their Cisco phone, which has a large display, to see what similar items are in stock, retrieve the items, and take them to the correct dressing room.[ Storefront Backtalk via The VoIP Weblog]

Now is this a brilliant use of technology or what? Mitsukoshi is not the only retailer to use RFID tagging, but they're one of the first I've heard of who have combined it with VoIP. Not only does this setup save the retailer lost wages from the employee standing around outside the dressing room, but the customer's happy because the employee is bringing similar items with minimal effort - and probably in the right size.

Of course, there's one huge drawback with the way things are set up: all those grubby hands and ears touching the dressing room phones. Still, this is a novel use of technology, hygiene issues aside, and certainly a scenario where upper-end IP phones with a display panel are worth it to the business.

VDC: Increasing Market For RFID Transponders

VDC, Venture Development Corporation, announced that the global for market for RFID transponders, in 2005, reached nearly US$750 M. Expected CAGR (Compound Annual Growth Rate) through 2010 is estimated at about 26%. Revenue shipments will likely exceed US$2.3 B within five years time.

A statistic of note is the expected increase in difference between indirect and direct channels of distribution for RFID transponders. Indirect channels will grow at increased rate over direct channels. This is due to the increasing number of RFID solutions providers, particularly for the retail and pharmaceutical supply chains.

What might also drive an increase, at least temporarily, is that the US FDA has mandated that the pharmaceutical industry provide an RFID pedigreeing solution for select drugs by the beginning of Dec 2006, and that the industry is judged by some to be scrambling to meet that goal. The FDA's original plan to have all drugs RFID tagged by early 2007 has been postponed.

More information about the transponder market is available for purchase at the VDC website.

Wal-Mart Moving Ahead With RFID Plans

Last week, Wal-Mart's new CIO, Rollin Ford, talked about RFID at the NRFTech (National Retail Federation Tech) conference near San Diego. While less than 10% of their 6600+ worldwide stores are RFID-equipped, they do plan to continue with their RFID rollout. [via Extreme RFID]

This is despite all the little indicators that suggest that maybe their plans aren't going so well, primarily because their suppliers are lagging behind in implementing RFID due to the cost and the lack of incentive, from their point of view. (A Forrester Research report from 2004 says that the start-up cost is about $9M for the typical Wal-Mart supplier.)

Some Retailers Hold Back On RFID Projects

According to a Forrester Research study, a small fraction of retailers and consumer goods manufacturers deferred their RFID projects due to concerns about violating consumer privacy. [via Newsfactor]

The concern of these companies is that some of their own uses of RFID may inconvenience consumers or put their private information at risk. Older Forrester research from 2004 indicated that back then, many suppliers felt there was no business case for their use of RFID.

Coupled with issues of privacy, some suppliers still likely feel that there is no onus to speed up their RFID projects. Retailers, on the other hand, are more likely to see some ROI (Return on Investment) from their RFID usage. However, it's been said many times that the real ROI for retailers will come from item-level tagging. However, such RFID tags are currently too costly to implement on a wide scale.

RFID Roundup - Wed Aug 2/06

Are things really this bad in Australia with their Aus$1.1 billion RFID smartcard project? Well, if it IS like this where I live, I'd prefer a picture of my cat on my healthcard, thank you.

On the other hand, another trial in Australia is showing that RFID is producing benefits in the CPG (Consumer Packaged Goods) supply chain. Participants include Procter & Gamble and Gillette (now owned by P&G). The trial uses EPCGlobal's network. [via RFID Journal]

A Canadian Crown Corporation (i.e., a for-profit, government-owned corporation, but presumably owned by the citizenry) has been using RFID for several months for functional analysis, and the project will now be rolled out with the help of Ship2Save and AAID Security Solutions. [via XTVWorld]

Everton Stadium is introducing their new Everton RFID-enabled smartcard for regular use starting Thur, Aug 3/06. To promote use of the card, holders get loyalty points for its use. [via Paddock Talk] I'm not 100% sure from the article, but I believe that this is a soccer stadium in England.

First soccer and then NASCAR racing, now golf. Besides the RFID-enabled golf balls that an American company is offering, an exclusive golf club near London is using RFID to ensure that only members use the course. The use of RFID was implemented primarily to allow the club to continue its practice of show-and-play for members. That is, no tee-off time needs to be booked, unless a player is a guest. [via RFID Journal]

RFID Can Track Mundane Information Too

Is it just me, or have you seen TV commercials depicting something like the shopping scene that Sophia Chua writes about at Ferret: A guy walks into a store and starts shoving items into his pockets. As he's leaving, a security guard stops him to give him his forgotten receipt. Seems everything in the store is RFID-tagged and there's no need to checkout, as RFID readers have done that for him, billing the smartcard in his pocket.

The closest I've experienced to this is at a large supermarket, where I could checkout my own items in the fancy new self-checkout lane. By waving the items in front of a barcode reader, I'd get a tally, then paying for everything with my ATM or credit card. It beat having to wait in line, and the store/ credit card company didn't collect any extra information from me than if I'd gone through a clerk-assisted checkout.

But had it been RFID, the items purchased would be tagged. And this is what troubles some people. No one is lurking around corners waiting with barcode readers to waiting to figure out what you purchased. But with RFID-tagging, what if someone has a wireless mesh grid set up with RFID readers, and they can figure out that I eat Count Chocula for breakfast instead of Mueslix? Or that I just finished shaving with those cheap plastic razors instead of a million-blade expensive razor? Or that I take my vibrating tootbrush for overnight romantic trysts with my secretary?

Okay, not so dire. At least, not yet, for shopping anyway.

RFID Roundup #1

RFID manufacturer Intelleflex announced US$15.5 million in series B financing from Morgenthaler Ventures. Investors from series A financing also participated. Intelleflex makes RFID tags that are known as semi-active or semi-passive. Because of their battery, this type of tag tends to produce a stronger signal and, presumably, a better read rate. Like passive tags, they activate in the presence of an RFID reader's signal.

With the success of RFID trials during the FIFA World Cup football (soccer) tournament in Germany earlier this summer, several teams in the UK plan to use it for a variety of purposes including expediting access and reducing scalping. Apparently, Liverpool Football Club has been using contactless cards since 2003. Unfortunately for fans, the new practice reduces the chances of a season pass holder reselling a ticket from a single game. I know minor league hockey fans who sometimes do this when they cannot make a game.

Passive RFID tags have dropped down in price to as low as US$0.01 per. So the real cost in implementing RFID is in the enterprise information system, including database storage and data mining.

Privacy advocates will be happy to know that anti-RFID advocate Andrew Tannenbaum of Vrije University is working a on palm-sized anti-RFID device. There's no mention of the use of a Faraday Cage in their source article.

I previously mentioned IDTechEx's database of RFID case studies. According to SiliconFen, the report actually indicates that there are closer to 10,000 instances of RFID in use, with 60 new cases monthly. There are estimated to be around 1000 RFID suppliers.

Database of RFID Case Studies

IdTechEx is keeping a database of RFID applications [via Logistics Today] and trials from around the world. Here are a few salient points from the database, at the time of this writing.

(a) There are over 2000 case studies involving over 220 companies in 76 countries. Over three 300 of those studies were conducted or started between January and July 2006.

(b) The top 5 application areas were as follows:

(1) [410 cases] Retail, consumer goods.
(2) [352] Financial, security, safety.
(3) [292] Passenger transport, automotive.
(4) [236] Leisure, sports.
(5) [191] Land and sea logistics, postal.

I would have though that there'd be more applications in Healthcare [161 cases] or Manufacturing [152] studies. Thankfully, there is no "cyborg" area of study. Unless that's under Military [42 cases]. (In terms of national security, what I think would be interesting to track is how many of the countries participating in RFID studies are actually part of the United Nations.)

The case studies are not free, costing US$750 (€600) for one application area, or US$2800 (€2250) for all areas, for one year of access. Still, there is a substantial amount of information on the public pages, as well as sample reports for download.

RFID Contactless Payment: Too Much Information?

Despite a savings from RFID-enabled inventory control and claims last year of high success rates, retailer Tesco has been having problems with their RFID trials. The foremost of this has been from customer concerns, as well as getting agreement with suppliers on who'll pay for RFID tagging of product.

Wal-Mart has had similar problems with suppliers and, like Tesco, has delayed deadlines for RFID implementation in someof their stores, or rolling back projects altogether, despite trying to throw down ultimatums about RFID use.

Other problems are more technical, and include UHF (Ultra High Frequency) interference between other RFID readers, even from a distance of a few kilometers. Much of these technical problems come from the lack of a single RFID standard, as well as different regulations about radio frequency use from each country's government, sometimes their military.

On the consumer side, American grocery chain Piggly Wiggly has had problems with acceptance of their biometric scanners. While some biometric scanners have been combined with RFID, Piggly Wiggly's are not. But similar to RFID concerns, some people feel that biometric scanners, with or without RFID, just require too much
information that a retailer simply does not need from the consumer.

From the consumer point of view, why should they care if RFID or biometrics makes a retailer's life easier if it gives the consumer little benefit and violates their privacy? In their eyes, a fingerprint scan in the hands of the wrong person definitely constitutes that. So does someone intercepting info from their RFID smartcard. If a government's employees cannot even keep important laptops full of data out of the hands of thieves, they feel, what's to say that a retailer's employees won't steal information, or facilitate, the theft of data collected with RFID and/or biometrics?

To get around these problems, besides technical issues and government regulations, consumers concerns have to be addressed with incontrovertible evidence that RFID-based payment systems are secure. The perception is that this critical issue has not been dealt with yet, even from the point of view of technology-savvy people.

Rethinking Data Flow For RFID Deployment

One of the common complaints about RFID, from companies considering its use on their products, is that item-level RFID tags significantly bump up the cost of tracking product. With the conventional barcode, one code typically sufficed for all items of a specific product. With item-level RFID, every single item has to be treated distinctly from its siblings on a store shelf, or what have you.

So if you have 1000 items to send out to a distributor, your cost of manufacturing and shipping goes up by 1000 times the cost of an item level tag, not to mention the cost of pallet- and case-level RFID tags. As well, each item's RFID tag has to be programmed with a unique code in the manufacturer's database. In this case, that's 1000 RFID codes instead of one barcode.

Imagine if you manufactured millions of items per year. This forces an overhaul in a manufacturer's product database and in system software (data collection, querying, reporting). In other words, more costs to an RFID deployment project, when barcoding works well enough for most manufacturers. (Keep in mind that, often, its the distributors that want to track items.)

At item-level RFID tags running around 40 cents, it's not always financially feasible to use them for low-ticket items. Pallet- and case-level tags tend to not only be cheaper, but there's obviously less of them required for a shipment.

But the prices of item-level tags will go down. According to an article at Sterling Hoffman, Alien Technology announced a sub-ten cent passive RF chip at some point in the recent past. In fact, a Google search suggests the truth of the claim, but the linked URL does not exist on Alien's website. There is, however, a press release for a 12.9 cent EPC Class 1 chip. Still, RFID Times suggests that sub-five cent RFID tags will become commonplace, although probably not until 2013.

I don't doubt that the sub-ten cent barrier will be cracked, and likely well before 2013. It also helps that companies like Gillette recently ordered 500 mln chips. Evan Schuman at Storefront Talkback writes that 200 mln item-level tags will be sold this year out of a total of 1.3 bln RFID tags, followed by 2.2 bln next year. Procter & Gamble (new owners of Gillette - way to corner the razor market) is also conducting two RFID tests on their Fusion five-blade razors. (Which may explain why the darn things cost so much, and why I shave once a week now lol.)

These kinds of large orders will eventually bring the price of all types of RFID tags down. Unfortunately, most small vendors cannot currently afford to use item-level tags. This financial limitation hampers initiatives such as Wal-mart's plan to have all vendors eventually supply all their products complete with item-level RFID tags.

Alternatives being looked into included both "light-based" tags as well chip-less tags that created from thin-film transistor circuits and other means. Of course, there's always the option of combining RFID with barcoding, but that wouldn't let P&G know how many times a week I'm shaving.

Tesco delays RFID implementation at its stores

After facing problems with RFID trials, the leading supermarket Tesco have decided to delay the implementation of RFID technology at its various stores. Earlier, the supermarket had planned to deploy RFID tags and readers in 1,400 shops and distribution centers this year. However, it has installed just in 40 stores and one distribution centre.

Peter Harrop, Chairperson of RFID research specialist IDTechEx notes -

A lot of rollouts have had problems with one reader interfering with another because retailers are using UHF bands that are not as efficient.

However, the supermarket does not want to postpone the implementation of RFID technology forever. It has decided to tag transport items such as cages and trolleys but not the individual items.

Via: [RFid Blog]

Nygard using RFID technology in its Toronto store

In an effort to provide attractive services to its customers, Nygard International, a Canadian retailer is piloting an RFID-enabled system 'SmartTable' in its Toronto store. The RFID supported system shows information on a video screen. The digital signage maker GFX Dynamics has provided the SmartTable that facilitates the store to provide details of about a product (especially clothing items), its size, price and design. In addition to it, the system suggests accessories or other clothing items to accompany it. At present, Nygard is employing only one SmartTable and screen in a fashion department at the front of its store. 

Via: [RFid Journal]

Northern Foods redesigns its supply chain with RFID line

Northern Foods is remodeling its supply chain with RFID technology-the technology used to collect information for improving business standard.

Most of the customers of Northern Foods are deploying RFID technology. Marks & Spencer, which receives about 30 per cent of Northern Foods' sales, have adopted pallet-level tagging for some one hundred and fifteen-food suppliers in 2004.

Mark & Spencer claims that RFID has helped the company in controlling the supply chain. Now, the leading food producer Northern Foods with turn over of £1.4bn is planning to utilize information derived from RFID.

The executive director of the food producer Stefan Barden commented on the implementation of RFID technology, 'We are planning to reconfigure our supply chain. We are thinking about who manages the supply chain and the information in it'.

Via: [Computer Weekly]

Teradata's RFID Lab helpful for retailers

Teradata has founded a highly developed analytics lab to provide information which is very necessary for the retailers and consumer goods companies. Teradata, a branch of NCR Corp., uses RFID technology for the resulted-oriented services. The Retail Advanced Business Analytics and RFID Lab analyzes the data generated by RFID applications across the supply chain. The lab is located at the Teradata Benchmark Centre in Rancho Bernardo, Calif.

Bill Franks, Teradata Director of retail analytics commented,

The lab is dedicated exclusively to addressing the everyday business management issues faced by retailers. Our customers recognize that the ability to find connections between detailed-level data gives them a competitive advantage.

Via: [RFID BLog]

RedPrairie concludes three-day implementation of RFID solution

RedPrairie Cor. concluded a three day implementation of an automated RFID labeling system at Ocean Spray's Sulphur Springs , Texas facility. The major canned and bottled juices producer of North America, Ocean Spray used the RFID services of RedPrairie to meet retailer compliance requirements.

Ed Mahoney, the Project Manager of Ocean Spray stated,

We selected RedPrairie based on the organization's service offering and their strength in the consumer packaged goods market. We could have selected a standalone RFID vendor, but chose RedPrairie on what may be a long term strategy of integrating RFID with a best-of-breed warehouse management system. 

The Juice manufacturer is satisfied with the three day implementation. Now it plans to use RFID technology for effective promotional campaigns.

Via: [Ferret]

Studio summit stress on RFID technology

Acknowledging theft as a major deterrent to grocers everywhere, the studios and grocers who sat together with the Video Software Dealers Association's grocers council at the first studio summit have stressed on the latest technologies, especially the RFID tags to be used for the merchandise of DVDs. The summit organized at Video Software Dealer Association's Encino, California, headquarters was attended by the major studies and grocers of the world.

The summit concluded that the use of RFID technology could prevent thefts on the way to grocers carrying DVD. So that the black marketing of DVDs can be checked.

Via: [Video Business]

Cisco, T-Systems join hands to develop RFID for retail sector

Cisco and T-Systems are working on to develop RFID systems for the retail sector.

They plan to initially target German retailers for the implementation of their RFID technology, and then in other European markets.

T-Systems which provides IT services to the MNCs has approached various companies for assistance for the deployment of RFID systems. A good number of  noted retailers like Germany's Metro and Wal-Mart in the US explain that RFID is the way for the mangment of huge flow of goods in and out of stores more effectively.

Via: [PC Advisor]

Tesco drops plans to introduce item-level RFID tagging

Tesco has cancelled plans to introduce item-level RFID tagging after a pilot scheme. Instead, the British retail chain will focus on pallet-level tagging.

Tesco says that tagging high-value items such as DVDs and computer games makes no business sense unless its suppliers attached the tags beforehand.

The retailer chain says that it was unable to find an efficient way of tagging entertainment items in its warehouses, during the pilot program.

However, a couple of positives emerged from the pilot program. Tesco was able to change the replenishment schedule for DVDs and games in its 1,252 stores across the UK. Moreover, using item-level tagging, Tesco's staff could see in real-time how many high-value goods they had in-store. Finally, they found during the pilot that the staff restocked shelves about 1.5 hours later than it was optimal.

Via ComputerWeekly

The alternatives to RFID

RFID faces two blockages on its road to fast, ubiquitous implementation – price and complex preparatory work required.

While, these solutions are being sorted out, there are some options companies can look at to finetune their supply chain processes.

Option number 1: You can use VendorNet's services. It offers a Web-enabled application that automates communications from retailers and distributors to their suppliers. The VendorNet serviceis available on a license fee basis that changes depending on how many suppliers the merchant needs to get in touch with.

Option number 2: You can use GAINSystems' 'supply chain optimization' solution. GAINS' software uses proprietary statistical techniques to calculate the optimal level of inventory you need to hold at each distribution location, taking into account your lead times and costs and the desired service levels.

Via multichannelmerchant

M&S continues with its RFID trial

Marks and Spencer has extended the trial of item-level passive RFID tags, also called the Intelligent Label Project.

M&S conducted an item level RFID trial on men's suits in nine stores in 2004. From Spring 2006, the number of stores participating in the trial will extend from nine to 53.

The Intelligent Label Project involves a number of companies. It utilizes expertise from Paxar and Dewhirst. BT will provide managed IT development services and it is also assisting the implementation of RFID in M&S's food supply chain, working with Intellident Ltd, which is providing the scanner technology. EM Microelectronic, Switzerland, supplies the microchips.

Read More

Kroger works with OATSystems on RFID trial

The Kroger Co. has teamed up with OATSystems to conduct a field trial using RFID for tracking case-ready meat products. The Kroger Co. operates more than 2,500 supermarkets in the United States. rfidjournal.com reports:

"AMR Research has found that for most grocers, fresh items makes up 50 percent of profits, but 60 percent of shrinkage [items lost to spoilage or theft]," says Osofsky.

Read More: Kroger Turning to RFID to Stay Fresh

Rewe deploys RFID

After Wal-Mart, Target, Metro and other retailers, it is now the turn of German retailer Rewe to test RFID. It will be doing so at its Norderstedt distribution center. The first phase of testing will involve pallet-level tagging by 30 suppliers. foodproductiondaily.com reports:

The tags will be supplied by UPM Rafsec. The relatively high cost of RFID tags has been a barrier to the wider take up of the technology in the food and retail industries.

Read More: German retailer Rewe pushes suppliers toward RFID

Walgreen uses RFID

Walgreen, which operates a chain of drugstores in America, will be implementing an RFID-based tracking solution from Goliath Solutions. Fifty Walgreen stores took part in a year-long pilot that has only just been concluded. The company intends to use the solution to track the effectiveness of in-house product displays. rfidjournal.com reports:

"Our customers [retailers and CPG firms] are interested in the execution of in-store promotions, but also in their effectiveness," says Robert Michelson, CEO of Goliath, based in Deerfield, Ill.

Read More: Walgreen to Use Tagged Displays

Process improvement at the store

According to the Efficient Consumer Response (ECR), improving the efficiency of the processes just before the product reaches the shelf needs to be tackled by motivating the staff, improved inventory management, working on the package design, etc. ccmsectorinvest.com reports:

The study involved observations of the shelf-replenishment process in four major supermarkets and interviews with store managers, identifying several areas for improvement.

Read More: RFID could save UK retailers billions

RFID for enhanced shopping experience

Retailers in America are turning toward RFID to extend improved customer service during the Thanksgiving shopping period. RFID tags are being used to ascertain the availability of in-demand items. crmbuyer.com reports:

According to the consultancy Deloitte & Touche's 20th Anniversary Holiday Mood Survey, retailers have returned to a focus on customer service "basics," such as ensuring in-stock merchandise, easy return policies and extra sales help and available cash registers.

Read More: Retailers Using RFID for Better Holiday Customer Service

A business case for RFID in retail

The report RFID and Retail: Little Return for Case and Pallet Tagging published by AMR Research states that RFID implementation for retailers, particularly FMCG retailers, at present does not appear very attractive from an ROI perspective. This is because enterprise-wide RFID does not promise an increase in revenue good enough to make a healthy contribution to the bottom line.

According to the research, a retailer with sales of $ 5 billion per annum, a margin of 3.25%, and 200 stores would require an investment of $ 39 million and 3 years for complete RFID implementation. The researchers feel that the money can be used in many other ways that can have a more direct impact on the bottom line, for example, improving work-flow management, improved pricing and promotion technology, etc.

The report also states that an ROI model cannot yield information that is fully accurate as there are several aspects of RFID that cannot be quantified easily. These include targeting high-value goods for tagging, reduced shrinkage, etc. The report favors approaching RFID implementation not in context of near term ROI but with an eye on long term strategic advantage. The information that RFID provides can ultimately lead to the development of the demand-driven supply network, (DDSN).

RFID at Tesco

Unlike Wal-Mart, Tesco has not mandated that its suppliers tag the pallets and cases. Tesco is promoting pilot studies of RFID tagging at the supplier’s end. By not insisting on RFID compliance from its suppliers, Tesco believes that it is managing the process of item-level tagging in a smoother manner and is also making it easy for its employees. Tyco ADT has been contracted by Tesco to provide it with 4,000 readers and 16,000 reader antennas for the year 2005. Tesco will also require around 20 million Gen 2 tags to implement RFID between its depots.

RFID in retail and CPG

Item level tagging on a global scale that encompasses retail, accounting, defense, and other sectors could cost $ 200 billion per year. However, the potential benefits could be up to $ 300 billion. Between the retail and the CPG industry, it is the retailers who stand to benefit more from implementing item-level RFID. This is because RFID will enable them to reduce operational costs by around 10% and increase sales by around 2% and they will have to pay only a quarter of the cost for implementing RFID in the supply chain. The CPG supply chain does not achieve savings commensurate with its inputs to the implementation of RFID in the supply chain. For CPG to achieve a return on their investment, it needs to implement pallet-level tagging at 5 cents a tag and item-level tagging at 1 cent a tag.

Item-level tagging has picked up momentum in areas such as tagging of books, gas cylinders, liquor barrels, laundry, and baggage at airports. Wal-Mart has instituted item-level tagging for type 2 drugs. Early adopters of RFID like International Paper and Trenstar are in a position to sell their expertise to others. Apart from retail chains, even IT companies like HP, Sun Microsystems, SAP, etc have realized the value of large-scale item- level tagging. At the other end of the spectrum are companies that are pursuing a “slap and ship” policy and consequently losing out on the benefits offered by RFID.

RFID and price reduction in retail

A reduction in costs is the main driver of RFID adoption in the retail sector. The cost reduction is going to be a result of automation, reduced shrinkage, better stock management, reduced time to market, etc. Item level tagging will help businesspersons to target these activities in a very direct manner. Immediate benefits of implementing item-level tagging in retail include managing stock-outs with items such as limited edition books, souvenirs, and fashion accessories, which are high-stockout items.

In the retail industry, stock-outs can account for as much as 4% of the total sales and up to 11% of the high selling items. A stock-out can lead not only to a one-time loss of sale; it can result in a lost customer who may switch over to a competitor. Tagged items are easier to locate; this helps the staff to deliver prompt service. An empty shelf resulting from a stockout can be filled with the next best item. In-store uses of RFID are based more on bettering the existing processes and improving their efficiency rather than revolutionizing the process, for example, monitoring traffic pattern and studying consumer behavior becomes easier with RFID.

According to Lee Scott, president and CEO of Wal-Mart, RFID will help to improve visibility in the supply chain, which will reduce inventory costs by $ 1 billion. According to analyst Erwin De Spielgelere, Wal-Mart could save up to $ 8.35 billion. The elimination of manual scanning at the pallet-level will result in labor savings worth $ 6.7 billion; reduction on out of stock will save $ 600 million; $ 575 million will be saved due to reducing shrinkage and better administration.

Consumer packaged goods (CPG) look upon RFID as a means to improve the visibility of goods in the supply chain and thereby improve inventory management. In contrast, retailers are keen to utilize RFID to reduce out-of-stock and shrinkage. According to the FDA, as much as 20% of the food items have to be discarded due to spoilage. Item-level tagging helps to locate the causes and the points in a supply chain where spoilage occurs. Almost all the benefits that result from RFID implementation get passed onto the consumer, this is because retailers try to reduce their margins wherever possible to try and stave off competition.

A fully implemented item-level tagging system can help in reducing the following costs in the CPG industry. Shrinkage due to theft, damage, etc and expiry of perishable items cause a global loss of $ 60 billion each. Stockouts lead to losses to the tune of $ 120 billion per year with a third of the stockout occurring at the retailer warehouse. Thus, by contributing to reducing costs and increasing sales in a very direct manner, item-level tagging has the potential to impact businesses in a major way.

ScanSource's RFID Edge Helps Solution Providers

RFID Edge, a programme developed by ScanSource, Inc., to help solution providers be more successful in selling, installing and supporting RFID solutions, has undergone some improvement.The programme now includes a weeklong RFID qualification course, an RFID Lab and Demo Center, a solutions engineering team, and a dedicated helpdesk amongst others. With the demand for RFID solutions rising rapidly, it is essential for solution providers to be increasingly efficient in providing after-sales and technical support. Courses akin to the RFID Edge programme provide companies with an edge over their competitors: a necessity in today's rat race. It is a rigorous struggle to make it to the top, and to maintain the position requires continual updating of skill sets. Frontline reports:

"We have designed the RFID Edge program to assist solution providers from the earliest stages of getting educated about RFID all the way through certification, installation and post-sale support," said Greg Dixon, chief technology officer, ScanSource Inc.

Read more: ScanSource RFID Edge Program Aids Integrators

RFID Hype Not Phasing Woolworths

Despite many experts' advice to not put off integrating RFID technology into business infrastructure, Woolworths has decided to do just that. Rather than make a move, the company has chosen to continue monitoring RFID. It instead has its eye on e-business projects that will enhance communications with its suppliers. The suppliers consider Woolworth's move a relief. Part of the company's new plan includes the implementation of EANnet. EANnet is an online catalogue that serves as a standardized source of data for all points of the supply chain. According to Australian IT:

The end result will give them an integrated collaborative planning, forecasting and replenishment process.

Read more: Woolies In No Hurry on RFID

RFID More Justifiable in Europe than US

European retailers such as Marks & Spencer and Tesco, to name a couple, are being more aggressive with RFID rollouts than their American counterparts. This has caused John Greaves, head of Chicago-based Deloitte Consulting's global RFID technology integration practice, to say, "RFID is more justifiable in Europe than in the United States." A survey conducted last month in Barcelona by Deloitte Touche Tohmatsu and Retail Systems Alert Group indicates that 70% of European retailers are pushing forward with RFID implementation in the next year and a half. This survey shows that most of these retailers believe that revenues will increase within the first five years following the rollout. A summary of their study "RFID: How Far, How Fast" says that European distributors spent between $2 million and $4 million on RFID last year. According to CRM Buyer:

Europe's intrusive regulatory state -- long bemoaned by free market conservatives in the U.S. -- is something of a competitive advantage for retailers on the continent, experts said. The trucking industry in Europe is more heavily regulated than it is in the U.S. Trucking companies use wireless technology to monitor the driving records of their drivers to determine if they have operated at the right speed, and have taken the required rest stops, throughout the day, based on the requirements of a statutory work week, said Greaves. ...

[Greaves says,] "The supply chain is much more rigid in Europe than it is in the U.S. RFID creates business disciplines that in many ways are already in place in Europe."

Read more: RFID Drives Food, Fashion Operations in Europe

Companies Look for New Ways to Implement RFID

Over 100 suppliers have begun to send RFID tagged freight to Wal-Mart, according to CIO Linda Dillman. RFID technology will provide immeasurable solutions to current problems if the data is able to be effectively used. Today, suppliers have devoted extensive time to making the technology work. Companies such as Kimberly Clark plan to explore ways to implement RFID into their own production lines. Mike O'Shea, director of corporate Auto-ID/RFID strategies and technology at Kimberly-Clark Corporation, remarked that proof of delivery was a very appealing side to RFID. ComputerWorld reports:

Suppliers won't be the only ones plotting business process changes. Dillman said Wal-Mart has "just barely touched the tip of the iceberg" with RFID. Initial process changes include creating automated and prioritized pick lists for store employees to use when stock is low on shelves and products are available in the back room, plus exception reporting capabilities for when that isn't the case, she said.

Read more: Suppliers eye RFID data, search for potential uses

Marks & Spencer to Use RFID with Lingerie

UK retailer Marks & Spencer is expanding their RFID trial from nine to 53 stores in the next year and will also attempt to test RFID on products with a wide variety of sizes, such as bras. According to PC World:

BT Group will be the main contractor on the second phase of the trial, providing M&S with IT services like deployment assistance and maintenance of the RFID readers. BT is also assisting with the implementation of RFID in M&S' food supply chain. M&S has contracted with Intellident for the scanner technology, while the microchips are from EM Microelectronic-Marin.

Read more: Marks & Spencer expands RFID trial, includes lingerie

Piggly Wiggly Integrates RFID in Supply Chain

South Carolina and Georgia supermarket chain Piggly Wiggly is integrating RFID into its supply chain tracking. They will soon being using GXS Trading Grid to automate its warehouse receiving process. According to CRM Buyer:

The supermarket chain will leverage t