RFID Gazette

NIST Highlights RFID Security Risks

The NIST (National Institute of Standards and Technology) recently released a 150+ page PDF report that details some of the security risks of using RFID in a supply chain. Said Robert C. Cresanti, Under Secretary of Commerce for Technology:

RFID tags, commonly referred to as smart tags, have the ability to improve logistics, profoundly change cost structures for business, and improve the current levels of safety and authenticity of the international pharmaceutical supply chain and many other industries. This important report lays the foundation for addressing potential RFID security risks so that a thoughtful enterprise can launch a smart tag program with confidence.

The report also suggests ways to get around the security risks. Download from NIST issues guidelines for ensuring RFID security. [via Extreme RFID]

RFID Gazette - Mon Mar 26, 2007

What RFID Is Not
Spychips points to an AIM Global newsletter item that kills some so-called RFID truths. Keep in mind that AIM Global is an important  RFID international standards body with very well-placed industry people in its membership list. They list 6 RFID myths, amongst them: that RFID is secure and no threat to privacy.

Calling Occupants... Of Interplanetary Craft
[with apologies to Klaatu] RFID is an ideal technology for the supply chain, regardless of what kind of industry. Most of the time, location is not a barrier, either. As such, RFID could be useful for the interplanetary supply chain that NASA is setting up for the planned Moon base for 2020, and crewed missions to Mars. New Scientist Space has more details, though RFID is not mentioned in the article.

RFID Industry Mergers
PanGo networks and InnerWireless have announced a merger. The two companies had been working on an asset tracking project together for a joint customer, a hospital. [via RFID Update]

RFID Bottle Caps

NEC Corp and Toyo Seikan Kaisha, Ltd., both in Japan, have developed a plastic bottle cap with an embedded passive RFID chip. The cap could be used by soft drink manufacturers for the supply chain. It's design is said to be able to avoid any internal moisture, which would normally render the chip useless. [via RFID Weblog]

An alternative might be to use something like the edible RFID chip that Kodak recently debuted. There's also no reason the chip has to be on the inside of the bottle, where the moisture is. A second, hidden layer at the top of cap could hold one of the tiny powder RFID chips that Hitachi created.

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.

RFID Roundup - Tues Feb 27, 2007

Big In Japan
McDonald's restaraunts in Japan will allow customers, later this year, to pay for purchases using NFC-enabled mobile phones. (Nokia is one company that has already rolled out NFC phones to be used for payments.)

Hyundai Adopts RFID
Hyundai-Kia Motors is implementing RFID in their Supply Chain to collect real-time distribution information. They are moving from applied bar code labels. They'll be using UPM Raflatac tags.

Dallas Newspaper To Use RFID
The Dallas Morning News will be the first newsaper to use the RFID-enabled Smart Cart system from Cannon Equipment. The system helps to track cart shipments.

RFID Chips Go Edible

Hitachi recently came up with tiny "powder" RFID chips. Well tiny's fine, but what if you want to eat your chips? You're in luck. Kodak just filed a patent for edible RFID chips. They're designed for monitoring a patient's gastric tract and are covered in a harmless gelatin, which eventually dissolves.

What's more important than that they can be ingested is that these prove that RFID chips embedded deep in the body can be read by a scanner. But Kodak is also saying that pills could be manufactured with these chips inside them, so that doctors or nurses can confirm a patient took them.

While this might seem a bit scary, they might possibly be used for early-stage Alzheimer patients that are still living by themselves. Because of their use, however, these chips would (hopefully) not be used for food supply chain management. My question, though, is what is Kodak, a maker of photography products, doing coming up with such a chip?

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.

Avery Dennison And RFID In China

Avery Dennison, who have put around US$175M into all Chinese operations since 1995, recently announced RFID technology transfer initiatives in that country, with total expenditures to total over $275M by 2010. Previous efforts include setting up the Avery Dennison Self Adhesive Label Converting College in Kunshan, China, in 2000. Imagine that school name on college jackets.

Avery Dennison created their RFID division in 2004, adding RFID systems, Gen2 inlays and wireless compact flash cards amongst their offerings. They later implemented a Qualified Converter program to certify partner companies. With their their Chinese RFID initiative, they are hoping to capture some of the 5.0+ Bln Yuan expected to be spent in China on RFID by 2009.

additional sources: China RFID News.

RFID Training Centers Across Canada

Is this a great idea or what? Faced with the future shortage of skilled workers in the RFID industry, Academia and a group of skilled professionals are offering certification courses at newly-opened training centers in the larger cities in Canada. This includes Montreal, Toronto, Calgary, Ottawa, Vancouver, Quebec City and a few others. Basically, if there's a professional sports team (hockey, basketball, baseball), there's a training center in that city.

Head office in Montreal has both a classroom and a state-of-the art lab. The courses are part of the CompTIA program, which includes certification. And it's not just technical courses but also RFID Project Management. Some RFID vendors are offering courses to their clients as a result of the program. This is a brilliant idea that I hope catches on elsewhere, especially in the USA, where the shortage of skilled workers could affect the supply chain.

[sources: RFID News]

Supply Chain Advances Are Maintaining Productivity

US Fed Chairman Ben Bernanke delivered one of his fearsome talks today at the Italian-American club. If what he's saying bears out, the labour force is not growing at the rate it used to, especially amongst the female population. He did say, though, that improvements in SCM (Supply Chain Management) are helping maintain/increasing productivity for the time being.

I'm reading between the lines here and guessing that he's referring to radio frequency technology. Even if that's correct, there will still be a shortage of skilled workers that have an understanding of RFID - even more so if the workforce size is not growing. Fortunately, the number of organizations offering RFID training is growing.

RFID Roundup - Thur Nov 23/06

RFID In The Beef Industry
A Canadian beef producer is using RFID to track product through their processing plant. The intent is to be able to any part of any butchered animal, should the Canadian Food Inspection Agency wish it. The system they are using, which has both supply chain and cold chain management features, was designed and installed by Merit-Trax Technologies and Psion Teklogix. [via RFID Journal]

MicroTRAKgps JaguarWatch
The classic Jaguar automobile is one of those commands a high-price, whether sold legitimately or on the "street". To prevent the latter, MicroTRAKgps has introduced its JaguarWatch Auto Theft Recovery System. MicroTRAKgps is a division of The Tracking Corporation, who make GPS and RFID
products. MicroTRAKgps was awarded a patent for their hybrid technology. Jaguar cargo containers are also tracked with hybrid RFID and GPS tech from Savi Networks.

RFID Is Red Hot: Top 10 Countries
IDTechEx has reported their findings about the top 10 hot countries for RFID. Number 1 is the US, in terms of adoption of the technology, followed by the UK, Japan, German, China. Canada is the last of the top 10.

Does Wal-Mart Have Scale Advantages For RFID?

Imagine you are in a group of tired, chained beasts pulling a wagon and being whipped if you stop. That's what I imagine some suppliers to Wal-Mart, the US DoD (Dept of Defense), and other influential organizations may feel regarding RFID mandates. The latter organizations are seeing (or claiming) a high ROI (return on investment) on RFID implementation, the suppliers they have mandated to join the RFID club have not seen similar returns.

It's easy to say suppliers see no incentive for implementing the technology, but no doubt some of them feel that they might as well go out of business if they don't accomodate retail giants such as Wal-Mart. Wal-Mart has also indicated that, aside from helping prepare their suppliers to be compliant, companies have to find their own ROI in RFID. Which I think might be part of the problem of adoption.

As I haven't seen the balance sheets for any of these companies, I'm hypothesizing. Wal-Mart may have an "economies of scale" advantage over their suppliers in terms of cost of radio frequency technology. Though I'll admit I'm not sure whether Wal-Mart sources RFID technology for their suppliers, but I doubt it. That would mean, then, that suppliers pay higher prices for the same technology and likely cannot have the same type of ROI.

Even if Wal-Mart had a "Sam's Club" for RF tech for their suppliers, the latter are still at a disadvantage because implementing radio frequency technology cuts into heavily into the bottom line of smallest suppliers, who are already supply on slim margins for the bargain atmosphere of Wal-Mart. Where's the ROI in this scenario? Such a cost means bottlenecks in implementation.

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 Reduces Data Inaccuracies To Zero

In the late 80s I worked at a company that published stock market data through a special electronic channel. Consider that this was long before the Internet was public, but there were networks that could be utilized. The data was typed in each weekday morning by a small army of data entry clerks reading directly from a small collection of business sections of print newspapers. Obviously, data entry errors were numerous. It was part of the business. Now there's probably nothing RFID can do for such an operation, but it can reduce human data collection errors in supply chain processes.

In fact, data collection errors become nearly nil, provided RFID tag read rates are favorable. And in the supply chain, no errors means greater efficiency in the entire operation. Inventory information gets updated instantly in the supply database, with no need for manual data entry, and thus resulting in no errors (with the exception of possible, infrequent reader problems). Knowing what is in your inventory at the click of a computer mouse also means there is no need for holding surplus stock of items "just in case". You know how much you have and how much you need to restock. Thus, incoming orders can be handled more quickly.

These supply chain benefits apply both to in-house stock and items being shipped outside the company. Overall, production planning is improved, and sales forecasts end up being more reliable. Ferret has more details on an actual case study.

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.

Singapore Gets RFID Supply Chain Management Solution

A partnering between Republic Polytechnic, NEC Solutions, and Aussino Home Fashions resulted in a SCM (supply chain management) solution based on EPCGlobal's EPC (electronic product code) - which was accepted as an ISO standard recently. This solution is a first for SCM for the region, and a test facility will be established in the Polytechnic's School of Engineering to study improvements to inventory contorol processes. The RFID market in Singapore is tiny in comparison to other markets, but is expected to grow from US$8M in 2004 to $15.8M in 2009. [via Channel News Asia]

Singapore started investing in RFID since early 2004, with the intent to create supply chain clusters by 2006. Their Singapore Polytechnic introduced RFID tech to the school workshop earlier this year.

Volkswagen + Jaguar Using RFID

Apparently Volkswagen doesn't seem to have the financial problems that some American auto makers are having. In fact, Volkswagen is doing so well that they have a theme park which has up to 700 visitors daily. But instead of going on rides, visitors come for their ride, to pick up their car. They do this to save on the delivery charge for their vehicle. This quantity of visitors at the theme park (supposedly the second-most popular in Germany) has to organize the visits so that people get their cars in good time. So they use RFID to manage the process. RFID Weblog summarizes the process.

Jaguar cars are also tracked with RFID in a different manner. Unipart and Savi Networks will jointly be monitoring Jaguar car parts in cargo containers using Savi's information service. The service uses a combination of "bar codes, sensors, passive and active RFID, and GPS." [via Auto Industry UK] Savi, which was acquired by Lockheed Martin, has a hardy container tag which might be suitable for this task. Several other companies are using Savi's tech to monitor cargo.

  By the way, here are 5 other uses of RFID in automotive and related sectors.

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.

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.