For more than a quarter of a century, manufacturers have been able to keep track of products in a warehouse by using bar codes, a series of black and white lines that can be used with a scanner to identify an object.
But technology with roots that date to World War II radar is now empowering companies to improve efficiency and revolutionize the way they warehouse, inventory and distribute products.
The method is called Radio Frequency Identification, or RFID, which replaces a one-dimensional bar code with an electronic tag that picks up new information during its travels along the supply chain, and plays it back on demand.
An RFID tag, also known as a smart label, contains a small antenna and a microchip. As the smart label passes by a reader, or transponder, radio waves from the antenna are picked up and information from the microchip is transferred into a central computer system.
The microchip allows the smart label to store a wealth of information about a product as well as monitor its movement throughout a warehouse or supply chain. In addition, as the product moves throughout the supply chain the information can be continually updated.
“One of the clear benefits of RFID technology is that you can update data to an RFID tag. It’s like a traveling database,” said Matt Ream, senior product manager of RFID systems at Vernon Hills-based Zebra Technologies.
Zebra Technologies, well-known for its bar code manufacturing equipment, recently joined with New York-based Symbol Technologies Corp. and Dallas-based Texas Instruments Inc. to develop a line of RFID products and equipment for major companies to incorporate into their warehouse and distribution processes.
“The technology is stable and reliable, and those that have tested it used it with great benefit,” said Chris Hook, a corporate business developer in RFID technology at Symbol Technologies.
The partnership includes Zebra’s development of a smart label printer and Symbol’s integration of smart label technology into portable terminals and scanners.
Texas Instruments will supply the high-powered readers and antenna systems for transponders to read the smart labels through the tiny antenna attached to the label.
Health-care providers and airlines are just a few of the industries that are testing the technology and working on incorporating it into their warehousing and database processes.
“Sometimes clients request RFID technology because of its reduction in asset-tracking costs and improved accuracy in getting information into their databases,” said Donald Frieden, president of Systems Automation Technology Corp., a Houston-based computer solutions firm.
Many companies are considering the success or failure of pilot programs in aviation baggage handling with RFID technology to be an indicator of its potential. (For competitive reasons many airlines are reluctant to talk specifically about their testing of RFID.)
“The Holy Grail is baggage handling, because if there is a significant positive response, it could have a domino effect in terms of other companies adopting the technology,” said David Krebs, a project manager at Venture Development Corp., a research firm in Natick, Mass.
Using RFID in baggage handling, a smart label would hold a large amount of information, including the passenger’s name, itinerary, address and final destination. As the bag moves throughout the baggage handling system at the airport, the information on the RFID tag can be picked up by readers or transponders placed throughout the system.
So in theory, if you fly into an airport and your bag is not on the baggage carousel, a customer service representative should be able to locate your bag by the information obtained through the smart label.
En-Vision America of Normal, Ill., recently announced that it will be incorporating smart label technology into the pharmaceutical field to help identify prescription information for people who have trouble reading the labels.
A smart label containing detailed prescription information will be converted into speech when the bottle with a smart label is moved within an inch of a talking reader.
“It’s the perfect marriage for portability of data,” said David Raistrick, the company’s vice president. “It can store all the information on the label and it can be read from anywhere. It’s not like a bar code where you have to worry about optics; the technology allows you not to worry about that,” he said. The label could contain information such as the name of the patient, the name of the drug, the dosage, instructions, warnings, the prescription number and the doctor’s name.
This application of the technology is being tested in a pilot program at Hines Veterans Hospital near west suburban Maywood. The program supplies 12 patients with readers and the hospital pharmacy with a smart label printer.
Raistrick said the investment in the pilot program averages near a half-million dollars, but he said the investment is worth it from the feedback he has received so far.
“We are already talking to chain drugstores in the U.S. and Canada about using this technology,” Raistrick said.
The RFID business is running at $800 million a year and growing 24 percent annually, according to 1999 report by Venture Development Corp.
But despite relatively successful testing of the smart label technology, there have still been no large-scale commitments by a company to the product.
“We’ve seen improvements over the past few years in terms of development of standards and reduction of costs, but there is still a large knowledge gap of what RFID technology can do,” Krebs said.
Many companies have cited the lack of global standards as a major barrier to the technology taking off.
“They’re all waiting for the killer app,” Hook said, referring to an application that will prove the potential of RFID technology.
“Companies might be afraid to get locked in proprietary software,” Krebs said.
In addition, while Radio Frequency Identification technology can increase performance and efficiency, the price to get started is not cheap.
“Depending on the facility, the infrastructure can cost anywhere from $30,000 to $50,000 plus the costs of the tags,” Frieden said.
Frieden said tags can range from about 25 cents to $6 each.
