RFID: From revolutionary to reality in 200617 January 2006
The retail and information technology industries have been buzzing about radio frequency identification (RFID) technology for some time now, but it uses are yet to filter down to small businesses.
Analysts are predicting that this is all likely to change, as we begin to see more of the chip technology in our stores and as part of our services. Gartner predicts that the global RFID market could be worth close to £2 billion by 2010 - it is already worth around £245 million.
A number of large corporations have already invested considerably in more advanced versions of the tagging system, including consumer good firm Kimberly-Clark and pharmaceutical company Pfizer, which is adopting it to tackle the counterfeiting of valuable products such as Viagra.
So what is it?
RFID technology allows the automatic identification of products through the use of transponders within tags that are attached to products. The tag contains silicon chips and antennae through which it can respond to the signal from a transceiver, enabling the user to view the information normally held in a bar code, and more.
The new technology has caused such a level of excitement because of its potential to improve efficiency in almost all areas of business. As the barcode revolutionised the shopping experience for both vendors and consumers with its speedy scan of product information, so RFID is set to go one step further.
The technology has the potential to allow entire crates of product units to be scanned by a reader situated nearby, as opposed to being placed individually in front of a scan sensor. It is also beneficial to supply chain processes such as stock control and inventories. In addition, the tags could be used to "track" products - not just out of the store if stolen, but they could even register when an unusual number of products are taken off the shelf. Among its many other applications, RFID is set to improve in areas such as fleet management, access control and smartcard payment options.
What does it mean for small businesses?
Although RFID tags are widely used in a number of retail environments to monitor stock, employing entire systems is still fairly expensive and this has hindered uptake among small businesses. There are three types of tag, the most common of which is the passive tag, which does not contain its own battery and responds to a signal sent to it rather than transmitting one. As such, these tags have a shorter range. Active tags contain their own power source and have a wider range but require a greater investment in more sophisticated readers.
In addition, public perception has held RFID technology back over the last year, as its potential tracking capabilities raise concern that products may eventually be tracked out of store. Despite this, the possibilities for improved supply chain efficiency means that the technology will benefit small businesses greatly. Some large corporations, including WalMart, are already requiring RFID tags on products from certain suppliers, so the small business looking to get ahead in an area that is likely to become essential in the near future would do well to investigate the technology now. For more information on RFID technology, visit the Independant European Centre for RFID website.
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Comments:
Colin Carter writes:
"One thing that is missed from this article is the use that is already being made of this technology in libraries. The use of RFID enables both university and public libraries to provide longer opening hours and improved access without the need for additional staffing costs. There are a number of high profile sites in the UK, including the central public library in Norwich and the Boots Library at Nottingham Trent University. In both cases RFID is being used to provide a high quality service in terms of users being able to do more for themselves, freeing up staff time to concentrate on providing more assistance to those users that need it."
