April/May 2003

As radio-frequency identification moves into the logistics mainstream, intriguing opportunities are emerging for integrating the technology with product visibility and tracking systems. Sharon Clancy reports

Much has been written about how RFID (radio frequency identification) will transform supply chains. The trouble is, for a long time it has been all blue-sky talk; there has been very little action. Even now, despite the work of a few brave pioneers, we have only just reached the point where companies have begun large-scale trial projects to investigate the asset-tracking capabilities implicit in RFID.

Much of the original impetus came from retailers, who recognised potential benefits in reduced inventories, better traceability of assets and faster stock turnround. To some extent they saw RFID primarily as a kind of super-intelligent barcode system.

But could RFID have a bigger role to play in the extended supply chain, blurring the distinction between routine tracking of products and what might be called mobile logistics?

Certainly there are already projects in which an RFID system can scan a vehicle's payload automatically and enable it to enter or leave a warehouse with no manual intervention. It is feasible that tags could also capture the distance travelled between each point and the timing of arrivals and departures - effectively providing some of the functions of an automatic vehicle tracking system.

What is it?

So what is RFID exactly? In simple terms, RFID uses radio frequency (RF) waves to transfer data between a tag or smart label (the transmitter) and a reader or scanner (the receiver).

The tag or label has a tiny antenna and microchip integrated in it. The tags are either passive or active (with an internal power source). Both types can be read-only or read-write. Passive RFID tags have a limited range of around 50cm, while active tags can transmit much further. In some cases a figure of 85cm is quoted, but high-frequency readers can boost this distance. Unfortunately, though, there is no international standard for the equipment yet.

The cost of the tag also varies widely from 30p to several pounds, and depends on factors such as how much information it can store, its robustness and the number of times it can be rewritten to. Tags can store a vast range of data, including product serial number, date of manufacture, expiry date and so on. The data can be updated along the chain.

The reader automatically captures data transmitted from the tag when it is within range. Readers can be set up anywhere because the tags do not need to be in line of sight to transmit. RF readers can be low-frequency, high-frequency and UHF, and can support a very broad range of protocols. There is also a choice of low-power readers, and high-power readers for intensive operations.

Conventional barcode scanners cannot read RFID tags. However, handheld terminal suppliers such as Datalogic and LXE are developing multi-capability scanners which can read a barcode at the despatch point and transfer it to a tag. Datascan Systems distributes Datalogic's RFID products in the UK. Also in the pipeline are scanners with swappable heads that can work with either type of system.

The benefits

The chief benefits gained from RFID so far are in inventory and warehouse management systems, but some other sectors and operational areas are also being investigated.

Potential benefits include improved inventory accuracy; increased order fill rate; better security and reduced shrinkage; improved inventory turns; expedited cross-docking; and warehouse labour reduction.

Supply-chain software specialist Manhattan Associates, for example, is collaborating with Intellident to deliver RFID technology to its PkMS warehouse management system. Manhattan says an operative would take about 30 seconds to scan all the cases on a dolly-mounted pallet carrying 25 cases using traditional barcode scanning. With RFID tags and a reader, it may take five seconds for the dolly and its load to pass through the reader's field, representing an 83 per cent productivity improvement.

Some supply-chain experts query whether this speed increase is of practical use in any but the most intensive of warehouse operations. As with the tags themselves, it is likely to be a case of horses for courses.

Mobile tracking

It's when you extend the use of RFID to asset-tracking and item tracking that the implications for mobile computing start to become clearer.

RFID in itself can't track the position of a vehicle or asset from minute to minute, but does it need to? If RFID tells you the tote or pallet was loaded on a vehicle at a given time and was unloaded at the destination two hours later, do you actually need to know where it was in the intervening period? The tracking systems offered by many logistics companies already tell customers in real time where the vehicle is that is carrying their load. Middleware should be able to match up the two tracking systems.

On the other hand, if you have RFID tags on the load, why not on the vehicle and trailer? Well, there are limitations, especially if you are aiming to achieve visibility along the supply chain. Chief among these is the fact that tags can only be read by appropriate readers at pre-determined points. There are mobile RFID readers (Savi offers one) that receive signals in transit, but these have to be linked into a GSM or GPS positioning system to forward that data on.

Many fleets already use radio-frequency systems to download data from trucks at depots via a wireless local-area network, and make use of this data to provide a basic form of asset tracking. Vehicles have RF transmitters fitted and, each time one enters a depot, the wireless LAN automatically downloads vehicle information from transmitters on the truck or trailer and records time of arrival and time of departure. The readers are positioned at strategic points around the depot. Unlike GPS, this doesn't allow you to pinpoint the vehicle's position beyond the bounds of the depot, but at least you have a record of its last known whereabouts.

Eventually such systems could migrate to RFID, assuming the frequencies match. A robust tag could contain more information than is accessible to the transmitters currently fitted, and depots equipped with load scanners or readers could also read a tag on the vehicle.

As RFID technology becomes more familiar, interest is likely to grow in tracking of other mobile equipment within a DC. RFID tags might, for example, be put on the fork-lift trucks doing the unloading.

The Crypta Tag from Encrypta (now part of Unisto, the electronic seal manufacturer) offers a classic example of how tracking via RFID can work in practice. The system was originally developed to speed vehicle movements into and out of large depots, but can also offer a basic form of automatic vehicle location.

The Crypta Data Tag, an add-on to the company's trailer security seal range, is basically an RFID tag which alerts a local reader when the trailer is in close proximity. This triggers a radio communication with a local computer system, and identifies the trailer and its load.

Encrypta says that in a big depot, vehicles can queue for up to half an hour simply to go through normal gatehouse checks before they leave; so the savings here alone can be substantial. But if you apply a similar system to a remote depot, perhaps an unattended one, and link it with a fixed or wireless wide-area network for reporting vehicle movements back to base, you also introduce an access control system and a means of tracking arrivals and departure remotely.

Food logistics

The temperature-controlled logistics sector already has fairly sophisticated load tracking systems in place, but now RFID is enhancing them further. RFID tags are a particular boon for food retailers, who have to contend with short shelf lives and specific storage requirements. Food safety legislation requires manufacturers, transport companies and retailers to take measures to prevent food becoming unsafe and prove they have exercised "due diligence" in their part of the food supply chain.

To comply, logistics companies currently measure air temperature inside the load compartment and record it, usually digitally. However, there is a risk of "hot spots", so many retailers also probe the product temperature before they agree to accept the load. The temperature log can be downloaded over the Internet or by RF when vehicles return to base. RFID tags incorporated in the load will give greater product temperature accuracy.

Omron is already involved in an RFID food tracking project with Sainsbury's supermarkets in the UK, using Philips Semiconductors' I·CODE technology. Intellident, another RFID specialist, has mounted a successful RFID trial with Marks & Spencer in its food operations, and is now extending this into general merchandising, working with handheld terminal manufacturer LXE.

Express parcels

Philips Semiconductor has identified express parcels as another sector where RFID tags or labels could bring operational efficiencies. A hub-and-spoke parcels network is already likely to be a fairly slick operation, with parcels arriving and leaving the hub in minimum time. But every parcel is currently scanned separately - up to three times in a typical hub.

With RFID reader gates placed at strategic points in the sorting process, the position of every individual piece can be monitored. It's even possible to double-check routing during the outbound process, with automatic warnings if a parcel passes a gate for the wrong destination.

Philips says trials have delivered read accuracies of almost 100 per cent, compared with around 92 per cent using conventional technologies - significantly reducing the number of mis-routed parcels. Another advantage, says Philips, lies in the greater robustness of the smart labels, which can still be read even when covered or repaired.

There could be service gains too. Vehicles could depart from local depots later and arrive at the hub in time for goods to be loaded on to trunk vehicles leaving to meet pre-9am delivery slots.

Chipping of goods

High-value goods represent another strong contender for RFID treatment. Reducing theft is one reason why the UK Government is pumping £5.5 million into its Chipping of Goods Initiative. It hopes that if goods are more traceable, thieves will be deterred.

Under this scheme, retailer Woolworth, for example, is trialling a system aimed at reducing loss of inventory through real-time tracking of packaging containers, dollies, roll cages and totes throughout the supply chain. The trial, set up in conjunction with Microlise and RFID specialist Savi Technology, tracks the containers and their contents dollies as they travel between Woolworths' Swindon distribution centre and stores.

In addition to fixed Savi Echopoint readers and Signpost systems, there are mobile readers on the vehicles, so the project provides visibility right down the supply chain. Microlise says the mobile units work like a mobile warehouse management system.

Several other companies already have logistics projects under way in the Chipping of Goods scheme, including Unilever, which is leading a consortium involving Tibbett & Britten, Wincanton Logistics and Safeway. Intellident is the RFID specialist here. Another trial features Allied Domecq Spirits and Wines, which is working with De La Rue Brand Protection, Chep International and APT Smart Solutions.

Unilever is tagging six-packs of Lynx deodorant from a factory in Leeds through to the shelves of three Safeway stores at Milton Keynes, Dewsbury and Northampton. The chipped product is monitored at every stage in the supply chain - including Tibbett & Britten's Unilever national distribution centre at Whitwood, near Pontefract in Yorkshire, and also Wincanton's Safeway distribution centre at Northampton.

Pooled assets

Another area where RFID is taking off is in shared asset networks for managing pallets and packaging materials. Kaysersberg Plastics, part of DS Smith Plastics, is now offering its Duro-Pallet with an RFID option. The tag is embedded in the structure of the pallet, and can be read by handheld readers or fixed devices from a distance of up to 90cm.

Schreiner LogiData and Craemer, a leading pallet manufacturer, have also collaborated to create the smart standard-size 1200mm by 800mm pallet. Each pallet is fitted with a Philips I-CODE IC that can be programmed with the pallet's contents and transport history.

Trenstar is using Samsys RFID tags to track kegs in a keg-pool operation involving several European breweries.

The Ident tracking system for pooled assets works on similar lines to RFID, but uses a different technology. Developed by the David S Smith packaging group with Cambridge-based Flying Null, Ident uses tags which are welded ultrasonically to packaging materials. They are made from cobalt, and use magnetic technology to transmit a unique identification number to a fixed or handheld reader.

Trailer tracking

RFID tags could also prove a solution to the problem of powering trailer tracking systems when trailers are unhitched from the tractor unit.

Colter Distribution's R-IDENT includes self-contained tags with a typical battery life of eight years. The robust tags are weatherproof and resistant to mechanical shock and vibration, and can also monitor up to two inputs such as door openings and report on current status. The signal is effective up to 250 metres. They can be used in conjunction with a GSM/GPS system.

Future

So what of the future? Anton Du Preez, managing director of mobile data specialist Rangegate, believes that although the price of RFID tags will come down, they will always be more expensive than barcodes. He says operators need to be certain what level of detail they need when tracking goods.

"The need to make a firm decision on either technology is still some way off. Both barcoding and RFID applications are likely to co-exist for the foreseeable future, simply because of the functionality-versus-price arguments.

"The key is to ensure that your mobile data solution is able to process and manage any kind of data, whether captured by a barcode or RFID reader, and integrate it into your back-end systems. This ensures your decision on deploying RFID equipment will mean only incremental costs, and will be based purely on the functionality and benefits you can gain."