Chipless RFID

A chipless RFID tag (also known as RF fibers) is one that does not make use of any integrated circuit technology (silicon chips) to store information. The tag uses fibers or materials that reflect a portion of the reader's signal back; the unique return signal can be used as an identifier. The next ten years will see a rapid gain in market share of mainstream printed and chipless RFID tags. The biggest opportunity it provides is that we can tag each items because of the availability at low costs.

Advantages:

•         It can be used at higher temperature variations and are less sensitive to the RF Interference.
•         It can be printed directly on the packaging products for the cost around 45 paise.
•         It shows enhanced physical performance
•          It is capable of handling information up to 256 bits and can be maneuvered upto the distance of ten meters
•          As compared to the silicon chips the RFID's show enhanced physical performance too
•          It can capture data fast (approx 2 microseconds per bit) at 6 inches
•     It can read through materials such as paper, cardboard, plastics etc

Timeline of RFID implementation in WalMart

Given here is a time line of implementation of RFID by WalMart in their stores.

YEAR	REMARKS
JUNE 2003	Wal-Mart’s then CIO Linda Dillman announces the start of the retailer’s EPC compliance program at a meeting of the VICS organization, saying Wal-Mart would ask its top 100 suppliers to begin tagging pallets and cases starting in January 2005.
AUGUST 2003	Wal-Mart says it will require all of its suppliers to put RFID tags carrying Electronic Product Codes on pallets and cases by the end of 2006. "We have asked our 100 top suppliers to have product on pallets employing RFID chips and in cases with RFID chips. By 2006, we will roll it out with all suppliers," Wal-Mart spokesman Tom Williams says.
NOVEMBER 2003	Wal-Mart brings the “top 100 suppliers” into Bentonville to learn more details of its RFID program, qualifying its previous announcement by saying the initial requirement will be for the first 100 to tag pallets and cases being shipped to three Texas DCs in January 2005.
APRIL  2004	Wal-Mart begins its RFID trial by receiving cases and pallets of product with EPC tags at a single distribution center in Sanger, TX as part of a test being conducted with eight suppliers. The tagged goods are to track goods to the back of seven Wal-Mart stores in Texas served by the DC. The first eight suppliers, which each tagged just a small number of SKUs, were Gillette, Hewlett-Packard, Johnson & Johnson, Kimberly-Clark, Kraft Foods, Nestlé Purina PetCare, Procter & Gamble, and Unilever.
JUNE 2004	Wal-Mart meets with its top 100 and "next 200" suppliers in Bentonville to lay out its RFID tagging requirements and timeline. Suppliers are told that by June 2005, RFID systems will be operating in up to six of its distribution centers and 250 stores. Wal-Mart further says that it expects to be using EPC technology in up to 13 distribution centers and 600 Wal-Mart and Sam's Club stores by the end of 2005. Deadline for the “next 200 suppliers” to start tagging cases and pallets is set for January 2006, though what shipments to what DCs is not clear.
OCTOBER 2004	Wal-Mart says it plans to start shipping RFID-tagged cases and pallets to a Sam's Club store in Plano, Texas very soon, starting the division’s RFID program.
JANUARY 2005	Many, but not all, of the “top 100” start shipping some tagged products to three Wal-Mart DCs in Texas.
MARCH 2005	CIO Linda Dillman says Wal-Mart is on track to support RFID capability in 600 stores and 12 distribution centers by the end of the year.
OCTOBER 2005	Wal-Mart says that by the end of this month, it will have installed radio frequency identification systems in more than 500 stores and five distribution centers.
OCTOBER 2005	Wal-Mart says it expects the next wave of 300 suppliers (making 600 total) to start shipping tagged cases and pallets by January 2007.
OCTOBER 2005	A Wal-Mart sponsored report from the University of Arkansas’ Information Technology Research Institute, a part of the Sam Walton College of Business, releases a report based on its preliminary study of the impact of RFID on reducing retail out-of-stocks (OOS). The researchers conclude that RFID reduced OOS at store level by 16% over non-RFID based stores.
JANUARY 2006	Wal-Mart says it is piloting a program with a few suppliers and EPCGlobal to generate advance ship notices for supplier shipments based on RFID reads
JANUARY 2006	Supposed deadline for the “next 200 suppliers” to begin sending some tagged product to some DCs, though relatively few do in any meaningful way.
MARCH 2006	Wal-Mart says it is working on two “proof of concept” pilots for using sensors along with RFID tags to track produce and environmental temperatures as the products move along the supply chain.
APRIL 2006	Wal-Mart says it will phase out the use of Gen 1 tags by in favor of Gen 2 by mid-year, saying it will no longer accept the use of Gen 1 tags on the cases and pallets it receives from its suppliers after June 30.
APRIL 2006	Linda Dillman leaves as CIO to take an executive role in Human Resources. Rollin Ford, previously head of supply chain and logistics, becomes CIO. Ford subsequently takes a much lower profile approach to RFID.
SEPTEMBER, 2006	Wal-Mart announces that by January 31, 2007, another 500 of Wal-Mart's 3,900 stores will have RFID readers installed. If it happened, that would bring the total of RFID-enabled Wal-Mart stores up to 1,000
FEBRUARY 2007	The Wall Street Journal runs an article entitled "Wal-Mart's Radio-Tracked Inventory Hits Static." The article says, "Wal-Mart Stores Inc.'s next leap forward in ultra-efficient distribution is showing signs of fizzling," given a lack of internal progress in rolling out the technology and a lack of value for suppliers Rollin Ford writes rebuttal letter to the WSJ, and Wal-Mart finds the CIO of Campbell’s Soup and the chairman of Smucker’s to support RFID value prop. Meanwhile, CIO of Sara Lee says at the same time that RFID isn’t making sense at the current level of cost and performance
OCTOBER 2007	Wal-Mart announces a major change in its RFID strategy, largely abandoning the initial pallet/case focus on shipments going to Wal-Mart stores in favor of three focus areas: (1) shipments going to Sam’s Club; (2) promotional displays and products going to Wal-Mart stores; (3) tests to see RFID’s impact in improving category management in select areas. "We're coming at RFID from a different angle," Wal-Mart's VP of Information Technology,Carolyn Walton, says at the EPC Global conference
JANUARY 2008	: Wal-Mart announces its first real compliances “penalties” for failure to tag products, specifically for shipments to its Sam’s Club chain. Wal-Mart says in letter to suppliers that a failure to tag pallets sent to its distribution center in DeSoto, Texas, or directly to one of its stores served by that DC after January 31 will be charged a service fee, starting at $2 per untagged pallet on Feb. 1, and capping at $3 per pallet on Jan. 1, 2009.
JANUARY 2009	: Sam’s Club dramatically lowers penalties for failure to tag pallets from $2-3 dollars per pallet to just 12 cents – what Wal-Mart estimates it will cost Sam’s to do the tagging itself. It also pushes back the rollout schedule announced the previous January, saying the tagging requirement will apply only to pallets sent to the DeSoto DC or stores served by that DC in 2009. DC. Pallet-level tagging is expected to be rolled out chain-wide in 2010, while the deadline for tagging sellable units is "under review."
FEBRUARY 2009	Procter & Gamble says that after “validating” the benefits of RFID in merchandising and promotional displays, it is ending its pilot program with Wal-Mart for those displays, implying Wal-Mart is not acting on the information to improve store execution.

Quantifying Wal-Mart's gain from RFID

A news article from 2005 assessing the effectiveness of RFID implementation

Wal-Mart Stores Inc has offered the first piece of quantifiable data that shows the benefits of its RFID rollout, which currently is one of the worlds largest.

Wal-Mart, which has mandated that its suppliers use RFID technology, commissioned the University of Arkansas to conduct a 29-week study to analyze out-of-stock merchandise at 12 pilot stores with RFID and 12 control stores without the technology. The study, which Wal-Mart stressed, was independent, found a 16% reduction in out-of-stocks and that out-of-stock items with RFID were replenished three times faster than comparable items using traditional bar codes. Wal-Mart also saw a 10% reduction in manual orders, which mean a reduction of excess inventory. This is no longer a take-it-on-faith initiative, said Wal-Mart CIO Linda Dillman, in a statement. The company also reiterated its intentions to use the newest hardware standard, known as EPCglobal Generation 2, which is expected to become the first RFID standard to be ratified by the International Standards Organization early next year. Gen2 truly makes the 'sub 10-cent' tag become a reality, Dillman said. Given the recent drop in price of Gen 2 tags, which has been 70% in some cases, Wal-Mart said it expects to begin accepting goods tagged with Gen 2 tags in January and expects to stop receiving older-generation tags by mid-2002. But don't wait - make the transition to Gen2 as soon as possible, Dillman said to suppliers. Her comment likely will set suppliers' eyes rolling. This year, Wal-Mart, the world's biggest retailer, began to install RFID equipment in more than triple the number of its stores where RFID technology already exists. By November, the company would have more than 500 retail outlets and five distribution centers equipped with RFID. By the end of 2006, more than 1,000 outlets will be RFID live. About 130 suppliers currently ship to Wal-Mart using RFID technology, and another 200 suppliers are expected to join then in January. By early 2007, the goal is to have more than 600 suppliers using RFID

Reference: news article from the Logistics Business Review, publiched 18^th October 2005

WalMart and RFID, What Walmart wanted RFID to do for them

Wal-Mart dreamt of achieving a great RFID enabled, fool proof, error free, transparent supply chain. RFID readers were installed st the stores and various centres. WalMart intended to budget this technological expansion by covering in the normal capital budget.

The company has installed RFID readers at the receiving docks, at the back of the building, near the trash compactors, and between the backroom and the retail floor.

RFID enables the store operators to know what is inside a contained by just waving the container having an RFID tag, the reader at the receiving dock records the data at the time of arrival, This ward off the ‘need’ to actually open the box to know the contents of the box. It is known beforehand what are the contents of the box. This also helps in reducing time loss during shipment. Before bringing the contents to the sales floor, tags are read again. Sales point are devoid of any RFID reader but to account the inflow and outflow material, readers are available at the box crusher point, thus cycle completes. The tag entered the database with arrival and finishes with the crushing of the box.

The software helps in keeping a track of different items sold to the customers and the number of items brought down to the sales floor. Information thus generated tells about the particular items that will be depleted from the shelves. The software keeps generating a list of items that need to be picked from the go-down or backroom on to the shelves.

Handheld RFID counters are provided by WalMart which act like Geiger counters WalMart has deployed them as pilot devices in some stores and will be deploying them in other stores.

Wal-Mart has also established a retail link extranet with all its suppliers. This enables them to share data from all RFID read points with their suppliers. When a case is brought out to the sales floor, the status reads  'being put on the shelves' , when at the trash compactor the status changes to  'on shelf' .

Thus within 30 minutes the suppliers get updated on the movement and location of their goods. Suppliers are also learning how to match tags with products and where to place tags for optimum readability. This initial experience will keep them ahead of their competitors.

Wal-Mart expects this technology to:

• manage inventory more efficiently,
• reduce numbers of data entry errors, and
• lower human labour costs in a distribution center

The retailing major is intending to use the data to keep track when stock is running low on shelves or when items have been stolen. The other advantages expected are:

The movement of inventory can be tracked
  - Goods can be received and shipped faster
  - Ease of predicting product demand
  - Shoppers can save time
  - Out of stock situations can be avoided
  - Shoppers get a better deal as system becomes more efficient
  - The right products are available at the right stores at the right time
  - Boost sales 

With all these advantages in sight, Wal-Mart is confident of sure success to ensue on adopting this technology.

Using the Supply Chain for competitive advantage

The latter half of the last century i.e. 30 years, saw some phenomenal advances in the efficiency and effectiveness of industries in terms of their supply chain and logistics. Concepts like SixSigma, Lean manufacturing, Kanban cards, Kaizen, Just in time etc. were the undercurrent of development in the industrial world. In fact companies like DELL and Nokia considered their supply chains as the basis for competitive advantage in the market. FedEX, DHL were actually competing on time and cost savings. Implementation of ERP was also a buzzword. 

more updates coming on this issue very soon....

Why RFID now??

There are certain factors that should be accounted for before having a technology started in the industry. Talking in terms of RFID we can consider four factors. STANDARDS in the absence of some global standards and regulatory body that can formulate some define rules and regulations technologies take up varied faces and are rendered un-interchangeable. Consider left hand and right hand driven cars, or the difference in electrical appliance sockets in US and other places, I am not saying any of these are less efficient than other or vice-versa, but absence of standards makes the technology region centric. If any such thing happens technology is not able to get the global flavour and becomes redundant. Standards can decide what bandwidth of spectrum to use in what applications, directives for usage of RFID on animals and humans.

Second standards that can be considered is COST, any new technology aspire to cut cost and effort, but the technology should not be so costly that the saving that is intends to make become insignificant. SUPPLY, supply of the technology, its installation, training, maintenance and query resolution are utmost important, in the absence of these facilities the technology will become a cognitive burden on the organisation trying to put it to use. When WalMart initiated the RFID tagging the hardware market (tags, reader, printer) were expected to grow to $5 billion in a span of 5 years, at a steady and healthy growth rate of 41%. HARBINGER, first movers have advantage, but that comes laced with risk, so naturally leaders in industry are expected to comply with new technology, as it happened in this case also WalMart, The US DoD and other leading companies gave the Harbinger effect.

The implementation of RFID is not only because of business motives there are societal forces behind it also, their roots are in the terrorist attack of 9/11 attack, and the mad cow disease that grappled The US which led to banning of potential prior-tainted animal feeds in the US in 1995. The forces grew with public distrust of corporate financial reporting which gave birth to Sarbanes-Oxley Act.

The Tipping Point

It doesn’t require very smart bunch of grey cells to tickle to make one understand that this blog speaks about RFID and its business impact, just to give a small brief, RFID or Radio Frequency Identification is not a new or disruptive technology, RFID was developed in 1969 and patented in 1973. So why is everyone is talking about RFID, RFID tagging and all sorts of impacts that it carries with it, what started this discussion. This article basically is all about that tipping point that kick started all this discussion that hovers around RFID. In 2003 out of the blue WalMart the biggest player in retail in the world, asked it 100 most celebrated suppliers to comply with its demand of have all their products radio tagged. So what was the order that WalMart came out with --- “In June 2003 Wal-Mart first announced its plan to implement RFID technology in its supply chain by January 2005; this caught many of the suppliers unawares. Though the plans envisaged compliance from the top 100 suppliers, around 129 suppliers jumped into the fray, afraid of being left behind in the race”. Following the footsteps of WalMart other US and European retail companies started similar RFID initiatives, including Albertsons, Carrefour, Metro, Target and Tesco. To add more salt to the whole story The US Department of Defence issued a similar directive. The technology came out of thin air and before anyone could possibly pant and take a fresh look, thousands of companies, suppliers, resellers, retail companies, sales, courier companies fell under some kind unsaid but compliant RFID initiative.

Okay, Fair enough, everyone’s on the RFID bandwagon, but now not one but two question arise; first, Why Did These Companies get served with a mandate? Second what was wrong with the prevalent bar coding system? What was so compelling about this technology that companies were ready for a risk in the disruption of their supply chains? RFID tagging and labelling was not just another tag on case or a pallet, it required phenomenal amount of re-jig in the company’s operations.

Companies were required to have

·         System in place to serialize the tags

·         System to read, track and leverage value out of all the data

·         Systems to synchronise data-driven processes within the supply chain.

That’s too much of a significant change to bring about.

The basic premise at that time, I mean circa 2003 was is RFID actually a revolutionary technology or is it just like another of that cost burdening technology. As someone posted a cartoon on some newspaper that I happen to read some time ago, the cartoon depicted a person under a swarm of paper and files, while an overseer was basking in the glory that they needed to increase the paperwork because they wanted their organisation to go lean so they may reduce paperwork, “more paperwork to attain less paperwork” What we can today say with much surety, just like the personal computer, the fax machine, the internet and bar codes in their inception, RFID has the potential to transform commerce. RFID promised to take people out of the identification and data collection loop. A study by IBM showed that RFID reduce labour involved in the receipt of goods by 60 to 90 percent. Proctor & Gamble reduced the number of forklift drivers at a manufacturing plant.

Labour savings is not where the bigger benefits of RFID lie. Rather bigger benefits come from RFID’s potential for solving a data-availability problem. 

RFID improves product availability at the retail level without adding inventory by helping companies better track, automate the flow of and understand the condition of goods in the supply chain. 

a study by Grocery Manufacturers of America found that consumers cannot find the product they are looking for 8 percent of time. Advertised products face out-of-stock problem twice as frequently as non advertised products. When shoppers are unable to track the product of their choice, buying decision is generally postponed or they shop the product elsewhere. This puts around $6 Billion dollars of sales in limbo. WalMart estimates that RFID will allow recapturing one percent of revenue by improving out-of-stock. This translates into about $2.5 billion.  We have discussed how RFID can help in maintaining inventory and helping us ward off out-of-stock problem, the flipside problem is of excess inventory. According to various estimates 30% of inventory is buffer stock which exists just because of the fact that the supply and demand information is not precise.