Avery Dennison launched its RFID Converter Academy in April with a two-day seminar looking at how label converters can become involved in RFID label production
The conference was held at Avery Dennison’s European headquarters in Oegstgeest, the Netherlands, which houses the I.lab, where visitors can experience real-world applications of RFID technology.
Avery Dennison’s materials division now jointly runs the I.Lab, and is focused on marrying its expertise in self-adhesive label materials technology with the expertise in RFID built up by the company’s RBIS division.
Up to now most successful applications of RFID technology have been in the apparel sector, but Avery Dennison sees major opportunities in non-apparel areas including automotive, aviation, cosmetics, fresh food, healthcare and track and trace.
The market for RFID certainly looks healthy. Figures given by Tony Fazhev, RFID product manager at Avery Dennison Label and Packaging Materials, show year-on-year growth for non-apparel applications in 2017 of 21 percent, expected to be repeated this year. Volume growth between 2018 and 2021 is estimated at 271 percent, with the market worth 11.5bn euros by 2023. This translates to a demand for 3.5 billion tags this year, rising to 6.5 billion by 2021.
Fazhev said Avery Dennison sees label converters as the main route to market for these new application areas, as they have the primary contact with end users: ‘We have put in place a ROI and proof of concept service program to support label converters.’
Avery Dennison has been working for two years with The Future Laboratory consultancy to understand the longer term trends which will propel RFID growth.
The Future Laboratory’s Ruth Marshall-Johnson focused on how a rapidly changing consumer culture is already transforming the retail environment. The old marketing demographics no longer apply, said Marshall-Johnson. People are far more likely to be grouped according to their lifestyle and culture than by age group, so older consumers want to behave like younger ones – to travel, communicate and so on.
And as consumers, people are looking for online service rather than shopping in retail stores and are developing a ‘cult of convenience, demanding ever faster speed to product.’ This requires retailers and brands to be highly agile in their management of stock – which is where RFID plays a key role. The Internet of Things (IoT), the development of ‘smart cities’ and people feeling increasingly part of virtual global cultures or communities will reinforce these trends.
At the same time consumers feel the need to be guided through this new world order, looking towards smart devices for help and organization. This will further propel usage of smart devices, RFID and NFC.
Marshall-Johnson picked out five key trends – ‘change pillars’ – which will all impact the development of smart labeling technologies:
- Sustainability: Younger consumers in particular are ‘both pushy and lazy’ in demanding sustainability, and looking for brands to give them a way to practice ‘conscientious consumerism’. ‘Guilt-free consumption is what younger consumers are looking for. For example an app to find out where water refills are available. The positive impact is to re-frame the idea of waste as a plentiful resource.';
- Transparency: Consumers want to know about provenance – the source of ingredients and even packaging – and are prepared to pay a premium to get it. Trust in brands is directly linked to transparency. Intelligent labeling helps consumers on their quest to understand more about the products they are engaging with and provide ‘a single source of truth’ by linking up with the Internet of Things, blockchains and micro-tags;
- Removing friction: Merging the Internet of Things with commerce removes friction from everyday life. Examples include a fridge which ‘knows’ the expiry date automatically re-ordering milk; or Amazon’s pilot ‘Just walk out’ store where payment is automatically handled by an app without needing to check out;
- Real time and reactive: Dynamic pricing and smart displays – for example interactive mirrors – allow businesses to offer ‘frictionless engagement’ as consumers increasingly outsource decision making to Artificial Intelligence (AI) devices; and
- Immersive technologies: Developers are exploring new forms of sensory exploration, including haptic (touch-driven) interfaces and younger consumers (16-24) are showing a great appetite to engage in virtual reality and augmented reality. ‘Smart sensors will be used to create hyper relevant content. The opportunity is to add layers of information that would not usually be present in a label,’ said Marshall-Johnson. Designers are paying more attention to the role products play in the broader ecosystem. ‘Data will be shared between products and devices, and this will lead to higher levels of personalization across all channels. We will embed adaptability into products and use diagnostic sensors which will create new data sources.’
George Dyche, director innovation and product line management at Avery Dennison, has been working on RFID technology for over 15 years, and gave delegates a detailed explanation of how it works.
RFID allows the wireless transfer of data to or from electronic tags, which are attached to or embedded in items. In passive RFID – the main subject of the seminar – data transfer is activated by a radio signal.
Different frequency ranges are used for different applications, and the two of interest to label converters are high frequency (HF)/NFC; and ultra-high frequency (UHF). HF/NFC chips operate on the 13.56 Mhz frequency, have a short read range and are mainly used for library and consumer engagement-type activities. UHF operates in the 860-960 Mhz range and has a read distance of up to several meters. This is ideal for item-level tagging and supply chain applications.
An RFID chip consists of a carrier material, which can be PET, paper or fabric; an integrated circuit (IC) which provides the ‘smart core’ and memory; and the antenna, formed into a geometric shape ‘tuned’ for different applications.
There exists some confusion between NFC – now built into both Android and Apple iPhones – and UHF. As Dyche explained, the key difference is in how many other devices are addressed. UHF is a ‘one to many’ device, broadcasting over longer distances, and with a memory typically limited to 96bits. NFC/ HF, by contrast is a ‘one to one’ coupling technology with a much shorter read range and larger memory.
Both UHF and NFC have challenges around metal and liquids, which can affect the propagation of radio waves by scattering or absorbing RF energy.
Much work has been carried out by regulatory bodies to ensure UHF systems are interoperable. RAIN RFID is a global alliance promoting the universal adoption of UHF systems, including describing how data is stored, managed and shared in Cloud-based data networks.
The NFC Forum promotes the adoption and standardization of this technology globally.
In a Q&A Dyche said there are still some challenges in standards – for example different industries can have their own standards requirements – so this situation always needs to be checked when a new RFID implementation is planned.
Because all RFID chips have a unique ID and every product can be given its own unique product code – administered by EPCglobal – a wide range of security and other functions are opened up.
In addition, a range of functionalities can be added to the chip according to its final application. These include additional memory, different levels of encryption, digital signature and anti-tampering – even a counter which tallies the number of available refills in a vending machine. Some chips are stripped down to drive cost down. Chips intended for use at point of sale can have a ‘kill’ functionality added.
Typically, the highest specification chips are used for security and brand authentication applications. There will be lesser requirements for ‘industrial’ applications such as work-in-progress and logistics.
In cases such as logistics and airline baggage, human readable information such as barcodes will need to be printed at the same time the chip is encoded. This is carried out by appropriately specified direct thermal and thermal transfer printers.
One of Avery Dennison’s key specialties is antenna design, which is critical in defining read range and how the RFID system performs in different physical environments.
Asked in a Q&A about the potential for conductive inks to print antennae, Dyche said they are ‘not quite there yet’ and still relatively expensive because of the use of rare metals like silver to achieve required levels of conductivity.
Andrea Ranzato Vianello, president and CEO of the Graphimecc Group, discussed the requirements and challenges of converting RFID labels. Graphimecc has long specialized in machines for variable data print processes, so the move into RFID was a natural one for the company.
Vianello described the main challenges facing label converters looking to move into RFID label production:
- Building an RFID ‘culture’;
- Handling delicate inlays which are easily damaged during the production process; and
- Quality control: ‘You cannot see anything! There is no visual feedback.’
Correct web tension on the RFID label converting line is critical because it is so easy to break the dry inlay backing liner. This requires low tension to be maintained throughout the machine, including on the rewinder.
‘We recommend 1 kilo in the machine and 500g on the rewind because labels are stacked up there, which increases the problem.’
Mechanical pressures also come from web curvature as it moves through the machine.
Registration and die-cutting have to be extremely accurate – auto register is an absolute requirement – and electro-static discharges have to be avoided, as these can kill the chip.
‘This is a very big problem,’ said Vianello.
Automatic quality control is the final critical factor, and the Graphimecc machines are configured with automatic removal of defective material and re-splicing.
Vianello said Graphimecc’s machines are built to order depending upon the label converter’s position in the market: machine specs are different for a converter new to the RFID market compared to an existing producer looking to develop a new sector, or looking to increase productivity.
After an excellent evening of networking in Avery Dennison’s European ‘home town’ of Leiden, the second day was kicked off by Nordic ID, a leading specialist in automated inventory and product tracking systems. General manager Jukka Hieta looked at successful examples of RFID implementation carried out by his company.
In the fashion retail sector, for example, Macey’s reduced inventory by one third and reported increased sales of between 5-20 percent because of greater product availability. Marc O’Polo reduced its stock take from 24 hours to just 20 minutes after all items were RFID tagged, reporting 99 percent accuracy in locating items.
RFID is also being successfully used in the automotive sector for process control by companies such as VW, Audi, Mercedes and Porsche, as well as the Mclaren F1 team.
In aviation RFID is gaining traction. Examples include tagging seat covers, which need to be tested for flame-resistance after a certain number of weeks. More airlines are now embracing RFID for luggage handling, not only ensuring delivery to the correct destination, but, through Cloud-based software, allowing passengers to trace their luggage using a smart phone app. This is now being trialed. In the healthcare sector, blood bag tracking is just one of a long list of RFID applications. Nine different barcode stickers were replaced with one RFID tag, which also sets off an alarm if the blood is delivered to the wrong patient.
Hieta looked at the hardware reader technology now available, including pocket sized RFID readers which link to iOS and Android. They have a 2-meter range and are able to locate items with up to 99 percent accuracy.
Fresh food opportunities
In the final presentation, Peter Jackson, global market development manager RFID Food at Avery Dennison, enthused that RFID ‘is finally happening’. Echoing themes discussed on day one by The Future Laboratory, he explained to delegates how changing consumer habits are presenting challenges and opportunities for brands and retailers which RFID helps address.
The message of this conference, repeated again by Jordi Baeta, commercial director of Avery Dennison RFID, is that the company wants to work with label converters to identify the opportunities to bring RFID to market.
‘The label converter has the most direct channel to market. It will be the label converter in between us and the brand owner who actually supplies the RFID label to the retailer. Avery Dennison is trying to connect the dots. We can suggest who is the best integrator or supplier of readers who can help you, as a converter, to bring the whole solution to your customer.’
Peter Jackson urged converters to take existing models from retail and apply them to other sectors like health and beauty. ‘Beauty and apparel are closely related. Complex SKUs and not much room for displaying goods. It’s very hard to make sure that all items are always available in complex displays like lipstick. RFID gives more visibility.’
The challenge, said Jackson, is ‘how can we get money for this increase in visibility.’ It requires that retailers have the ability to manage data before they will pay for tags, which means converters will need to work closely with RFID system integrators. ‘Stores hold around 20,000 products which are not on display, or roughly 20 percent of their total stock. The difference between having an item in stock and being able to find it – and knowing which items are out of stock – is equivalent to a sales increase between 2-12 percent.’
As more shopping moves online, ‘brick and mortar’ retailers are also opening virtual stores, known as ‘omni-channel’. The challenge is how to connect both, so the customer never feels they are interacting different operations.
‘The consumer wants the same product, the same prices and the same experience both in-store and online. And this makes it even more critical to know that the same products are available and at the same prices. Sales will always be greater on RFID tagged items simply because they are available.’
Jackson turned his attention to how RFID can help prevent product diversion. ‘If brands have RFID-encoded all products being shipped, and find some outside the supply chain, they can easily trace them back. It’s the same with counterfeit and brand protection.’
Following a tour of the I.Lab, George Dyche stressed once again Avery Dennison’s willingness to work closely with converters to bring RFID/NFC applications to market. He said the technology is now able to cope with almost all applications because of the company’s bespoke antenna designs. Avery Dennison now has inlays that work with specific materials like denim and glass, as well as applications which before presented significant challenges, such as metal surfaces, liquids and microwave ovens.
‘Avery Dennison will be an extended resource to label converters. We can test inlays, provide technical advice and even visit customers together.’