In this article from 2010*, Andy Thomas looked at how RFID technology had fared and what opportunities were opening up for converters.
Most label converters have passed over the opportunity to move into RFID production because they cannot see a way of making profits from what is, on its own, a low value commodity item. Most of the big projects in the RFID sector have involved RFID inlay manufacturers making deals directly with end users.
These large-scale roll-outs have had met with mixed success. Procter & Gamble and other CPGs, for example, have said they cannot get a payback on pallet/case tagging at current tag costs. But Marks & Spencer and American Apparel have reported a sales uplift of anything up to 25 percent after introducing closed-loop passive RFID-based tracking systems at up to 15cent/tag.
In fact the apparel industry has been one of the notable success stories for RFID. This year global fashion company Gerry Weber will seek to take things one step further by combining RFID-based inventory management with loss prevention. The company will use RFID technology in over 25 million garments a year through an RFID chip embedded in a care label. The Avery Dennison RFID fabric care labels will be applied in the manufacturing process, eliminating the need for retail staff to fit and remove conventional bulky security tags in-store. The RFID label is automatically deactivated after the customer has paid for the goods at the checkout, while the inlay is washable up to 60 deg Celsius and can be dry-cleaned without damage.
In Japan, the government was behind a consortium of apparel and textile companies which recently implemented item-level RFID technology through the supply chain. The solution – developed with UPM Raflatac – not only streamlines the check-out process, since clerks can scan all products for payment simultaneously, but also allows the collation of data on customer profiles, trends and goods movement, creating an excellent basis for brand strategy planning and product development.
Airport baggage tracking is an RFID application yet to take off in line with earlier expectations. A major reason has been confusion about the systems available and how to deal with different frequency standards globally. This situation has led Siemens to sponsor the RFID Baggage Tag Benchmark, an ambitious study carried out by systems integrator Odin to help airports and airlines understand the key characteristics behind successful RFID baggage tagging and how current tag offerings ‘stand up to scientific scrutiny.’
‘We've had airports contact us about using stimulus money to modernize baggage systems in an effort to make their airports more attractive to international carriers and cut costs at the same time,’ commented Patrick J. Sweeney II, Odin’s founder. ‘Airlines and airports must replace 35 year-old barcodes, but don't know what RFID systems are best. Odin’s RFID Baggage Tag Benchmark provides answers.’
Outside the commercial sector and mass transit systems, government agencies have been the major customers for RFID tags – particularly for passports, ID cards and military logistics.
The converter’s world?
As RFID moves forward in terms of functionality and real-world applications, converters should be looking for entry points into the technology – particularly where the opportunity arises to sell a solution in partnership with IT consultancy and hardware suppliers. This approach was pioneered by Swedish converter Nordvalls, which has formed just such a consortium to offer a turnkey RFID service to end users including leading automotive parts suppliers.
Certainly the RFID converting equipment is now widely available from suppliers like Muehlbauer and Schober. And programming the chips is another service which converters can offer now user-friendly software is available. An example is Tharo Systems’ RFID Wizard for the Easylabel labeling package. This allows converters to design, report, program and print HF or UHF smart labels, with automated creation of EPC (Electronic Product Code) and DoD (Department of Defense) smart labels where required. The data encoded onto the RFID chip can be printed onto the label as a text or bar code field.
RFID technology is heading in an interesting direction for label converters with the development of Near Field Communication (NFC) systems. NFC is a two-way, RFID-based communication technology – sometimes called ‘contactless’ technology – used in a wide array of applications including ‘fast-lane’ payment at supermarkets and transit payments. Of more interest to converters, NFC is also compatible with the new generation of smartphones, opening up interesting possibilities for direct communication between an RFID label/tag and consumer– communicating detailed product information, for example, or linking to on-line competitions or surveys. Japan has led the way in these applications, and in Tokyo one can find large numbers of POS RFID readers in retail stores, in restaurants and on transport networks.
One print services provider which has already taken advantage of these developments is Hansaprint, which has announced a joint project with UPM Raflatac involving the customization of NFC RFID tags.
The project allows customers to create and buy NFC-integrated print products online through the ‘TagAge’ portal. TagAge offers customized NFC tags with variable layout, encoding and materials possibilities, supporting an expanding range of RFID products. A recent addition is ‘Label-on-metal’, an NFC-enabled label for metal surfaces which is only slightly thicker than a normal label.
‘Improvements to our web service and product offering are the logical evolution of ongoing market altering work,’ enthuses Jukka Saariluoma, development director at Hansaprint. ‘We believe we now have the structure and a fantastic start to harness the imagination of users within the NFC market.’
Saariluoma believes that TagAge's focus on small and medium volume customization will help create new market opportunities as end users develop innovative applications with NFC, both in business-to-business and business-to-consumer. It is well worth taking a look at the portal at www.tagage.eu. Printed electronics, greatly reducing the cost of RFID tag production, could also open up some interesting possibilities, as Raghu Das at RFID consultancy IDTechEx points out: ‘We will see new consumer services and propositions tackling areas like counterfeiting and gray market diversion because the manufacture of hundreds of billions of disposable circuits is possible.’ Among the examples given by Das already on the market is a 30c shelf edge tag which allows the price of a product to be updated remotely.
Label converter Schreiner Etiketten in Germany has shown conclusively that converters can make an impact in the RFID world, making a specialty of these kinds of applications. The company recently launched a temperature-resistant RFID label for use in the harsh environment of an auto industry paint shop. The company’s High-Temp labels resist temperatures up to 220 °C (428 °F) as well as the harsh chemicals found in paint shops, and achieve reliable reading ranges even in metallic environments. This allows automakers to mark vehicle bodies between the welding stage and final assembly, something not possible up to now.
So before you write off RFID, give some thought to the possibilities – and remember that you will only make a profitable sale if it is total solution involving IT consultancy and hardware vendors.
*This article was first published in Labels & Labeling issue 3, 2010
Back in 1998, Chris Hook wrote in detail about RFID technology in an article on 'The essense of smart labels'
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