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Benetton Backtracks On RFID Announcement

Consumers could throw a monkey wrench into RFID’s killer app. In the March 28, edition of SCAN/DCR, we reported that Benetton, and Italian clothing manufacturer with over 5,000 retail outlets, was rolling out an end-to-end RFID tracking system. The announcement came from Philips, who was to supply the I.Code RFID tags for the installation. But, within days after the Philips announcement, Benetton issued a press release claiming it had not decided on whether or not to use RFID.

So what happened? The best bet is that Benetton was spooked by consumer privacy groups who threatened boycotts, claiming the company was trying to track their movements and buying habits. [Editor's note: SCAN/DCR mentioned one such group—CASPIAN (Consumers Against Supermarket Privacy Invasion and Numbering)—in our March 28 story.] In its April 4 announcement, Benetton told the world that none of its clothing lines had RFID tags embedded in labels, but the company stopped short of saying it will never use the technology. Rather, it said it reserves the right to use the technology in the future.

RFID vendors who think this story doesn't apply to them better think again. If consumers are going to fight this technology and refuse to buy products with embedded RFID tags, the giant supply chain market … the killer app for RFID may vanish. These consumers have actually dubbed RFID tags as "spy chips."

For years, we've witnessed the general public's reaction to biometric ID. Even with daily articles harping on identity theft problems, people still think biometric ID is simply another way for the government to invade their privacy and monitor their actions. And, many of the most outspoken critics are also very well-educated. Katherine Albrecht, the head of CASPIAN is a doctoral candidate at Harvard. [For more on CASPIAN and its reply to Benetton's latest release, see Sidebar, ed.]

The irony of all this is that many of the groups complaining about RFID believe the tags are merely antitheft devices. We find it difficult to believe they have never noticed that most stores, particularly drug stores, have antitheft technology in use today and have had the technology for years. Surely, they have heard warnings go off when someone tried to leave a store with an item that did not have the EAS (electronic article surveillance) tags deactivated. Even if they have never heard an alarm, they must have noticed cashiers deactivating the security tags at the checkout counter.

The EAS issue alone seems ludicrous to us, but the idea that people think the government or retailers are going to use RFID tags in garments to track consumers' movements really blows us away. The tags have a read range of under three feet in most cases. They are not global positioning systems. But wait a minute, we're not average consumers. We know about read ranges and passive versus active tags. They don't.

Therein lies the problem. Our industry needs to educate consumers. After all, some people still think bar codes are the mark of the devil, so why would we think people somehow inherently know how RFID tags work? Sounds like a simple problem to solve. We just have to spread the word about RFID and let everybody know about all the frequencies and protocols associated with the technology. We have to show them the difference between a tag that can locate one automobile in a group of 10,000 cars sitting on Ford's lot and a tag that has to be read by almost touching the chip. Wait a minute, that's not so simple.

We were blindsided by the whole Benetton story. It really hadn’t occurred to us that there would be so much consumer concern over RFID privacy issues. Maybe we were caught up in other industry problems.

Benetton has left the door open to go ahead with its RFID program in some form, and we believe it probably will use the technology at some point. It may be just biding time now, waiting to see if the consumer issues fade away. It will be interesting to see the reaction of other retailers to what has happened with Benetton. Will they run scared? Competition is tough in the retail sector and giant chains cannot afford to lose business because of technology. Technology is supposed to help increase bottom lines ... not deter sales.

CASPIAN Says Compromise Not Good Enough

The following is CASPIAN’s response to Benetton’s April 4, 2003 announcement:

Benetton has publicly retreated from plans to fit clothing with tiny remote surveillance and tracking chips, according to a press release issued Friday, April 4th.

CASPIAN is pleased that Benetton has responded to consumer concerns about privacy and has reassured consumers that none of their clothing currently contains RFID devices. According to CASPIAN’s conversations with the company, Benetton has been overwhelmed with negative attention stemming, in large measure, from CASPIAN’s call for a worldwide boycott.

Benetton’s announcement is a vast improvement over the March 11th press release (issued by Philips Electronics), which implied that Benetton planned to immediately chip 15 million clothing items. However, we are still concerned that Benetton has not categorically denied that it will chip clothing in the future. Instead, Benetton states that it will continue to “analyze” and “evaluate” the technology. Benetton has expressly reserved the right to use RFID tracking chip technology in the future.

CASPIAN’s original call for a boycott had asked Benetton to:

(a) Publicly renounce its plans to equip clothing with RFID tags

(b) Provide a guarantee to customers that all garments available for sale by Benetton are “RFID-free”

CASPIAN applauds Benetton for responding to the second of these requests, a move that will reassure many consumers. We encourage Benetton to take the next step toward social responsibility and address consumer concerns over RFID technology by publicly renouncing plans to invest further in the technology.

Benetton’s decision represents a victory for consumers across the globe. It is our hope that other companies will follow Benetton’s example and assure their customers that “spy chips” will not begin appearing in their products.

Katherine Albrecht

Founder & Director, CASPIAN

http://www.nocards.org

RFID World Deemed A Success

In its inaugural debut, RFID World 2003, held on May 13 and 14 at the Ft. Lauderdale Convention Center, made a positive impression on AIDC/RFID leaders. Several RFID gurus we spoke with said they thought the event “turned out very well.”

Attendee numbers have not been released yet, but most people we spoke with thought there were approximately 500 resellers and prospective end users who showed up for the two-day event. Although that may not seem like a huge number, most vendors at the show believe the attendees were all qualified buyers.

UCC/EAN Launch AutoID, Inc.

MIT Auto-ID Center hands the baton to the UCC and EAN for the next lap in the race to take RFID to commercial markets.

Perhaps some RFID vendors can breath a little more easily now. At the request of the Auto-ID Center, the Uniform Code Council (UCC) and EAN International have taken the reins from the MIT organization. On May 21, 2003, the UCC and EAN jointly announced the launch of AutoID, Inc., a not-for-profit organization that will oversee commercial and technical standards for the EPC™ (Electronic Product Code) Network. AutoID, Inc. will handle press and marketing, as well.

So why can RFID vendors—and perhaps some bar code vendors, as well—breath a little more easily? The MIT Auto-ID Center has frequently been a thorn in the side of most RFID players. The concept for the Center was a good one; sponsors, consisting of potential end users, RFID vendors, the UCC/EAN, and even some bar code vendors, paid the money needed to enable a group of scholars to study RFID technology and pursue new breakthroughs in cost and performance. The Center also developed the Electronic Product Code. But, the MIT group became a two-headed monster.

Stories about the Center began appearing regularly in the mass media, and inevitably, the articles always seemed to pitch RFID as a bar code replacement. Headlines screamed: The End of the Road For Bar Codes Is Here! And we all know that is just not true.

The articles also touted the arrival of the 5-cent tag, which angered most RFID vendors. Vendors, whose passive RFID tags commonly run between 25 cents and 75 cents, were now expected to show potential customers a tag for 5 cents … and that simply wasn’t realistic.

Some may claim that the Center was not responsible for what the mass media printed, and that, at the least, it brought attention to RFID technology. Maybe that’s true … the key word being maybe. Of course, the Center does not create the headlines for the media. But, we find it difficult to believe that the press was entirely responsible for all the hype and sensationalism. Most members of the mass media probably don’t understand the technology, so someone had to be putting the “bar code replacement” notions in their heads—as well as the 5-cent tag. So, while the Center did attract attention to the technology, it was not always the kind vendors relished.

The Center also ignored intellectual property (IP) rights. It was frequently rumored that the Center wanted no part in delving into patent issues. That was a fight that would have to be dealt with by RFID tag and IC (integrated circuit) vendors. And while all this was going on at the Center, vendors had to bite their tongues to avoid incurring the wrath of their potential customers, the giant end-user sponsors of the Center, which included the likes of Unilever, Procter&Gamble, Wal-Mart, Gillette, and others.

Vendors were not the only ones who were growing annoyed with the Center. Some outspoken members of the Auto-ID Center were thumbing their noses at the rest of the standards world. When the EPC was being developed, we questioned some members of the Center to determine if the group was going to work with ISO or other standards groups, such as the UCC-sponsored GTAG committee. In many cases the reply was, “We don’t have to work with these groups. Our end user members will determine standards. If they decide to use EPC, the rest of the world will just have to accept it.”

If the Center and its affiliates had only stayed true to what was initially expected of them, it would have been better for everyone involved with RFID. It was a great idea, and the organization has achieved some accomplishments. First, it brought potential end users together in a common forum to discuss what needs they have for the technology … in essence, how they would like to see it work. On a technology side, the scholars at MIT and Auto-ID Center affiliates at Cambridge University in England, Adelaide University in Australia, University of St. Gallen in Switzerland, Keio University in Japan, and Fudan University in China, have done amazing things with performance issues and in ways to reduce the cost of the technology.

You have to give credit where credit is due. Yet, even the UCC, who was a founding sponsor of the Center realizes it was time for a change. “The Auto-ID Center took RFID into the clouds,” said Cecily Laidman, UCC director of public relations. “But, although it was building unrealistic expectations for adoption, it did bring the technology to light.”

UCC Director of RF Programs, Chris Hook told SCAN/DCR, “MIT did not have a charter to address the significant challenges of making this technology real. This was a fundamental flaw in the original concept. The Auto-ID Center was an academic research project. It was not meant to go further. It takes an organization with the experience of the UCC or EAN to make RFID a real-world technology. That is why we have created the new AutoID, Inc. organization.

“Contrary to the perception in the [AIDC] industry, there has been a tremendous amount of thought and background work involved in the UCC’s and EAN’s decision to take on the important challenges of commercializing RFID. We have a well-thought-out plan. This has been a long time coming.”

Part of the groundwork for AutoID, Inc. took place last November when the UCC became an official member organization of EAN International. The two organizations realized they could accomplish more benefits for their members by working collaboratively. One of the first goals will be to determine how GTAG relates to EPC.

“We are highly responsive to the end user community,” Hook told us. “Members want the UCC to develop international standards; they want us to branch out into new technologies that enable their companies to do business more efficiently. We have been involved in bar codes from their inception. The UCC has led the way in e-commerce solutions. The commercialization and standardization of RFID is simply another step in the organization’s ongoing efforts to provide real-world benefit for its members.”

The contracts have been signed for AutoID, Inc., and the organization will be finalized on November 1. Going forward after the November AutoID launch, the Auto-ID Center will continue its research under the name, AutoID Lab. “Members of the Center will now join AutoID, Inc.,” said Laidman. “AutoID, Inc., will function as a subsidiary of the UCC, much like our UCC Net and RosettaNet initiatives. Funds that were contributed to the Auto-ID Center will remain there, but future research dollars will be allocated from AutoID, Inc.

“We were no different than any other sponsor when we were involved in the Auto-ID Center. With AutoID, Inc., we are now able to control and manage the commercialization process.”

“The split is quite clear,” Hook added. “AutoID Lab will be an academic research organization. AutoID, Inc. will address implementation needs.”

Comment: As Hook said, this has been a long time coming. The UCC and EAN are ideally suited to addressing adoption issues for RFID. The organizations have a proven track record for commercializing technology. Simply look at the U.P.C. as proof of how they have standardized bar coding in the retail and supply chain environments.

A representative of one of the leading IC/RFID manufactures told us, “The problem with the Auto-ID Center is that, at the end of the day, its leaders don’t have to go in and tell their bosses they made money. They are academic scholars, not business people.” This sentiment rings true. The Center served a great purpose, but it should have refrained its work to academic studies. It was out of its element in the business world.

We believe this movement by the UCC and EAN will be a tremendously positive event for the entire AIDC industry. It should strike a balance between bar codes and RFID, while helping resolve ongoing standards problems.

For more information: Uniform Code Council, Lawrenceville, NJ, PH (609) 620-4526,

FX (609) 620-1200, Email: claidman@uc-council.org.

SAMSys Launches RFID Consulting Service

North American companies that are interested in implementing RFID will now have a new avenue for gathering information on the technology. Toronto-based SAMSys Technologies Inc. recently announced its intent to open an RFID consulting service. SAMSys Chairman and CEO Cliff Horwitz believes the new service will fill a special void in the RFID market place.

“There are more than enough business consultants who can make sound arguments for using RFID,” said Horwitz. “At the other end of the spectrum, you have systems integrators who engineer RFID packages to fit into existing architectures. What we want to do is help resellers and their customers choose the correct technology. RFID is not a single technology; it is a family of technologies. Consequently, one technology does not fit in all applications. SAMSys is offering these services at the request of VARs and users.”

One problem in the market is that RFID is often billed as a cure-all for tracking problems. Horwitz believes providing roadmaps for tracking solutions may include RFID … and it may not. “When customers come to us to solve a business problem, the first thing we have to do is determine if RFID can help,” he explained. “If we determine it can help, then we have to decide which RFID technology to use.

“Vendors are technology experts, not business consultants,” Horwitz continued. “For instance, sometimes customers come to us with shrinkage problems. We are not experts in shrinkage; we are experts in technologies that help solve those problems. There’s a fine distinction. To provide the correct solution to their problems, you need to understand their problems completely. The answer to their problems may be a combination of technologies, such as bar codes, passive RFID tags, and active RFID tags. To create a roadmap for the solution requires specific skills. We believe we can provide this service.”

The aim of the new consulting service is to minimize the risk for premature technology obsolescence and excessive capital investment, key concerns with companies considering implementing RFID systems. Horwitz believes scalability is one key way to help ease these concerns for end users.

“RFID can’t do everything,” Horwitz explained, “but someday it might. In the meantime, vendors must offer scalable solutions that give companies the ability to easily add or change RFID technologies. The [RFID] industry is on a finite time line. We must begin to deliver on our promises, and these promises must be realistic.

“Currently, it seems most RFID vendors are looking for the killer app, but most of the ideas they are proposing are sheer conjecture. You can’t wait for the entire supply chain market to explode all at once. It’s not realistic. So, what you have to do is start in smaller niche implementations and allow the technology to grow into larger apps.”

Horwitz said the recent Benetton fiasco should teach RFID vendors a few lessons. Philips announced that Benetton was rolling out an end-to-end, closed-loop, RFID tracking system for its garment business. Within days, Benetton backtracked and said it had not yet decided whether to implement the technology. The second announcement was due to consumer backlash over privacy issues. [See SCAN/DCR 3/28/03 and 4/25/03.]

“Benetton is an extremely important example of how we can make mistakes,” said Horwitz. “I question whether the decision to postpone the rollout was due to consumer privacy issues or financial concerns by investors. Did investors question ROIs and were there even credible ROI figures? I don’t think the company did its homework, so it could truly understand financial issues. The privacy issues just snuck up on them

“RFID is already used in the SpeedPass application and for antitheft protection in car keys. Tens of millions of RFID tags are currently in use by consumers. So, why the backlash against Benetton. The privacy issues were not addressed properly. The RFID industry needs to engage in meaningful dialogue with the press and get the word out. It’s time to grab the bull by the horns.”

Horwitz believes there will be plenty of RFID pilot programs in the next 18 months. Somebody has to explain to these companies that are conducting the pilots how RFID applies to them. Somebody has to say, “If this is what you are trying to do, then this is what we suggest.” SAMSys wants to be that somebody.

The new SAMSys consulting service will be a separate business unit, and, for a fee, any company interested in RFID will be able to use the service.

For more information: SAMSys Technologies Inc., Toronto, ON, Canada, PH (905) 707-0404, FX (905) 707-9944, Email: chorwitz@samsys.com.

Wal-Mart Gives Go-Ahead To RFID

The words all RFID vendors have been waiting to hear were delivered to an attentive crowd at the Retail Systems show in mid-June. Wal-Mart CIO Linda Dillman told eager listeners that the company was encouraging its top 100 suppliers to incorporate RFID technology by 2005.

Wal-Mart spokesman Tom Williams told SCAN/DCR, “For now, we are only looking at using RFID at the pallet and case level. Pilot testing will be done in our distribution centers and in our backroom environment. We have no future plans beyond that level.

Continuing, Williams said, “Our current systems are working well, but we believe RFID may be able to eliminate lapses in our tracking process. We have no pilots running at this time and have not selected any RFID vendors.”

Dillman said Wal-Mart tracks over 1 billion pallets per year. Robert W. Baird Analyst Reik Read told us, “Unless tags reach five cents, we expect the initial implementation will be less than the full universe of pallets.” Should the pallet level implementation go well, Wal-Mart intends to begin expanding RFID to the carton level by 2006. Dillman conceded that this plan is aggressive.

Although the Wal-Mart announcement is based on more-realistic, current, tag prices—affordable at the pallet level—much of the talk at the Chicago show still centered around the “five-cent tag.” But, analysts don’t seem to have confidence there will be a five-cent tag or apps beyond the pallet and case level, in the near term.

Intermec was ready for the announcement with a new Intellitag “Ready-To-Go Retail RFID package.” Zebra and TI were also touting new systems. Watch for more on these announcements in the next issue of SCAN/DCR.

For more information: Robert W. Baird & Co., Milwaukee, WI, PH (414) 298-1030,

Email: RRead@rwbaird.com; Wal-Mart, Bentonville, AR, PH (479) 277-0609.

TAGSys Says It Has World’s Smallest EPC™ Tag

On June 30, we received word from RFID pioneer TAGSYS that it has developed what it calls the “world’s smallest EPC™ (electronic product code) RFID tag.” The new mini tag was demonstrated at the Auto-ID Center Board meeting held the week before in Zurich, Switzerland.

According to TAGSYS spokesperson, Angeline Fraud, the electronic tag is circular and measures just 9 mm (0.35 inches) in diameter. Fraud told SCAN/DCR the new product communicates on a protocol that is compliant with the current 13.56 MHz EPC Class 1 specification developed by the MIT Auto-ID Center.

TAGSYS believes the RFID tag is ideally suited for the pharmaceutical and cosmetics industries, where small tags are nearly a must. TAGSYS contends that 13.56 MHz frequency tags perform better when tracking liquids than their UHF counterparts. Of course, if RFID is to be used for tracking at the item level, it will have to be useable on metal products, cans, and packages containing liquids, such as shampoo, soda, and others.

The Auto-ID Center demonstration showed the tagging of test tubes and chemical solutions with several items being identified simultaneously. The read range for the tag is only a few centimeters, but that is not considered a problem for the designated apps.

For more information: TAGSYS, France, PH +33 4-9127-5756,

Email: angeline.fraud@tagsys.net.

Intermec Bundles RFID Technologies For Retail Market

At the same time Wal-Mart was announcing that it wanted its top 100 suppliers to begin adopting RFID at the pallet and case level, Intermec Technologies was releasing its new Intellitag® Ready-To-Go Retail RFID package. The new offering is a “kit” that enables users to buy everything they need to integrate RFID in a single package. According to Intermec, the package is ideally suited for Wal-Mart’s suppliers who will soon begin implementing RFID in their supply chain systems.

“This is a great time with many sales opportunities for our industry,” said Pam Cory, Intermec VP of marketing. “The U.S. government and big enterprise accounts have expressed tremendous interest in wireless technologies. Much of the activity we are seeing centers on RFID, and we believe all vendors in this market will benefit.”

Cory said big players in the IT world, such as Cisco and Microsoft, also value our industry’s application knowledge. “First, there was concern over Y2K issues,” she told SCAN/DCR. “Then, the focus shifted to ERP systems. Now, everyone is targeting operational efficiencies. The key term is ‘lean manufacturing.’ AIDC technologies, including RFID, can help users streamline their manufacturing processes and keep better control of products moving through their plants.”

The technologies in the Intellitag Ready-To-Go Retail RFID package are not new to Intermec. “We’ve had these technologies for some time,” said Cory. “We simply bundled them to make it easier for prospective customers to adopt RFID. A basic pilot kit sells for $15K and includes hardware, software, training, and service. The pricing for the pilot kit is affordable. It offers the same price breaks as those for a major roll out. Although the package is available to any interested users, most of our initial sales will be to Intermec’s existing retail customers. We are helping them upgrade their systems to RFID and will continue to service their needs as the RFID application matures.”

As RFID adoption continues to grow, Intermec believes retail apps will stir sales in other sectors as well. Intermec already has some major RFID customers for applications in meat tracking, waste processing, Homeland Security, and for the U.S. Army. In addition, it is working on solutions for spirits sales, gaming, and to control drug tampering. “It’s always a matter of cost versus benefits when you target a particular application,” said Cory. “At current technology cost levels, RFID is much better suited for the pallet and case level than the item level. Sales come easier when you can show a clear ROI.”

Comment: Intermec is certainly not the only RFID player to come out with a “starter kit.” Texas Instruments, Philips, and others have all made similar announcements. Wal-Mart’s RFID plans have the industry buzzing.

The Uniform Code Council and its new AutoID Inc. entity will also help keep the excitement level up for RFID vendors. Most predict only good times ahead.

For more information: Intermec Technologies Corporation, Everett, WA, PH (425) 348-2799, Email: kathie.anderson@intermec.com.

UCC Letter To The Editor

June 27, 2003

SCAN: The DATA CAPTURE Report

RMG Enterprises, Inc.

Dear Rick,

I read with great interest your June 13, 2003 article entitled “UCC/EAN Launch AutoID, Inc.”  In it, you capture the excitement and opportunity I, and many others, feel around the next phase in the development of the EPC™ (Electronic Product Code) Network. However, I do take exception with certain commentary in your story and offer the following information to your readers.

Fundamentally, the EPC™ Network is following the course of many significant scientific breakthroughs. That is, development and refinement of the technology in the academic lab (through the Auto-ID Center) followed by commercialization and standardization of the technology by experienced standards bodies – the Uniform Code Council (UCC) and EAN International (EAN). 

What is unique about the development of the EPC™ Network is that the researchers at the Auto-ID Center and the standards experts at the UCC have had a shared vision from the inception of this project. Our goal has been to develop and deploy new radio frequency identification (RFID) technology and associated network services that leverage the Internet to dramatically improve product identification and supply chain management. Central to bringing this vision to reality is the academic expertise of the Auto-ID Center labs around the world and the formation of a specific entity (AutoID, Inc.) to bring the standards discipline needed to deploy this technology as an open system. 

As it has been since the earliest days of the EPC™ research project, the partnership between the Auto-ID Center and the UCC is strong, vital and integral to the long-term success of the EPC™ Network. We look forward to working with the Auto ID Center to deliver the promise of this technology and meet many of today’s greatest business challenges.

Sincerely,

Michael E. Di Yeso

Executive Vice President  and COO

Uniform Code Council 

Alas, Some Users See The Light With RFID

Wal-Mart has decided to cancel its plans to experiment with RFID item tracking, but don’t be alarmed … it’s probably a plus for the industry. RFID is not yet ready for item-level tracking, but it is ready for tracking pallets and cases. And that’s where Wal-Mart will continue to implement the technology. The RFID industry needs to focus on more realistic applications.

The canceled smart-shelf pilot, which was to track razor blade packages from the Gillette Co., was scheduled to run at a Brockton, MA, Wal-Mart store. Wal-Mart CIO Linda Dillman instead decided to concentrate all of the giant retailer’s focus on RFID tracking at the pallet and case level. Wal-Mart announced in June that it is asking its top 100 suppliers to adopt RFID technology by 2005. [See SCAN/DCR 6/27/03.]

Unilever has also said publicly that it believes RFID is not ready for item level tracking. In the company’s own pilots, like Wal-Mart, it is concentrating on tagging pallets and cartons. A Unilever spokesperson said he is not sure Unilever will ever do item tracking, but, if it does, it won’t be for at least five to 10 years.

The reasoning behind Wal-Mart’s plans, and Unilever’s as well, is that the current cost of tags—which averages between 20 cents to 50 cents—is too expensive for item tracking. But, RFID offers great benefits and is much more cost-justified at the pallet level.

Scott Medford, Intermec VP of global business development, told SCAN/DCR, “I was elated when I heard the announcement. I was glad to see Linda Dillman call it straight. RFID is not ready for item-level tracking. Eventually, as improvements are made on the technology, there may come a day when it makes sense to use RFID at the item level. But, that day is still years away.

“There is still too much hype in the industry and it’s hurting our business. Almost every time I speak with a potential RFID customer, I am questioned about the non-existent 5-cent tag. It’s time to be realistic about RFID and push it where it makes sense.”

Medford compared RFID to Bluetooth technology. “Bluetooth is a great technology that got a horrible reputation,” said Medford. “And it got a horrible reputation because vendors hyped its benefits. Consequently, users were disappointed. It’s better to focus on what a technology will do rather that what it won’t do.”

IBM is Intermec’s largest integrator, and Medford said Big Blue is convinced that the supply chain is the real market for RFID. He added that most big players in the chip world realized this as well. “I’m not just speaking for Intermec and its integrators,” Medford told us. “Most of the giant integrators and RFID chip makers understand where this technology works best … and that is in the supply chain.”

On July 15-16, the Auto-ID Center at MIT sponsored an EPC Network: CEO Summit in Boston. The forum enabled CEOs of giant RFID end user companies, technology vendors, and service providers to meet and discuss a variety of issues concerning item tracking. Among these issues were consumer privacy and the development of a global EPC network for identifying “any object, anywhere, automatically.” Hopefully, the group will settle on realistic goals that don’t hinder adoption.

For more information: Intermec Technologies Corporation, Everett, WA, PH (412) 348-2799, Email: kathie.anderson@intermec.com.

TI, Precision Dynamics, And ScenPro Helped Track Wounded Soldiers

During the war in Iraq, the U.S. Navy was able to more efficiently track wounded soldiers by using RFID technology. The tracking system, ScenPro’s Tactical Medical Coordination System (TacMedCS), allowed medical professionals to use RFID-enabled wristbands from Precision Dynamics Corporation (PDC) to identify patients, and to update their status, location and medical information in the system’s electronic whiteboard automatically. The RFID technology was provided by Texas Instruments’ RFid Systems.

The Navy implemented TacMedCS to replace a labor-intensive, entirely manual system consisting of pen and paper, cardboard tags, and a centrally located whiteboard to show patient movement throughout Fleet Hospital Three. Using a handheld RFID reader from A.C.C. Systems Inc., medical personnel were able to read unique identification numbers on the wristband tags and add or change data to create a digital treatment record that traveled with the patient as he or she moved throughout the facility. Using a wireless LAN, patient information was transferred to an electronic patient management system, further eliminating manual re-entering of data at a central computer terminal.

TI’s Marketing Manger Bill Allen told SCAN/DCR, “We were very pleased to play an important role in helping with the care of our soldiers. In a military hospital in the field, paperwork can get lost … wristbands can fade or smudge. RFID solved these problems and simplified the process of identifying, tracking, and documenting patients and their medical records.”

As Allen stated, PDC’s RFID-enabled wristbands played a key role in the U.S. Navy solution. The San Fernando, CA-based vendor is a pioneer in automatic identification technology for the healthcare industry, having introduced the first patient bar code ID wristband in 1984. PDC is the leading adopter of RFID for use in medical wristband identification and other hospital applications. In addition to its work with TI, PDC is collaborating with Zebra Technologies in other RFID hospital apps.

Deployed for combat casualty care in a hospital location, the Navy is also exploring the use of TacMedCS for medics in the field. The system can quickly identify injured soldiers and record the types of treatment they receive. Using the GPS capabilities of the reader, information can be communicated back to commanders to expedite care and improve resource deployment.

In the future, as the U.S. continually prepares for crisis scenarios, TacMedCS can be expanded as a logistics management tool to track First Responder equipment and personnel, and to improve record keeping. It fits seamlessly into command and control systems used in emergencies. RFID chips sewn into uniforms, or placed inside badges, and scanned at the scene of an event, will allow personnel to identify the individual responders on site and log fire, police, and emergency responders in and out of chemical or biological hot zones, for example.

“This is a great application,” said Allen, “but, for the RFID industry, the real significance of this project is that it shows what RFID can bring to the table. In the right application, RFID is a very useful technology that provides increased efficiencies and guaranteed ROIs. In this instance, RFID was a unique solution to a unique set of problems. We must find more applications like this.”

Continuing, Allen told us, “The RFID industry needs to get its act together. Vendors should cooperate with each other to grow the industry. One of the first things we need to do is to work with software vendors, such as Oracle and SAP. Most software vendors haven’t even begun to figure out how to integrate RFID into their enterprise packages and how to handle the vast amounts of data that could be collected through the use of RFID. An associate of mine did the math and determined that, if Wal-Mart incorporated RFID at the item level in all its stores, it would have to process more than 7.6 million terabytes of data per day. Retailers are not equipped to handle that much information in their back-end systems.

“Retail presents a whole new set of problems for RFID. One of these is consumer privacy. We can tell consumers that RFID tracking will reduce supply chain and inventory costs, and in turn, their costs at the shelf. But, if they are more concerned that their privacy will be violated, they still might not accept the technology. Consumers will ultimately have to decide if it’s a worthwhile trade-off. RFID use in retail is a long way off. In the meantime, while the RFID industry is working through these problems, we’ll all starve to death if we don’t find applications that work today.”

For more information: Precision Dynamics Corporation, San Fernando, CA,

PH (818) 897-1111, Email: danielh@pdcorp.com, Web site: www.pdcorp.com; ScenPro, Inc., Richardson, TX, PH (972) 437-5001, Web site: www.scenpro.com; Texas Instruments RFid Systems, Plano, TX, PH (214) 567-2511, Email: billallen@ti.com.

GM Paves Highway For AIDC Adoption

In 2000, General Motors (GM) was leading the way in global shipping label standards for the automotive industry. When the giant automaker introduced its GM1724 spec for a common shipping label, GM engaged the AIDC industry, and AIDC providers were quick to offer software and hardware that complied with the new label standard. Since then, GM has continued to build upon the spec and is making groundbreaking moves in RFID and RTLS standards.

When we caught up with GM’s Larry Graham, global manager, manufacturing technologies, global produce product, information systems, and services, he was more than happy to share his thoughts on emerging AIDC technologies and GM’s ongoing traceability and labeling initiatives. [Note: Graham is a former AIDC industry member and worked at Monarch Marking and Lowry Computer. He is also a recent inductee into the AIDC 100.]

“Our GM1724 spec became the model for the international standard for the automotive shipping label,” he told SCAN/DCR. “The AIAG (Automotive Industry Action Group), ODETTE (the AIAG’s European counterpart), and JAMA/JAPA (the AIAG’s Japanese counterpart) used the GM label design to create the B-16 Global Transport Label. This global standard was drafted in less than two years with only five face-to-face meetings. This is a tremendous accomplishment.”

Graham will host the automotive forum at Frontline’s International Supply Chain Week in Chicago, which runs from September 15-18. Among the major topics will be the use of RFID, RTLS, and Wi-Fi technologies for automotive manufacturing. “These are enabling technologies,” said Graham. “If the RFID industry could achieve a standard as good as Wi-Fi, it will have accomplished a tremendous feat. Wi-Fi has enabled the wireless industry to really take off.

“The automotive industry created the first, item-level standard for RFID,” he continued. “B-11 is an open ISO standard with a common data syntax useable by both RFID and 2-D symbols. Open standards are a must in the automotive industry. RFID will not be an easy technology to integrate. Tagging tires is a good example. We need as much help as possible with interoperability standards.”

When the AIAG was working on the B-11 standard, it wanted a read/write tag with a minimum read range of two feet. According to Graham, a tag manufacturer, working within the standard, achieved an actual read and write range of 10 feet—using U.S. power levels. “We were surprised and pleased with the way the [RFID] vendors addressed our challenges,” said Graham.

As with most end users, Graham believes the lack of education has hurt the RFID industry. He also believes the hype surrounding the technology sets it up for failure. “Some end user companies have been burnt with RFID,” he explained. “They were promised the moon, and the technology couldn’t deliver. Users must be given realistic expectations. GM is using RFID for Homeland Security purposes in transporting goods across the Canadian border. In this application, the benefits and returns justify the cost of the technology. This is important to users.”

In addition to 2-D and traditional RFID, GM has been making inroads with the RTLS (real-time locating systems) industry. “We were working with WhereNet, a leader in the RTLS industry,” said Graham. “The problem was that WhereNet’s technology was proprietary. We convinced WhereNet to put its technology in the public domain.”

GM does not limit its standards efforts to just the automotive industry. Graham said the company has taken an active role in working with INCITS (the International Committee for Information Technology Standards). In the past two years, INCITS has developed a standards draft for RTLS systems.

The DoD has adopted an ISO/ANSI-based method of identifying items using a GM concept termed “Clearwater.” Clearwater takes complex problems and reduces them to their most basic attributes. “If you want to make coffee, tea, or lemonade, what is the common element? … water, hence the term Clearwater,” Graham told SCAN/DCR. “For traceability, reliability, and warranty purposes, you need good data. Currently, we don’t always get the data we need.

“If we have to recall cars because of a particular problem, it is very costly. However, if we have the right information on the part, we could limit a recall to 50 vehicles rather than 1,000. Using the Clearwater concept, you need to address the “what” (the part number), the “who” (DUNS identification of the manufacturing site), and the “which” (lot, batch or serial number). You have a database on the part with information available throughout the life cycle.”

(Editor’s note: DUNS: Data Universal Number System, a 9-character company identifier assigned by Dun & Bradstreet to uniquely identify a business establishment.)

Clearly, GM has not rested on its past successes and practices continuous improvement for application of AIDC technologies. The message to the RFID industry—which should be heard loud and clear—is that users want standards (interchangeability and interoperability) and realistic product information … information that is free of hype.

“Take a lesson from IEEE 802.11b,a, and g wireless LAN standards and couple that with a Wi-Fi like certification process, and you will grow the market,” said Graham. “If we—the users—elect to utilize a feature provided by a manufacturer, then we made the decision  to become proprietary.

“Within the automotive industry, we have standardized on Code 39, Code 128, PDF 417, Data Matrix, and QR Code for specific applications. If we elect to use AIAG, ANSI and ISO standards, we have an open system, if not we have a closed system. At the very least, we can print and scan all these throughout the supply chain thanks to open standards.”

Contact information withheld by request.

Savi And Matrics Join Forces … And Technologies

Savi Technology and Matrics Inc. are pooling their resources to create a passive/active RFID security and tracking system.

Savi Technology has been a prominent player in the development of Homeland Security solutions for the shipping industry. It has been involved in a number of government initiatives and has developed a hardware and software package for securing cargo containers used in the air, on the ground, and at sea. Now, it wants to take security to the next level. Enter Matrics Inc.

Much of Savi’s offering for Homeland Security is based on active tags—tags with batteries. These tags have long read ranges and are perfect for securing large containers. But what about the items in the containers? Savi’s tags can alert the proper authorities if a container has been tampered with. But, they can’t give information on what may have been taken from a container. So, they need passive tags for the item level.

Matrics is a pioneer in the development of low-cost, read/write, passive tags. Using Matrics’ EPC-compliant technology to track and record items as they are loaded onto a pallet and into a cargo container, would enable shipping personnel to determine what was stolen in the event of a break-in. Savi and Matrics hope to develop a secure tracking system that marries passive and active RFID tag technology.

To accomplish this task will require a dual reader that is capable of reading both technologies and frequencies. Matrics’ UHF tags operate within EPC-compliant frequencies, while Savi’s tags and electronic seals function in the 433 MHz frequency. Information gathered by the multi-frequency readers, such as product IDs, destinations, and container numbers, will be routed to Savi’s Asset Management and Security software platform.

The problem is, many vendors and users believe RFID technology is still too expensive for item tagging. There also are consumer privacy issues to deal with. So, when we spoke with Savi CTO Ravi Rajapakse, we asked him why Savi was interested in adding RFID at the item level.

“Shippers want to know where goods are and if they are secure,” said Rajapakse. “With the right technologies, we can provide that information. But, we are also talking about improving tracking outside the middle of the supply chain. This means tracking items during manufacturing and after they leave the shipping containers.

“When we talk about item tracking, it’s not a black-and-white situation. It doesn’t mean we want to track all items—only high-value items, such as televisions, stereos, and disk drives. Eventually, as the technology improves, we may look at tracking less expensive items. We’re not sure how far down we’ll go with regard to item tracking.”

The ultimate goal of the Savi/Matrics partnership is to develop an “intelligent automatic system (IAS)” with “nested” visibility. Nested means items are nested in cartons, cartons are nested on pallets, and pallets are nested in cargo containers. An IAS would allow authorized users to track and locate specific items in the supply chain—and presumably before and after the supply chain. “When a shipment reaches a port, it is de-nested as it is unloaded and unpacked,” said Rajapakse. “When the shipment reaches a particular warehouse, it is re-nested.”

Matrics Vice President, Corporate Development, John Shoemaker told SCAN/DCR, “This project is all about providing safe global commerce … safety for air and maritime cargo, safety in harbors and shipping lanes. We call this ‘smart secure shipping.’ By combining RFID technologies and frequencies, we can automatically record data on large items that are loaded into a shipping container and transfer that data from a passive UHF tag to a 433 MHz active tag. All transmissions of data will occur on a wireless network.”

Shipping companies operate under strict guidelines. Shoemaker said these companies must notify a sea port or airport ahead of time when they are bringing in cargo. They must provide detailed manifests that describe exactly what is in the cargo containers and ULDs (unit load devices). An IAS would help shipping companies create and manage these manifests. “The intent is to provide a complete solution,” said Shoemaker. “In addition to airports and harbors, our system will be used to monitor shipments at border crossings, truck terminals, and railheads.”

The Savi Asset Management and Transportation Security System is probably the most elaborate and well-known software package in the RFID industry. Rajapakse said the next step for RFID players is to determine how to integrate captured information into ERP (enterprise resource planning) software packages from the likes of Oracle and SAP.

“The information captured in the supply chain must be adapted to a business format,” he told SCAN/DCR. “Minute-by-minute, real-time micro information must be transformed into macro information that can be accepted by ERP systems. Savi does this routinely, but that is because we used our years of experience when we developed our software. Everybody must make this a priority.”

Because much of their joint press release mentioned the AutoID Center and its EPC spec, we asked the men for their views on the development of item-level standards and the Center in general. Both men and their companies support the Center and its work. They also support the EPC spec.

If there was any complaint, it would probably be the hype the Center has created around the concept of a 5-cent tag. “Although we have supported the Center in the past and will continue to do so in the future, we believe all the talk about a 5-cent tag is hurting the RFID industry,” said Shoemaker. “Potential customers are waiting for tags prices to drop to five cents, instead of looking at applications that make sense. RFID vendors should be looking at solutions, applications, interface and connectivity issues. We should try to solve the disconnect between standards bodies. It’s time to quit focusing on the tags.

“Matrics is making good headway in apps for baggage handling, air cargo, tracking animals, pharmaceuticals, and for the federal government. We believe the UCC (Uniform Code Council) and EAN will do well with picking up where the AutoID Center left off. And, we will continue to support the Center with its research efforts.”

Savi Marketing Communication Manager Mark Nelson told SCAN/DCR, “With respect to the AutoID Center, we’re glad to see that standards bodies now have taken over commercialization of EPC, while the AutoID Lab, will focus on research. It’s critical to make sure that EPC’s passive RFID can communicate across borders and various automatic identification technologies to maximize the potential benefits of these technologies. This includes nested visibility between passive and active RFID, which will soon be provided by Savi and Matrics. The AutoID Center helped put RFID on the map, and now it’s up to the industry to continue to help educate potential users on what technologies work best in different applications.”

For more information: Matrics Inc., Columbia, MD, PH (410) 872-0300,

Email: lchurchill@matrics.com; Savi Technology, Sunnyvale, CA, PH (408) 743-8866,

Email: mnelson@savi.com.

Boeing And Airbus Initiate RFID “Pilot” Program

Airlines have always been skeptical of any RF technologies to be used on planes. Well, Boeing and Airbus, the two leading manufacturers of commercial aircraft, have set out to prove that RFID poses no safety threats to air transportation. And, with a little help from FedEx, the companies will prove their findings during the fourth quarter of this year.

Ken Porad, Boeing’s program manager of permanent bar code identification of parts on commercial planes—and former Percival Award winner—filled us in on the RFID program, which will be formally announced at Frontline’s International Supply Chain Week in Chicago (Sept. 15-18). The ATA (Air Transport Association) AIDC Task Force (formerly the Bar Code Task Force) is now working on an RFID part marking standard to mirror its efforts on Spec 2000 bar coding.

“Boeing is doing its own lab testing,” Porad told SCAN/DCR. “We intend to prove it won’t compromise safety on commercial planes. Although Boeing and Airbus are competitors, we believe the benefits of this initiative make it worth setting aside our competitive differences. RFID allows us to store information and overwrite it as many times as necessary. A global RFID marking standard will benefit the entire worldwide airline industry. Every supplier will be using the same marking standard.”

It is easy to see why both of these giant manufacturers have pooled their efforts. More than 70% of their suppliers are common to both companies. Inconsistent standards would only cost the two companies more money.

Porad will formally introduce the new program on September 15, during the RFID Summit roundtable discussion at Frontline. If the lab tests go as well as expected, FedEx will allow one of its package freighters to be tagged throughout all zones of the aircraft, including the flight deck, the cabin, the electronic equipment bay, and the wheel wells. In a 90-day trial, FedEx will fly the tagged jet as a proof of concept for the RFID pilot program.

Boeing, Airbus, and the ATA are using 13.56 MHz, read/write tags in the test. The tags comply with ISO 15693 and offer one kilobyte of memory. “13.56 MHz is a good global frequency,” said Porad, who is clearly excited about the new program. “We’ve already had early successes and are able to achieve a one-foot read range. Our plan is to create a road map to transition our part marking to RFID. Of course, we will be using both bar code and RFID technologies simultaneously for quite a while.”

Boeing’s electromagnetics effects engineering group, located in Seattle, is doing much of the jet manufacturer’s internal testing. “Our engineers have found that passive tags really don’t pose a problem,” said Porad. “It’s the reader that emits a signal and radiates the tags. We will present our findings to the FAA (Federal Aviation Administration) and the JAA (Joint Aviation Authorities) in a position paper to avoid performing a failure mode and effects analysis."

At this point in the program, the partners are still in the learning mode. “RFID may pose a challenge,” said Porad. “There’s an awful lot of metal in a plane that could potentially interfere with the technology. We also want to make sure everything we do is within the realm of open systems and architectures. Our goal is to publish the results of our findings in the form or a ‘Requirements Document’ in the first quarter of 2004. If RFID works as well as we expect, it could revolutionize how we mark and track parts for commercial aircraft.”

Closing, Porad said that no RFID vendor has been chosen nor excluded from supplying tags in the future.

Comment: We view this end user initiative as a tremendous step for the RFID industry. And, it serves as a sign that users are willing to try the technology, as well as participate in standards development. Porad’s ongoing efforts show why he was a truly deserving recipient of the Percival Award—an award that honors an end user for the promotion of AIDC technologies.

For more information: Boeing Company, Seattle, WA, PH (206) 662-6160,

Email: kenneth.d.porad@boeing.com; Airbus, Toulouse, France.

RTLS—New Standards To Drive Strong Growth

Giant end users—particularly in the aerospace and automotive industries—have been showing strong interest in real-time locating system (RTLS) technology. But, a lack of standards has impeded adoption … that is until now. Working with RTLS leader WhereNet Corp. and other RTLS players, the International Committee for Information Technology Standards (INCITS) recently completed a new standard that will facilitate broad international adoption and integration of wireless location systems by Global 2000 companies.

INCITS is accredited by and operates under rules approved by the American National Standards Institute (ANSI). The new standard, developed and adopted by the INCITS T20 committee, defines two air interface protocols and an application programming interface (API). End users, government entities, and RTLS vendors collaborated on the new standard, which was completed in just 18 months.

As is often the case, the new standard was the result of pressure from the end user community. “The big automakers tried our technology and really liked the benefits it provided,” said Tim Harrington, WhereNet vice president of product strategies. “But, they were not willing to proceed with the adoption of any proprietary technology. With most of the Fortune 50 companies we target, corporate policy dictates that technology purchases must be non-proprietary.” [See SCAN/DCR 8/15/03.]

The goal of the T20 standard committee was to settle on a small number of air interface protocols. “The big users told us they didn’t want to adopt a technology and find out later that it wouldn’t work with other RTLS or RFID products,” Harrington told SCAN/DCR. “That’s why we limited the spec to two air interface protocols and one API.”

The WhereNet system is a hybrid technology offering that combines active RFID and wireless LAN technologies. “RTLS is like RFID on steroids,” said Harrington. “It’s not just about product identification; it’s about product location as well. We can monitor the movements of items in real time. These items can be products going through the manufacturing process or company assets, such as tools and equipment.”

Harrington went on to say there are technologies similar to that of WhereNet’s but no exact duplicates. Several years ago, PinPoint was a major challenger to WhereNet, but the company went bankrupt. Its technology was purchased by RF Technologies. RF Code is another major player with its active-tag “Spider” technology. But, although the list of RTLS vendors is small at this point, things could change in a hurry.

International Paper just announced that its in-house IT and engineering teams have developed a new warehouse tracking system (WTS) and are using passive tags and readers purchased from Matrics, Inc. to track their products. [Look for a story in the next issue of SCAN/DCR.] Matrics and Savi Technology also have announced a joint venture to combine passive and active RFID technologies for real time tracking and location. [See SCAN/DCR 8/15/03.] Neither of these systems have the same capabilities as the WhereNet RTLS, but they are coming closer to infringing on WhereNet’s territory.

SCAN/DCR asked Harrington if he was worried that the market may become over-crowded. “The Savi/Matrics system can provide similar benefits, but there will always be a significant difference,” said Harrington. “WhereNet’s information is always stored at the database level. We record information about a product, pallet, or asset and store it in a central database. The active tag we attach to the item is simply a tracking device that is assigned to the item we are monitoring. The tag always refers back to information in the central database.

“With passive/active RFID systems, information about an item is stored on the tag itself. So, you essentially have two sources of information: the passive tag and the active tag. Information from a passive tag is read by one reader and then recorded on an active tag which is read by a separate reader. It is a point system, not a database system.”

So, how will the new standard affect RTLS sales growth? Harrington would not give us any hard numbers, but he did say that he expects to see a “very positive affect on adoption rates” [in other words, sales]. “Big users will drive adoption,” said Harrington. “We have already designed the standard changes into our products and user have shown a willingness to invest. If the giant users begin to adopt RTLS at a rapid pace, the cost of our systems will come down, making them affordable to tier-two companies. We have seen interest from tier-two companies, but to date, our products simply have been too expensive.

“Standards increase adoption. Increased adoption means more sales volume. Higher volumes mean costs come down, which in turn means more sales volume. The ROI on this technology is very clear, and we believe we could see major sales growth within the next two years.”

Comment: This is a technology to watch. We believe the technology has already proven itself and new standards should remove most barriers to adoption.

We also believe it is inevitable that, at some point, traditional RFID, used in the supply chain, will be connected to RTLS systems in warehouses and manufacturing environments.

For more information: WhereNet Corp., Santa Clara, CA, PH (408) 845-8500,

in Europe PH +32 15 28 48 00, Web site: www.wherenet.com.

International Paper Develops RFID Warehouse Tracking System

In a slightly unusual twist, a giant end user—International Paper (IP)—has developed its own RFID-enabled warehouse tracking system (WTS). And, it may one day be marketing the WTS to its customers. IP believes it can use its expertise in RFID integration to help its clients improve their tracking systems and operations.

The new tracking system uses EPC™-compliant RFID readers—provided by Matrics Inc.—that are mounted to forklifts. Tags for the system, also provided by Matrics, are non-proprietary and EPC™-compliant. “We believe Matrics has the best performing tag on the market,” IP Marketing Manager Guillermo Gutierrez told SCAN/DCR.  “We are able to read 100% of tags placed inside our jumbo paper rolls.”

The entire tracking system was developed on site by IP engineers and IT staff members at IP’s Texarkana, TX, bleached board mill and warehouse. “It was critical that we designed the system with input from employees who actually handle operational functions,” said Gutierrez. “Our integration and design team spent many hours listening to what our warehouse employees needed. The result was that we have a system that will allow us to monitor inventory and track items to within six inches of their exact location. Information gathered from tags is passed on to forklift operators in less than a second.”

The new IP tracking system is a fully functional warehouse solution that covers all stocking, storage, movement, and shipping within the facility.  It provides inventory certainty to eliminate lost product, reduce operating costs, and decrease inventory. The system provides real-time inventory routing instructions and movement confirmation to forklift operators without the need for manual interaction.

Because the WTS uses the MIT Auto-ID Center’s EPC standards, it ensures compatibility throughout the supply chain. Matrics Chairman and CEO Piyush Sodha told SCAN/DCR, “This is the most state-of-the-art RFID tracking system I have ever seen. In addition to identification, the system even offers benefits traditionally found in RTLS (real time locating systems). And, it was done with inexpensive passive tags. It will revolutionize the way companies benchmark operational efficiencies.”

The WTS can be integrated to roll stock and pallet/case applications and is configurable to a broad range of internal and external warehouse operations. The system is designed to withstand the harsh industrial environments associated with a 24-hour mill operation and includes a self-diagnostic application.

According to Gutierrez, the system was implemented in the Texarkana plant in about six months after pilot testing. “IP has long been a proponent of RFID technology,” said Gutierrez. “It was one of the first members of the MIT Auto-ID Center and, since 1999, has worked constantly on new ways to use the technology. We are now looking beyond the warehouse for new RFID applications.”

IP has operations in 40 countries and sells it products in more than 120 nations. We asked Gutierrez if there were plans to implement the RFID WTS in other IP locations. “We are currently evaluating ways to take the system to other facilities,” Gutierrez answered. “The [production] processes change as you move down the line in our structure. We have to evaluate ways to best use our system in other environments. With the way we have designed our system, and the use of non-proprietary, EPC-compliant tags, we should be able to jump into supply chain tracking fairly easily.”

Next, we asked Gutierrez what benefits seem to be most prevalent from the use of RFID. “Some of the benefits are obvious,” he said. “How do you manage a warehouse if you don’t know where things are? The decision to pursue RFID tracking was based on a detailed financial case. The return on investment is similar to that of bar codes.

“RFID gives us the tools we need to provide value to our customers, and that really has been more important than any cost reduction we have experienced. Now, when customers want to know were their products are, we can quickly and accurately give them the information they are looking for.”

Perhaps the most surprising aspect of this story is that IP may market the new WTS system to its customers. “Through the development and implementation of this RFID tracking system, we believe we have obtained a great amount of expertise with the technology and its integration,” said Gutierrez. “We can help our customers roll out an RFID system, show them how to stay within EPC standards, and tell them how to use RFID outside the warehouse in case and pallet tracking. Of course we will get paid for these services, but the main point is that this RFID application is real, it’s here today, and it works.”

“The main thing about this story is that it defines a true, real-world implementation,” said Matrics’ Sodha. “That is not usually the case. This system is being used everyday and will serve as a giant testimonial for both Matrics and the RFID industry. Interested businesses can see that this system works.”

Sodha was not at liberty to discuss the size of the order and Gutierrez would not give us those details either. Sodha did say that implementations such as this one would help speed up RFID adoption. “With the current Wal-Mart initiatives going on in RFID [see SCAN/DCR 6/27/03], and announcements such as this, I believe we could see major use of RFID at the pallet and case level in two to three years,” said Sodha. “Item tracking could become prevalent in seven to 10 years.”

Comment: We view this announcement as an important milestone for the RFID industry. It shows commitment to the technology from a major end user.  And, it is very interesting that this particular user may resell the RFID WTS it developed.

The fact that IP is willing to share the system with its customers shows that IP is happy with its system and confident it will perform well going forward. It would not jeopardize customer relations by selling a system that did not work properly. And that says a lot.

For more information: International Paper, Memphis, TN, PH (901) 419-4719,

Email: Guillermo.Gutierrez@ipaper.com; Matrics Inc., Columbia, MD, PH (410) 872-0300, Email: lchurchill@matrics.com.

EPCglobal, Inc. Launched In Joint UCC/EAN Initiative

A joint venture between the Uniform Code Council (UCC) and EAN is now official. On September 10, the two global leaders in standards and the drive for business efficiency, signed a formal agreement to create EPCglobal, Inc. EPCglobal will aid in the commercialization of the EPC (electronic product code) Network for RFID technology. The EPC Network was the brainchild of the MIT Auto-ID Center. Through the use of EPC-compliant RFID tags and readers, end users will be able to link items to an open and accessible network, enabling real-time identification and sharing of information.

In a special SCAN/DCR interview, UCC Chief Operating Officer Mike Di Yeso told us, “Back in May, we signed a licensing agreement with the Auto-ID Center to commercialize the technology it had developed. Originally, we were going forward under the name AutoID Inc. However, through discussions with our partners at EAN, we jointly decided to use the name EPCglobal, Inc. instead. On Wednesday [Sept. 10], we signed an agreement to create the new entity.

“We wanted to capitalize on the popularity and success of the EPC branding,” he continued. “Global shows it’s for everybody. Now, we need the help of as many players as possible—including, end users, integrators, RFID vendors, and industry publications—to make this venture a success. We welcome any feedback, support, or input that will speed up the commercialization process.”

EPCglobal will try to incorporate other standards efforts as well as those of the Auto-ID Center. “We hope to leverage the work done on GTAG,” said Di Yeso. “And, we absolutely want help from other standards bodies, such as ISO and ANSI.”

Since a quick commercialization of RFID technology is an ultimate goal for the new organization, EPCglobal will focus on areas that provide the most payback. It has created an “Implementation Task Force” to help develop open and neutral processes. “We have to concentrate on areas that provide the greatest business argument,” Di Yeso explained. “These include case-and-pallet tracking in the supply chain and container movement. We know these markets will show a quick ROI.”

The supply chain and container movement business sectors are familiar ground for the UCC and EAN. More than one million companies in 140 countries currently take advantage of UCC/EAN standards and technologies. The UCC operates two wholly owned subsidiaries, UCCnet and RosettaNet, and it co-manages its global EAN/UCC System with EAN International. UCC-based solutions include business processes, XML standards, EDI transaction sets, and the bar code identification standards of the EAN/UCC system.

The UCC also manages the United Nations Standard Products and Services Code (UNSPSC®) for the United Nations Development Program (UNDP). Given its history in the development of bar code standard codes, the UCC/EAN alliance seems like a natural choice to help commercialize RFID and the EPC Network.

A charter member of the AutoID Center, the UCC has been intimately involved in the Center’s workings since 1999. Last spring, the UCC and the Center began discussions to allow the UCC and EAN to take over the commercialization process for the technology developed at MIT. One of the first areas of concern for the UCC was RFID intellectual property rights. Through its due diligence efforts, the UCC has narrowed the list of RFID patents down to 5,000 that must be addressed.

The second area of concern was to make sure that, going forward, all new efforts would be in the development of open and neutral standards and processes. The creation of the Implementation Task Force was the result of this focus. And, in August, the UCC and EAN opened subscriptions to the EPC Network to all their trading partners.

A special organization, EPCglobal U.S., will work hand-in-hand with EPCglobal to encourage RFID adoption. EPCglobal U.S. President Dicki Lulay told SCAN/DCR, “We are going to help in areas such as education and training. In addition, we are going to solicit the help of Auto-ID Center members to help us spread our message.”

“The UCC is really going to try to make sure our message is clear and accurate,” Di Yeso added. “We want to keep it straight and simple. With respect to SCAN: The DATA CAPTURE Report, there are two main points we want to take to readers. First, if EPCglobal is to succeed, it is absolutely critical to have involvement from all sectors. This includes leaders in government, healthcare, pharmaceutical, retail, and other niche markets. We also need input from RFID and other technical vendors.

“The second message is that now is the time to get involved. MIT members have made commitments already, so don’t wait until next year to join our efforts. There will be a place for everybody.”

Analyst firms predict that near-term deployments of RFID technologies on pallets and cases—in warehouses and distribution centers in the supply chain—have the potential to save companies billions of dollars. These implementations will allow user companies to capture supply chain information with greater accuracy, detail, and real-time visibility. This will lead to more informed decisions and improvements in common business processes. It will also increase sales for RFID vendors that have waited patiently for years for this market to materialize.

For more information: Uniform Code Council, Lawrenceville, NJ, PH (609) 620-4526,

FX (609) 620-1200, Web site: www.uc-council.org.

New Zebra Smart Label Printer Cuts Costs 30%

At the EPC™ Symposium in Chicago, Zebra Technologies announced that, in 2004, it will release a new printer, which has been dubbed “R110Alchemy.” The printer will enable users to create on-demand, print-and-apply, RFID-encoded smart labels. And according to Zebra VP of Technology Development, Clive Hohberger, PhD, the new product could reduce smart label costs by 30% or more.

Pre-converted labels—labels which have RFID transponder inlays added before the printing process begins—are a major cost inhibitor to RFID smart label adoption. The conversion process alone can account for 35% to 45% of the total smart label cost. And, this is in addition to the cost of the inlay and label materials. By removing 30% of smart label costs, Zebra drastically reduces barriers to RFID adoption.

 What’s really nice about the new printing system is that it is modular and allows users to hang on to existing equipment. First, Zebra’s R110PAX add-on print engine allows a normal bar code printer to be converted to an on-demand, print-and-apply label printer. Then, taking things a step further, the Alchemy module enables users to apply on-demand, self-adhesive RFID transponder inlays. All of this can be achieved utilizing the user’s existing label stock.

“We are the only one that has a system like this,” Hohberger told SCAN/DCR. “Two years ago, we filed for six patents relating to this product. At this point, things look very favorable, and we expect to have our patents granted soon.”

“The new Alchemy product will enable us to create market demand for smart labels,” added Chris Hook, who recently joined Zebra as director of RFID market development. “Much of the current demand for smart labels centers on retail and supply chain applications. But, this same smart label technology we have developed for these markets will work equally well in parcel delivery applications. When you examine their operations closely, you find that companies such as FedEx and UPS have needs similar to those in the supply chain and retail.”

Most industry players realize that Wal-Mart is leading the charge for RFID adoption. It recently told its top 100 suppliers to institute RFID tracking at the pallet and case level by 2005. Hohberger and Hook told us that Zebra and Sato have thousands of printers already in place in Wal-Mart’s supply chain. “These existing units could quickly and easily be converted to RFID, on-demand, smart label printers and encoders.”

One of the obvious benefits of the new printing, encoding, and application system is that one system and one central controller can generate both smart labels and standard bar code labels for immediate application. “You don’t have to switch stock during the printing process,” said Hohberger. “You can be printing smart labels for Wal-Mart and immediately begin printing non-RFID standard bar code labels for another company. It will be a tremendous time saver. We’ve shown the new Alchemy product to about 60 companies, so far. The reaction has been very positive.”

In addition to its other features, the Alchemy printing system offers automatic verification. If a transponder is not verified at the point of programming or encoding, the transponder is thrown out before it is applied and bonded to the label stock. “You virtually never get a bad label,” said Hohberger. “This is really an enabling system.”

Zebra will continue to focus on the supply chain—cases and pallets—where RFID simply makes sense. “You don’t want to put a 60-cent label on something that only needs a two-cent bar code,” said Hohberger. “That’s not rocket science. At the pallet and case level, there is a strong business case for using RFID, and that’s where vendors should focus their efforts.”

Since Hohberger threw out the 60-cent figure, we asked him if that was a fairly accurate number for the cost of a smart label. “My best estimate is that smart labels will run between 50 cents and 60 cents in 2004.”

To those who are still trying to push item tracking, Hohberger stated, “Item level tracking is a long way off. Even a print-and-apply bar code label runs between two cents and five cents. The silicon alone for an item-level tag would run almost five cents, and that doesn’t include an antenna, the packaging and application, and a profit. If that weren’t enough, major retailers are very leery of privacy issues surrounding item tagging.

“When it comes to larger items, the picture changes. Items such as televisions, stereos, DVD players, and appliances have, in essence, their own cases. It may make perfect sense to apply smart labels to high-priced items such as those I’ve mentioned.”

We couldn’t help but notice that Hohberger’s philosophy seemed to be an exact duplicate of what was being said about RFID four to six years ago. At the time, most industry pundits were saying that RFID made sense at the pallet level or for high-dollar items. There was talk of using RFID tags to capture information such as a purchase date that could be used for warranty claims. Some even talked about using the tags to record what warranty work had been performed. But, nobody was suggesting that every item in a store be tagged.

When we pointed this out to Hohberger, he simply laughed and said, “The laws of physics haven’t changed in the last five years. We are all working on new technologies, but for now, we have to use what we have. And yes, this is exactly what we were saying five years ago.”

According to current estimates, there are between eight billion and nine billion cases traveling through the supply chain every year. Wal-Mart drives 43% of the U.S. retail business and is responsible for approximately 17% of all world sales. In turn, that means that approximately 17% of Procter&Gamble’s sales are to Wal-Mart, 17% of Gillette’s are to Wal-Mart, and so on. The point is that Wal-Mart and its suppliers account for a huge portion of the cases and pallets that find their way through the supply chain each year.

“Wal-Mart is not our customer, per se,” said Hohberger. “It’s the Wal-Mart suppliers who we see on our customer list, and that’s who we are trying to help. But, if Wal-Mart makes a decision to do something, all other retailers are watching. Wal-Mart competitors, such as Target and Kmart, can’t afford to lose market share to Wal-Mart, so they will often follow suit with technology adoption.”

“It’s often easier for them [Wal-Mart competitors] to jump into a technology [after Wal-Mart],” Hook added. “Target and Wal-Mart may share many of the same suppliers, so Wal-Mart already has the suppliers set up in a technology by the time its competitors decide to move forward with a technology adoption.”

Zebra is currently looking for willing field-test partners. Its new technology is sure to play an important role in RFID adoption and future supply chain tracking systems. We view this as a giant step forward in the RFID hardware sector.

For more information: Zebra Technologies Corporation, Vernon Hills, IL, PH (847) 634-6700,

FX (847) 913-8766, Email: CHook@zebra.com.

How Will New SAMSys Patent Affect Your Business?

The U.S. Patent Office recently granted a patent [#6,617,962] titled “A System for Multi Standard RFID Tags” to SAMSys Technologies Inc. The big question is how will the patent affect AIDC vendors that are working on multi-frequency or multi-protocol readers? There could be some licensing fees to be paid.

According to SAMSys Chairman and CEO Cliff Horwitz, the patent approval has been a long time coming. “We filed for this patent three years ago,” Horwitz told SCAN/DCR. “We were told that it took so long because the Patent Office did an exhaustive search. Because of this, we are confident that we explained our patent very thoroughly. If we hadn’t, they wouldn’t have had so much to look at.

“The patent is about a concept, architecture, and philosophy for handling physical and practical realities associated with reading RFID tags. On the physical side, it covers multi-frequency scanning. On the practical side, it covers multi-protocol reading. At the time we submitted this concept, most RFID vendors were offering and promoting proprietary systems.”

Our next question for Horwitz seemed natural; so, are you going to try to collect license fees from other companies who are developing or now offering RFID readers that fall into the category multi-frequency/multi-protocol? Actually, we said the patent sounded rather all-encompassing much like the Lemelson patents.

Horwitz obviously did not want to be compared to Lemelson and pointed out some differences. “For one, this is not a loosely worded patent,” said Horwitz. “As I said earlier, this patent was very specific and covered a lot of areas.

“Second, the RFID industry is fairly well-established with respect to vendors. RFID is not just some new idea, and SAMSys is not a ‘Johnny Come Lately.’ We’ve been around for many years and proposed the concept of a universal reader before anybody else.” His point is that Lemelson simply filed a patent for the concept of bar coding, did nothing with the patent for years, and only asked for royalties after many other companies spent years developing and marketing bar code technologies. And the Lemelson scenario is nothing like that of SAMSys.

The new patent creates a bit of a dilemma for Horwitz. For the industry to grow, barriers to adoption must be removed. If SAMSys forces the issue with respect to its patent rights, it could set the industry back a little, particularly with vendors who design and manufacture RFID readers. On the other hand, SAMSys does have a right to protect its intellectual properties.

“First and foremost, SAMSys is a hardware company,” Horwitz told us. “But, that does not mean we won’t protect our intellectual properties. We are entitled to enjoy some benefits from our patented technologies. IP issues are a natural part of the AIDC industry. Look at companies such as Symbol and Intermec; they fiercely protect their patents and make tens of millions of dollars each year in licensing fees.

“SAMSys not only has a right to assert its patents, it has an obligation. We have shareholders who expect a return on investments they made to help us develop and patent our technologies. Those who are offering multi-frequency/multi-protocol readers have two choices—either stop the infringement or pay us royalty fees. We hope we will attract relationships with OEMs”

In addition to the legal benefits from the patent approval, Horwitz believes SAMSys will gain a marketing edge in the market. “This patent implies that SAMSys is ahead of the game when it comes to multi-frequency/multi-protocol readers” he stated. “We have made historical investments in time and money, and we were the first vendor to do so. I believe this gives us a lead position in the market.”

The new patent represents the third patent granted to SAMSys. The other patents are titled “A Tag Evaluation Module for Radio Frequency Identification Systems” and “Method and System for Tracking Clustered Items.”

“We do not want to retard [RFID] industry growth,” said Horwitz. “Quite the opposite, we want to help the industry reach its full potential. We believe multi-frequency/multi-protocol readers will help. These readers will enable users to adopt a plurality of technologies. End users can migrate from one technology to another.

“We just announced an alliance with RF Code, a well-known vendor of active RFID technology. The intent of the partnership is to merge active and passive RFID technologies. As I said, our readers will enable users to adopt a number of technologies, instead of being tied to one proprietary product. We will have to walk a fine line when it comes to our patented properties. But, just because we ask for a piece of a company’s profits to pay for our patented technology, does not mean the industry cannot grow.”

For more information: SAMSys Technologies Inc., Toronto, ONT, CAN, PH (905) 707-0404, Ext. 230, Email: cliff.horwitz@samsys.com.

Editorial

RFID—Truth Or Consequences

by Rick Morgan

One of my favorite classic movies is “Cool Hand Luke,” starring Paul Newman. In the movie, which is about a convict who refuses to kowtow to the rules of the prison boss, the warden utters, “What we have here is a failure to communicate.” I think those hallowed words apply quite nicely to the current situation in the RFID industry.

In our cover story, we spoke with leaders at the Uniform Code Council (UCC), who along with EAN, have formed EPCglobal, Inc. to promote and commercialize the EPC Network and other work done by the MIT Auto-ID Center. For the record, I think the UCC and EAN are the most likely candidates to handle the task.

One of the top two initiatives for the new entity, identified by UCC COO Mike Di Yeso, is to enlist the help and support of users, vendors, and standards bodies. And we believe this is an important goal ... if not the most important goal. But, to benefit from the input of all these parties, everybody must be able to speak freely without fear of retribution.

The Auto-ID Center has accomplished some great things and could continue to provide useful information to EPCglobal as it moves forward with the commercialization process. But, along the way, the Center has done some things, that in my opinion, have hurt the industry.

Over and over again, I have seen stories in major media publications claiming that the end of the road for bar codes is here. And then, there’s the never-ending hype about 5-cent tags. In all those stories, I never read one that didn’t list the Auto-ID Center as the source.

The original concept of the Center, at least as I understood it, was great. Major potential end users of RFID, along with RFID vendors and, of course, the Uniform Code Council, were all going to band together and fund a research project with the goal of finding new ways to improve on RFID production processes and ways to make the technology more suitable for the needs of the users who were helping fund the project.

The flaw throughout the whole process has been that vendors were unable to express their true feelings for fear of appearing uncooperative to user members. And without truth, you don’t get an accurate picture of what is actually going on. As the media kept focusing on the elusive 5-cent tag, RFID vendors who were trying to market their products were stone-walled.

I envisioned that, while the Auto-ID Center was doing its research on cheaper ways to produce tags, RFID vendors would begin to integrate the technology in applications where current tag costs—between 25 cents and 75 cents—were justified. Although some implementation has occurred, in many cases, potential users claimed they were going to put off adoption because they were waiting for the 5-cent tag they read about.

Vendors were angry, and behind the scenes, many began to view the Center as a giant thorn in their collective sides. These vendors, unlike the scholars at the Center, had to show a profit. No one involved in the research at MIT, Cambridge, or Adelaide had to go in to a boss at the end of the day and say, “I made money.”

The second goal of the new EPCglobal organization, is to look at possible intellectual property issues. Ironically, this was another area of complaint for RFID vendors. No one at the Center seemed to give a hoot about whose patents they may be violating. So, I’d say that making this another priority for EPCglobal is a wise move.

As I hinted earlier, the big problem all along, since the inception of the Center, has really been that vendors have been afraid to speak up about their concerns. They were afraid of making the end user members mad. No one wanted—or dared—to publicly say anything negative about the Center.

My point in all this is not to dismiss the fine work done by the Auto-ID Center. What I really want to say is that, without open and honest feedback from all parties, there will be consequences. EPCglobal’s efforts to move forward will be hampered by confusion in the market, unvented antagonism by vendors, patent disputes, and anger between standards bodies. Vendors are genuinely concerned about meeting user needs, but users must have realistic requests. This means both in technology and the time it’s going to take to develop it and take it to market. We must eliminate the failure to communicate and let truth prevail.

Robert W. Baird & Co. Shares RFID Insights

One of SCAN/DCR’s great resources is analyst firm Robert W. Baird & Co. (RWB) Recently, our main contact there, Reik Read, sent us these notes on RFID. We thought our readers would find them both interesting and insightful.

* While Wal-Mart has strongly urged its top 100 customers to adopt RFID technology, we understand that the next 100 customers are also rapidly looking for ways to deploy the technology. Their rationale—if they can develop a suitable RFID system before January of 2005, perhaps they can gain incremental business and crack Wal-Mart's top 100.

* DHL, which has been running an RFID pilot since 1998 with Nokia, is planning to equip all of its logistic centers with RFID by the end of 2004. The $50 million implementation is intended to track packages from pick-up to delivery. DHL noted the solid capacity increases as a key driver in adopting RFID technology. DHL will receive its tags from Philips and expects to tag 1.5 billion parcels annually. At those volumes, DHL expects its maximum cost per tag to be $0.20.

* RSA Security has devised a method to alleviate privacy concerns with respect to RFID tagging of commercial items. Privacy advocates, such as Consumers Against Supermarket Privacy Invasion and Numbering (CASPIAN) have raised an objection that companies or the government could invade personnel privacy by tracking RFID tags on items, primarily clothing, after an individual leaves the store. Recall, Benetton shelved its RFID pilot after these concerns were raised. RSA has developed an inexpensive method of adding a "blocker-tag" to commercial items. The concept is to activate the blocker-tag at the point of purchase. The blocker tag continuously sends out an RFID signal, and since RFID readers can't read more than one tag at a time, the blocker-tag essentially "blocks" the signal of the original tag by causing signal collision, thus not allowing a reader to decipher its contents.

We understand that acting under secretary of defense (Acquisition, Technology and Logistics), Michael Wynne has sent a memo within the military  outlining a requirement for the Department of Defense’s (DoD’s) top suppliers to use RFID on all shipments by January 2005. This memo is part of the  DoD Unique Identification (UID) program, where the DoD seeks to improve asset visibility at specific locations and within the military supply chain.

The memo's timetable indicates that basic RFID education within the DoD will begin immediately, with vendor-specific pilots launching by January 2004. By May 2004, the DoD will complete its analysis on pilots, with final implementation plans (please note—this is implementation of the UID plan, not implementation of the technology itself) by June 2004. Note that Savi Technology is already providing RFID technology for several shipments slated for the Middle East, while Intermec also has niche RFID projects within the military.

As part of this process, we understand that the DoD has been in contact with Wal-Mart to better understand Wal-Mart's views on RFID. We expect this announcement to add materially to the RFID momentum already established by Wal-Mart's vendor RFID requirements, since the top suppliers of the DoD are large industrial companies that don't necessarily fall under Wal-Mart's requirement. These companies include Lockheed, Boeing, Northrop Grumman, and Rayethon.

Other noteworthy RFID news:

* UPS recently noted that while it doesn’t intend to adopt RFID technology in the foreseeable future, CEO Mike Eskew believes adoption at some point is inevitable. UPS began evaluating RFID in July and appears particularly interested in technology that will allow RFID to be embedded in shipping labels. [We view Zebra's new R110Alchemy product as ideal for such an application.]

* MPI Label Systems recently introduced the 360 RW label applicator, which appears to be a competitive offering to Zebra's R110Alchemy product. However, several key differences exist between the products:

1) The R110Alchemy attaches an RFID tag to a bar code label as needed, while the 360 RW labels are pre-packaged with each label having an embedded RFID tag. [This is a more costly solution for those applications that don't require an RFID component.]

2) The 360 RW only works with 13.56 MHz tags, and a unit capable of working with UHF tags (860MHz-950MHz) is only in the development stage. The R110Alchemy uses UHF. [Note UHF is part of the proposed ePC standards—UHF will also likely be required by WMT.]

We want to thank to Reik Reak and RWB for sharing both the news items and the commentary.

For more information: Robert W. Baird & Co., Milwaukee, WI, PH (414) 298-1030,

Email: rread@rwbaird.com.

Matrics Shows Off New Tag Assembly System

Sometimes, new solutions come in old form factors. Such is the case for Matrics Inc. with its new tag assembly system. The new Matrics manufacturing process has been dubbed PICA, which stands for parallel integrated chip assembly. What is being termed as “revolutionary” really combines the technology of two very old machines—the printing press and the punch press.

Most people probably have somewhat of an understanding of how the printing press works. For our readers who may not know how a punch press works, it’s a fairly simple process used in many machine shops—usually on sheet metal parts. Basically, a piece of flat sheet metal is slipped into a die—an elaborately designed and machined device for forming or punching holes in metal. In the case of Matrics, the top half of the die would have “pins” protruding that would match holes in the bottom half of the die. When the sheet of metal—or in Matrics’ case, silicon—is placed between the two die halves, a machine operator triggers the machine. The top half of the die comes down on the metal and punches a hole as the pins continue downward into the mating holes on the bottom half of the die.

With PICA, Matrics uses the printing press technology to create sheets with many antennas on them. Then, a sheet is slipped under the punch press-type device. The punch press not only punches out a silicon chip, it attaches the chip to the antennas on the sheet which are coated with a fast-drying adhesive. This reduces several manufacturing steps into one. And Matrics believes this it the key to significantly reducing tag costs and the answer to building hundreds of billions of tags per year. [Editor’s note: Our apologies to Matrics if we have over-simplified this explanation.]

Tom Coyle, Matrics VP of supply chain solutions, told SCAN/DCR, “Alien Technologies and Philips have systems that reduce the manufacturing process from three steps to two. We have reduced the process from three steps to one. We have bypassed the ‘strapping’ stage. Our manufacturing process is 10 to 20 times faster than any other process in the market. It is a common sense approach to making billions of tags at a low cost.”

PICA incorporates nearly 15 provisional Matrics patents and, as we said, uses some technology that has been around for many years. So, we asked Coyle why the company didn’t use this process earlier. “It simple,” he answered. “There wasn’t any need to make billions of tags per year. Now, with the recent Wal-Mart and DoD announcements, as well as some other large applications like the one at International Paper, there is the need to have better and faster production capabilities.”

Continuing, Coyle gave us an example of a problem the military hopes to solve with RFID. “The government routinely gets rid of things it doesn’t use. But, recently, the DoD found that some of the excess ‘stuff’ it was selling off could be used to create biological weapons. Suddenly, it became painfully clear to the DoD that it needed a better way of tracking supplies to prevent such occurrences. We believe the DoD business may be much bigger than even the business generated from Wal-Mart’s decision to implement the technology.”

A PICA prototype was built earlier this year and Matrics said a production machine will be installed in the first quarter of 2004 at the company headquarters in Columbia, MD. Eventually, Matrics plans to install a number of other machines at strategic locations close to its customers.

We view this announcement as a positive for the RFID industry. Some costs may never be reduced in making a tag. Silicon is already sold in such mass quantities that prices may not drop. But, a manufacturing process that reduces steps and eliminates the need for human handling is an area where we can do something to decrease tag prices.

For more information: Matrics Inc., Columbia, MD, PH (410) 872-0300,

Email: lchurchill@matrics.com.

Checkpoint Systems—A Different Twist On RFID

While much of the recent focus on RFID applications has turned to cartons and pallets in the supply chain, Checkpoint Systems Inc. has not been so quick to give up on retail item-level tracking. Most RFID vendors believe that, at some point, item-level tracking will make sense. The subtle difference is that Checkpoint thinks it makes sense now.

There are a number of good reasons why the Thorofare, NJ vendor is sticking to its guns with item-level tracking. First, the company’s roots were in retail security. Checkpoint is one of the leading vendors for CCTV surveillance cameras and for EAS (electronic article surveillance) tags and readers. For years, the company has been selling RF-based tags for securing retail items. So, Checkpoint has its foot firmly planted in the doors of much of the retail community. According to John Thorn, Checkpoint senior director and general manager of the supply chain and brand solutions group, that is why the company is ideally suited to take RFID to the retailers for in-store applications.

Although using RFID for retail item-level tracking will remain on Checkpoint’s target list, it is certainly not the company’s only focus. “We believe RFID provides the best solution to end-to-end tracking,” said Thorn. “We have done work at both ends of the supply chain. At the manufacturer’s end, we have provided EAS source tagging solutions. At the retail end, we have provided in-store antitheft systems. Now, we want to expand our focus to include the middle area, as well. We are moving away from proprietary systems to EPC-based solutions.”

Some of Checkpoint’s specific targets relating to consumer packaged goods (CPGs) are:

n The retail distribution supply chain in the

   manufacturing sector

n Retail in-store applications

n Brand protection

n Advertising compliance

“We want to sell a whole range of solution sets,” Thorn told SCAN/DCR. “We’re not just interested in hardware sales. We want to provide a network software platform for intelligent routing that will enable companies to quickly institute pilot programs and subsequent rollouts. Checkpoint is already working on pilots with some of Wal-Mart’s suppliers. Our company will continue to leverage its experience in the retail environment to help early adopters.”

A few years back, Checkpoint acquired Meto, a company that provides bar code printers and labeling services. The acquisition included 30 worldwide service centers. Meto is the third largest provider of labels for the retail industry, behind Paxar and Avery Dennison. In addition, Meto was an early pioneer in combining bar code and RFID technology. Although this is yet another reason why Checkpoint is tied to the retail industry, Thorn cautions that RFID vendors will need to proceed with caution.

“There are many consumer issues to deal with,” said Thorn. “We all saw what happened with Benetton. [See SCAN/DCR 3/28/03, 4/25/03.] It is critical that we communicate with the general public to ease their fears of RFID and provide assurance that the technology will not be used to track their personal lives.”

Last year, Checkpoint sold 4.2 billion RF-based EAS tags to the retail industry. Now, the company wants to combine human readable, bar code, and RFID technologies. “Checkpoint has retrofitted its legacy EAS system to allow RFID reading,” said Thorn. “RFID industry leaders in UHF technology, such as Matrics and Alien Technologies, have looked to Checkpoint to tap our experience in retail applications. We have also worked with PSC on technology that will deactivate EAS and RFID tags, as well as read bar codes.

“For the retail apparel industry, we have reusable tags that help monitor inventory and  control shrink. We developed an overhead zone reader that is about 12 in. x 12 in. and incorporates two antenna heads. The reader is place approximately 12 to 14 feet above shelves with tagged items. If two red dresses leave the shelf, the system knows it. If five dresses leave the shelf all at once, the system alerts the store management that a possible theft is occurring. So, it records inventory changes and serves as an antitheft system.”

In addition to its work in the retail sector, Checkpoint has been active in a host of other RFID applications. The company is one of the leading providers of library management systems. Law firms use its technology to track legal documents. Airline baggage handling, automatic manifesting, automatic truck location, distributed self-checkout, industrial laundry sorting, medical supply/device tracking, parcel shipping, and pharmaceutical manufacturing are a few of the other apps covered with Checkpoint RFID systems. But, according to Thorn, the company’s work has just begun.

“The RFID industry still needs to address problems with standards, pricing, and consumer privacy,” Thorn stated. “We must show clear benefits and ROIs. With respect to consumer privacy, I believe the industry should provide forum for consumer advocate groups to air their concerns. If we can take the wind out of their sails, it will remove a significant barrier to adoption.”

For more information: Checkpoint Systems Inc., Thorofare, NJ, PH (856) 848-1800,

FX (856) 848-0937, Web site: www.checkpointsystems.com.

Active Tags And Software—Where Do They Fit In?

RF Code President Armando Viteri says low-cost active tags and a total software platform for all AIDC technologies will be a must in any supply chain solution.

Although most of the attention in the RFID industry is focused on various versions of passive tags, there are some leaders in the arena who believe active tags will play an equally important role in the supply chain. Among those are Armando Viteri, president of RF Code, Inc. Viteri says any supply chain tracking system will include bar codes, passive tags, and active tags.

In his view of a total tracking solution, bar codes would continue to be a good fit at the item level, passive tags would be used at the carton or case level, and battery-powered active tags would be used for pallets and shipping containers. “Active tags could prove to be a more cost-efficient way of tracking pallets,” Viteri told SCAN/DCR. “Passive tags usually have a relatively short read range. Even if UHF (ultra-high frequency) tags are used, read ranges are normally around three to 10 feet. Our low-cost active Mantis™ tags can achieve read ranges up to 1,000 ft. and have a battery life of up to five years.

“Everybody is focusing on tag costs, but it is the readers or interrogators that will likely drive up the total bill for a system. Using active tags can drastically reduce the number of readers needed for a tracking system. So even though it may cost as much as $10 to use an active tag on a pallet, rather than 20-cents to a dollar for a passive tag, the active-tag system could cost substantially less.”

Continuing, Viteri explained, “It may require three or four readers, with a cost of up to $10,000, to make sure every passive tag is read as it passes through a dock door. And, there could be as many as 100 dock doors in a large facility. Doing the math, it would cost almost $1 million for just the reader infrastructure in a passive tag system. With an active tag system and longer read ranges, the same area and number of dock doors could be covered with three or four readers ranging from $3,000 to $4,000 each. Even using the high numbers, that comes to only $16,000 for the active-tag reader infrastructure.”

 Clearly, the cost savings for readers is potentially huge with an active-tag system. But what about the tags themselves? Viteri said that when you look at all the factors, there really isn’t that much difference in tag costs between the two systems. “You hear a lot about 20-cent passive tags being available,” he told us. “But the truth is, in the volumes being used today, most tags still cost almost a dollar. With a passive tag, you must be careful with where you place it. In many cases, if it is near a metal surface, it won’t work properly. If you keep the tag exposed, it is subject to damage. We can literally bury our tags on the inside of a pallet or container where they will be safe from normal abuse.

“Users also should know that passive tags do not have an indefinite lifespan. So between possible damage from everyday use and lifespan issues, a tag may need to be replaced four or five times during the lifespan of an active tag. So, if passive tags cost a dollar, and you replace them five times, the cost of the tag by comparison to an active tag is really $5. Then add in the cost of reprogramming the new tags and downtime issues. So, with respect to tag costs, there may not be that much difference in the total cost of ownership between the two systems.”

It is important to keep in mind that Viteri is only talking about the pallet and container level when he says active tags may be the best technology. He was emphatic that passive tags make much more sense at the case and carton level. “If you use active tags to track a pallet within a warehouse, you can tell exactly where it is at any given time,” said Viteri. “Once you know where the pallet is, it is much more economical to use a passive-tag system to actually track and inventory the actual cases on the pallet. You can use portable readers to determine the contents of cartons and to record pertinent information.”

So, if you have a system that incorporates active tags, passive tags, and bar codes, how do manage the whole data capture process. RF Code CIO and VP Dr. Nissim Ozer says you must have a device-independent software platform to handle all the technologies. RF Code’s answer to the problem is a product called TAVIS™, which stands for total asset visibility. In addition to the technologies mentioned, the TAVIS platform can disseminate information from real-time locating systems (RTLS), GPS (global positioning systems), and cellular locating systems.

“TAVIS is the glue that binds everything together,” Ozer told SCAN/DCR. “It can connect any type of data collection technology to an enterprise software system, from vendors such as SAP or Oracle. With respect to RFID adoption, we are not working with a clean sheet of paper. There are existing systems in place. If we expect users to adopt RFID, we must make it simple to integrate the technology into whatever system the customer is using. With TAVIS, we can accomplish that.”

TAVIS has been in commercial use for nearly two years, although only with RF Code’s hardware. In September of this year, the company announced a TAVIS’ version for all types of AIDC technologies. It solves issues concerning software, the backbone, the application layer, and delivery systems.

“TAVIS provides an API (application program interface) to link data collection systems to software like inventory control, ERP, and MRP,” said Ozer. “Our platform can control how much information is communicated to existing software packages. We don’t want to overload customers’ systems.

“For example, imagine a network of 200,000 active tags sending beacons out every second. This is a huge amount of data packets. How many times does a customer need to know that an item is in a certain location? TAVIS allows the customer to say, ‘I only want to see certain information.’ So, although the beacons will continue, the system will only receive information that is requested by the user.”

Viteri believes TAVIS will be an enormous help to system integrators as they begin to offer RFID as a new component in their product offerings. “Our sales used to be almost exclusively through OEM agreements,” said Viteri, “but we are transitioning to a channel sales system. There aren’t many resellers that offer RFID, so we must do everything possible to make it easier for them to take on our products.”

In addition to a new channel system, RF Code is working on new sales development with several large AIDC industry partners. The company has agreements in place with such notables as JDS, Mitsui Bussan Digital, SAMSys, and LXE. LXE has been a major player in Homeland Security initiatives. Its technology is in use in 60% of the worldwide ocean ports. SAMSys is helping RF Code develop interrogators to read active tags, as well as multi-frequency, multi-protocol passive tags. “If our industry combines the best of what each technology has to offer, provides a software platform to manage the data, and makes our technology easy to integrate, we should see success in the market,” said Viteri. “There will be plenty of business for all our vendors.”

For more information: RF Code, Inc., Mesa, AZ, PH (480) 969-2828, FX (480) 969-6670, Email: vicki@rfcode.com.

DoD Says Strike While The Iron Is Hot

Cabinet positions come and go, depending on who is in the White House. And DoD (Department of Defense) policies can change as well. The current administration has been friendly to the AIDC industry, but we must move quickly to take advantage of new sales opportunities before they vanish.

The DoD recently announced a new UID (unit identification) program, that lays out requirements for marking and life-cycle asset tracking of items purchased by the military. Now, at the direction of Principal Deputy Under Secretary of Defense Michael Wynne, major DoD suppliers must begin to implement RFID as a medium for carrying required information outlined in the UID program. Assistant Deputy Under Secretary of Defense Alan Estevez has the daunting task of bringing the new RFID initiative to fruition.

RFID vendors will have to move quickly if they want a piece of the DoD action. According to an aggressive timetable set by the DoD, its major suppliers must have pilot programs in place by the first quarter of 2004. By May or June, the DoD wants all feedback and analysis from the pilots in its hands. By July, the DoD would like to have a finished proposal outlining compliance for RFID implementation.

So is the deadline feasible? Well, maybe. Lt. Col. Gregory Redick, who was instrumental in helping draft the UID policy, told SCAN/DCR, “Suppliers may not be able to meet all of the current deadlines, but if we don’t push them, nothing will happen. People tend to resist change, so you have to set aggressive goals.”

When we asked Estevez if the targets were simply a method of lighting a fire under DoD suppliers or if he thought they were realistic, he said the answer is, “A little of both. We need to keep aggressive targets to create a sense of urgency. But, I believe many of our deadlines can be met.”

The DoD has over 43,000 suppliers that provide approximately 4.5 million items to the military. That seems like a lot of companies to convert to RFID. However, the top 100 suppliers account for between 70% and 80% of the total DoD purchasing dollars, and that is where the DoD is focusing its efforts. To help these top suppliers get started, the DoD is sponsoring a “supplier meeting” on December 2, 2003. At the same event, the DoD will host an AIDC vendor “show.” [See page 7 in this issue, ed.]

One great thing about the DoD is that it always seems willing to accept help with its programs. During the process of drafting the UID policy, Redick said everybody who was interested in participating was welcome. “Even the New York City Transit Authority showed up,” he stated. “With so many opinions, and so many representatives, I sometimes felt like a grandmaster cat herder. But in the long run, the vast amount of input helped us create a more thorough policy.”

Estevez agrees. When we asked him what our industry could do to help meet the target dates, he said the DoD could use some help in educating suppliers. “We need all the help we can get in this area,” he stated. “I am sure we’ll have wide-eyed suppliers asking us why they should implement RFID and how to go about it. We can tell them why, but when it comes to how, we need AIDC and RFID vendors to provide educational forums.”

We asked Estevez and Redick if they were worried about the lack of industry standards. Estevez said it would be lovely if everyone agreed on one standard, but that the DoD could not afford to wait for that to happen. “We need this technology in place now,” said Estevez. “We never know how long we’ll have support from the top, and RFID is an important technology. We are focusing on the EPC spec but have some issues that need worked out. We are currently addressing these issues with EPCglobal. Eventually, we hope there will be compatibility with what ISO is doing.

“As I said, we can’t wait for these organizations to come together. We have men and women in Iraq that are spending huge amounts of time scanning and sorting supplies. These soldiers could be doing other things, including focusing on their own personal safety. RFID would enable hands-off asset tracking. It would also make our operations more efficient. We certainly don’t want our people running out of food, water, medical supplies, and ammunition. We owe it to them to implement RFID as soon as possible.”

Redick also believes that standards are important and feels there could be more cooperation. Almost a third of all DoD spending is in aerospace technology. “It would have been a great help if the aerospace industry had worked more closely with ISO,” said Redick. “The aerospace industry decided to develop its own marking spec, Spec 2000. The rest of the world was using ISO specs. Things would have been much easier if everybody had agreed to use one standard.”

Finally, we asked Estevez if he was at all confused by the massive amount of misinformation surrounding RFID. “We know there has been a lot of hype about this technology,” he answered. “But we want to be an early adopter; we want to help shape what RFID will become. Of course we would like an inexpensive tag that we could write to throughout the supply chain. But for now, we’ll work with what is available. RFID is a technology we believe in, and we are serious about making its implementation a reality.”

Comment: These new DoD initiatives could turn out to be even more impacting than the LOGMARS program was to bar coding. And, they certainly parallel what is going on with Wal-Mart’s program to implement RFID. There is no uncertainty here; the DoD is going to make RFID a major component in its tracking systems. As Estevez and Redick said, even a lack of standards and products that don’t always live up to their hype will not stop them.

The only thing that could throw a wrench into things is if we do not move quickly enough, and a new administration comes in and decides to shelve the project before it is completed. So, the message is clear. Our industry should resolve its standards problems, put an end to the misinformation surrounding the technology, and provide educational support whenever possible. And we need to do all this now.

We are at the point we’ve all been waiting for. It will take time to make RFID ubiquitous in the supply chain … maybe even five to 10 years. But clearly the movement by Wal-Mart and the DoD shows the adoption process is beginning. Let’s not miss out on the opportunity.

For more information: Department of Defense, Alan Estevez, PH (703) 601-4476,

Email: Alan.Estevez@osd.mil; Gregory Redick, PH (201) 393-3273,

Email: Gregory.redick@dcma.mil.

Vendors Speak Out On DoD Initiatives

We’ve heard from the DoD, but what do vendors think about RFID deadlines? Both Scott Medford, Intermec VP of global business development, and Chris Hook, Zebra director of RFID business development, believe aggressive deadlines are needed. They also agree with the DoD that many of the deadlines can be met.

“A nationwide rollout in a year’s time is certainly possible,” said Hook. “This market is being driven by business needs, and that is why it will grow so quickly. We can start small and let the market dictate how fast we move. The same holds true with tags. As business needs increase, we can begin to incorporate better tags with improved features.”

On this topic, Medford disagrees with Hook and, to some extent, with the DoD. “Users must tell RFID vendors what they want from us,” Medford told SCAN/DCR. “It is costly for big silicon makers to set up a production line to run one type of tag and then change six months later. Everyone has been saying that volume will bring down tag costs. Vendors won’t see those kinds of volumes if users don’t limit the types of tags they are asking for.”

We must admit, we’ve heard similar views from giants such as Philips. According to Philips Global Strategic Business Manager Saleem Miyan, the giant silicon maker can produce as many ICs (integrated circuits) as the market will bare. But, changing manufacturing processes is costly. Like Medford, Miyan says users should let chip makers know what their needs are.

The one thing everybody agrees on is that the DoD—and

Wal-Mart—are setting the stage for huge growth in the RFID market. And that’s good news for the entire AIDC industry.

For more information: Intermec Technologies Corporation, Everett, WA, PH (425) 348-2799, Email: kathie.anderson@intermec.com; Philips Semiconductors, London, UK,
PH +44 208 730 5151, Email: saleem.miyan@philips.com; Zebra Technologies Corporation, Vernon Hills, IL, PH (847) 634-6700, Email: lbeyer@zebra.com.

Wal-Mart Supplier Conference Creates Real Stir

RFID vendors and Wal-Mart suppliers alike are still reeling with the excitement generated at the giant retailer’s two-day RFID conference.

Thanks to some great reporting from our alliance partner, Venture Development Corporation (VDC), we were able to get a complete run-down of what went on at the Nov. 4-5 RFID conference that Wal-Mart held for its top 100 suppliers (actually, 126 suppliers showed up). Although there were no huge surprises, everyone left the event charged up about the future of RFID in the supply chain.

On day one of the conference, Wal-Mart told its suppliers about the potential benefits of using RFID—both to Wal-Mart and to the suppliers themselves. VDC Senior AIDC/RFID Analyst Michael J. Liard, told SCAN/DCR, “Wal-Mart has tapped RFID as the technology that will help it limit out-of-stocks, allow supply chain visibility in real or near-real time, and reduce costs and labor. The benefit for Wal-Mart is clear: higher costs and poor inventory control in the supply chain does not help anyone. With Wal-Mart selling over $245 billion worth of goods in fiscal year 2003, a 1% improvement in the out-of-stock issue could generate nearly $2.5 billion in very profitable sales.”

One of the primary benefits conveyed to Wal-Mart’s supply chain partners is the additional sales revenue that suppliers can generate due to improved out-of-stock levels. The world’s leading retailer also said that lower operating costs can be realized through labor reduction and improved business processes. “Wal-Mart communicated to its partners that using RFID is more than just about compliance with the mandate,” said Liard. “Suppliers should look for a return on investment within their own operations.”

According to Wal-Mart’s presentation to technology vendors, the major milestones for RFID deployment include:

n  2004: Expand current distribution center pilot in Texas to include 12 additional products from Wal-Mart suppliers. So far, 4,500 pallets and cases have been successfully read. Launch pharmaceutical tracking pilot in March. Refine core RFID strategy throughout the year.

n  2005: Continue regional implementation and domestic (U.S.) expansion throughout year. Initial distribution centers include: a Regional Distribution Center (RDC) in Sanger, TX; a Global Distribution Center (GDC) in Cleburn, TX; and a SAM’s Club Distribution Center in Desoto, TX. These centers serve roughly 150 Wal-Mart and Sam’s Club stores. No state-by-state or regional rollout plans are currently scheduled.

n  2006: Complete rollout for all suppliers by the end of year.

Some analysts have estimated it could cost Wal-Mart’s suppliers in excess of $2 billion to comply with the company’s RFID mandate. Having said that, clearly not all of the suppliers were jumping for joy at the thought of laying out major capital expenditures for a technology they don’t completely understand.

So what was the breakdown with respect to supplier support? According to VDC, 25% of Wal-Mart’s suppliers are experiencing “compliance denial”—they are stalling adoption or wishing RFID would go away. Another 25% are embracing the benefits of RFID but are exercising caution moving forward with RFID compliance. The remaining half are actively volunteering to be first implementers/adopters of RFID.

Chris Hook, Zebra Technologies director of RFID business development, offered SCAN/DCR a little different breakdown. “Nearly 20% of the suppliers are ‘fully engaged,’ meaning they understand the benefits of the technology to both Wal-Mart and to their own internal operations. Approximately 50% are ‘engaged;’ they support the use of RFID but don’t fully understand all the needs with respect to compliance. The remaining 30% seem to be taking a wait-and-see approach.”

Although suppliers really can’t afford to hold off with RFID adoption, there is some sound reasoning for the wait-and-see attitude. Wal-Mart has said it eventually would like to use EPC class 1, generation 2 (C1G2) tags. In simple terms, these are tags that would allow users to write information to the tags as pallets and cartons move through the supply chain. But for the moment, Wal-Mart will use a simpler, less expensive tag that uses WORM (write once/read many) technology. Suppliers are undoubtedly wary of installing an expensive system that may be replaced in the near future.

So why doesn’t Wal-Mart simply go with the more elaborate tag now? Well, for one, the EPC C1G2 spec has not been completed. And, there is a movement to work out details that would enable C1G2 to comply with ISO’s version of the spec. Some standards gurus have told us they believe the so-called “combining” of the two specs could happen as soon as January [See Steve Halliday story on page 8, ed.]

Intermec Technologies VP of Global Business Development Scott Medford believes Wal-Mart would be well-advised to use the tag it really wants, rather than pushing one technology and then changing mid-stream. “It’s no secret that manufacturing volumes equate to lower costs and prices,” said Medford. “It is very likely that the specs Wal-Mart is waiting on will come to fruition soon. If Wal-Mart wants a tag that can be written to many times, that’s what it should use from the start.”

Medford also said that both Wal-Mart and the DoD [See cover story, ed.] should separate their requirements into two categories. The first category should cover how you communicate information. The second should address what data needs to be captured and in what format the data is stored.

In addition to standards issues, VDC raised questions about RFID’s technical capabilities. Liard pointed out that there are still unresolved issues surrounding the technology’s performance. Wal-Mart has said anything less than 100% accuracy is unacceptable. Most pundits give RFID a 98% accuracy rating. But, do those ratings take into consideration the challenges of reading tags when they are placed on a metal surface or when the tags must be read through a liquid? Both Wal-Mart and the DoD have set aggressive deadlines for RFID adoption, but, with these issues in mind, Liard questions whether the deadlines are realistic.

Both Hook and Medford believe the deadlines can be met … or at least for the most part. We are not so sure. There just seems to be too many infrastructure issues to deal with in such a short period of time. In addition, much education needs to be done. But, even if users understand the technology, there is still a shortage of trained integrators who can help these suppliers comply with Wal-Mart’s demands.

Whether the deadlines are realistic or not, they are still needed. There needs to be a major push to adopt RFID, and these deadlines should do the trick. Some users may throw their hands in the air and give up, but we don’t think very many will do so. They can’t afford to lose the business opportunities provided by possibly two of the world’s largest purchasers. The next two years will be exciting times for our industry … and we’ll be here to bring you the news as it unfolds.

For more information: Intermec Technologies Corporation, Everett, WA,
PH (425) 348-2799, Email: kathie.anderson@intermec.com; Venture Development Corporation, Natick, MA, PH (508) 653-9000, Email: mikel@vdc-corp.com,
Web site: www.vdc-corp.com; Zebra Technologies Corporation, Vernon Hills, IL,
PH (847) 634-6700, Email: lbeyer@zebra.com.

Printer Vendors Shoulder RFID Challenges

In the past few years, even some of the major printer companies were taken in by the mass media hype about RFID replacing bar codes. They wondered if RFID would indeed take a monster bite out of their sales. But now, these same printer vendors stand to make huge profits from RFID. On the down side, they will likely bare the brunt of finding ways to meet tight deadlines set by Wal-Mart and the Department of Defense (DoD).

So why are printer manufacturers benefiting? Well, it’s pretty simple when you think about it. You have to have some way of applying a tag, and, in many cases, it’s going to be in the form of a “smart label.” In addition, for years, bar code labels have contained human readable information for those times when a scan fails. Just because RFID is beginning to make its way into the supply chain market, it doesn’t mean everyone is going to immediately drop bar codes and human readable markings. The three technologies will coincide for many years. So, as it turns out, Wal-Mart and the DoD are depending on printer vendors to help suppliers comply with new RFID mandates.

The question now is, are these vendors up for the challenge? Some of them, such as Intermec, Meto, and Zebra, have taken lead roles in developing RFID enabled printers. Others, such as Datamax, Printronix, and SATO America, took a more cautious approach and waited on the sidelines until it became clear the RFID market was ready to burgeon. However, those vendors on the sidelines were crafty. Although they weren’t taking lead roles, they were still watching RFID carefully and preparing for the time when it made sense to enter the market. They each had research and development going on to create RFID product offerings. Now, all the players are rushing to market.

In the course of the past few months, SCAN/DCR has had a chance to speak with all of these players. Sarah Schabacker, business development manager for Datamax Corporation, told us, “Datamax has an RFID-enabled printer that is ready for the market. It uses pre-converted label media with embedded RFID tags. I am currently on the road meeting with our VARs to discuss RFID possibilities. In addition, we are in the process of setting up regional reseller seminars to explain how the technology works. We’ve just been waiting for a sign that the market was about to take off. The news from Wal-Mart was a clear indication that now is the time to enter the market.”

According to Schabacker, resellers are undecided about RFID. “Some resellers have been asking about RFID, but many have not” she stated. “Most VARs tell us that no one is willing to pay for RFID systems, and some VARs even think the RFID market will never materialize to the extent it has been hyped. The larger VARs have expressed the most interest. They have the resources to plan ahead for a year and prepare for a new market. All of them are proceeding with caution.”

Printronix also recently announced that it is offering an EPC-compliant, smart label developer’s kit for RFID pilots. Andy Chapman, Printronix CTO and SVP of engineering and product marketing, told us, “There is a lot of anticipation about what RFID will be able to do in the future, but limited information in terms of how to actually implement the technology now,” said Chapman. “We are working with users to help them define their RFID strategies. Our developer’s kit provides an easy-to-use solution for migrating their existing labeling environments to one enabled for RFID.”

To develop its RFID product, Printronix turned to Alien Technology for help. “We chose Alien for a number of reasons,” said Chapman. “It has a read/write tag. It has the momentum of EPCglobal behind its offering. It has demonstrated a method for producing a five-cent tag, and it has a partnership with Manhattan Associates to help drive sales. By combining Alien’s expertise with our printer verification and network management competitive advantages, we believe our printers will capture a fair share of the market for RFID smart labels.”

Late last year, SATO released an RFID kit for upgrading its printers. Many of Wal-Mart’s suppliers are longstanding SATO customers, so the Charlotte, NC-based vendor is a likely candidate to capture a respectable portion of the sales from Wal-Mart’s recently announced RFID initiatives. “We’ve already been working with high frequency technology in the 13.56 MHz range, and we are now experimenting with EPC-compliant products,” said Robert Karr, SATO vice president and marketing manager. “EPC seems to be capturing the most attention right now, and it is the technology that Wal-Mart named in its mandate.

“We are not limiting ourselves to any single technology or vendor,” he continued. “There are still too many unresolved technical issues. We recently signed an agreement with SAMSys to use its multi-protocol/multi-frequency readers. This allows us to be technology-agnostic. Our parent company in Japan is very excited about RFID and is investing in R&D. With the DoD and Wal-Mart announcements, everybody realizes this is going to be a huge market.”

Like the newcomers in the market, Zebra, Intermec, and Meto agree that vendors will carry the burden of educating users. And although the deadlines for implementation seem a little tight, everyone we spoke with was glad to see aggressive targets in place.

For more information: Datamax Corporation, Orlando, FL, PH (407) 578-8007,

Email: ssbacker@datamaxcorp.com; Printronix, Irvine. CA, PH (714) 368-2638,

Email: achapman@printronix.com; SATO America, Inc., Charlotte, NC,
PH (704) 644-1650, Email: bkarr@satoamerica.com.

PSC Releases RFID Survey Results

On November 10, PSC Inc. released the results of a survey conducted at the recent EPC (Electronic Product Code) Symposium in Chicago. The survey revealed that manufacturers and suppliers plan to significantly increase deployment of RFID technology. While 67% of survey participants revealed they are not currently using RFID in their supply chain, 100% indicated that they plan to utilize or pilot the technology within the next two years. Nearly 47% plan to do so in the next year.

The survey was conducted among the 1,208 attendees during the three days of the EPC Symposium, which was co-located with Advanstar’s Frontline Supply Chain Week Expo 2003. The Symposium was produced by the Uniform Code Council (UCC) and the MIT Auto-ID Center, of which PSC is a sponsoring member. Survey participants included senior executives, and operations, supply chain and IT managers of leading manufacturers and suppliers worldwide.

When asked to identify the role handheld readers will play in the industry as RFID adoption increases, 67% of survey participants indicated that handhelds will continue to be used for exception handling. Approximately 32% said they will use handhelds in inexpensive "test" or "starter" kits as an alternative to more expensive, fixed-position readers.

Two-thirds of respondents indicated they will add RFID capability to their fleet of forklift trucks and vehicle-mount terminals and 92% anticipate achieving this addition through the use of handheld readers.

The survey also revealed that 75% of manufacturers and suppliers anticipate RFID tags will not completely replace bar codes, and that the two technologies will coexist.

"This study validates market indications that RFID will have an important impact on next-generation supply chain technology and will coexist with traditional bar codes into the foreseeable future," said Clarke McAllister, PSC RFID solutions manager. "Handheld reader technologies can provide a key, cost-effective bridge as companies integrate RFID into existing supply chains."

The EPC Symposium formally launched the first platform of the EPC™ Network developed by the MIT Auto-ID Center. The Symposium provided manufacturers and suppliers with specifications and detailed elements on how they can incorporate the EPC Network into their supply chains. Attendees were educated on how products with EPC tags interact with each other, the manufacturer, and the retailer to form an optimally efficient cycle of direct, real-time supply and demand.

For more information: PSC Inc., Eugene, OR, PH (541) 683-5700, FX (541) 345-7140,

Email: clarke.mcallister@pscnet.com.

HighJump Overcomes RFID Hurdles

Our headline isn’t a description of a track meet, but vendors are racing to market with the necessary software to enable major RFID rollouts. Both the DoD and Wal-Mart have announced stringent deadlines for supplier compliance to their RFID initiatives, and to comply, suppliers will need software to link information captured from tags to existing ERP systems. HighJump Software® believes it is a strong contender to win the 100-yard dash.

“Wal-Mart’s timeframe doesn’t allow for a complete overhaul of existing IT systems,” said Chris Heim, HighJump president and CEO. “Suppliers who are struggling to meet tight deadlines need a bolt-on package. Flexibility is the key. HighJump was one of only three software exhibitors at the Wal-Mart Symposium held on Nov. 4-5. Many Wal-Mart suppliers already use HighJump supply chain and WMS software, so we believe they will turn to us for answers to their RFID software needs.”

Heim said the RFID software market could turn out to be more competitive than the RFID hardware market. “We are constantly butting up against other software vendors,” Heim told SCAN/DCR. “First, there are the RFID hardware vendors who have decided to issue software for trials and pilot programs. However, we don’t view them as a threat, because software is not their area of strength. Actually, we are trying to work with the hardware vendors and have recently developed a relationship with Alien Technology. [Editor’s note: Intermec, Tyco Fire & Security, Checkpoint Systems, and RF Code are just a few of the RFID vendors now offering software.]

“ERP software vendors have been capturing some of our traditional applications, but the supply chain is a little more difficult for them than in-house IT systems. We believe our real competition is going to come from traditional WMS and supply chain software providers, and there are plenty of them out there. Nevertheless, we think we have the installed base and expertise to be a leader in the market. We have been in this business since 1983, so we’re not a Johnny-come-lately.”

HighJump’s staple product is a comprehensive software package dubbed, Supply Chain Advantage™. The package addresses software needs for warehouse management, visibility and tracking, shop floor data collection, and now, with the addition of RFID Configurator™, RFID compliance.

RFID Configurator features an easy-to-use wizard. It enables companies to quickly configure specific processes to use RFID, bar codes, or both, at multiple points within the supply chain through the following HighJump solutions:

n  Warehouse Advantage®: HighJump has extended its warehouse management software to include RFID compliance, as well as workflows that support RFID. All HighJump customers now have the option of selecting which activities they want to perform with RFID, bar codes, or both.

n  Compliance Advantage™: This software allows suppliers to quickly and easily achieve RFID compliance as mandated by leading users such as Wal-Mart and the DoD.  Because it is highly configurable, this software can also be adapted to meet evolving RFID standards and future mandates.

n  Tracking Advantage™: This software provides tracking for returnable containers and other high-value assets in closed-loop environments. In addition to providing hands-free recognition of inbound and outbound containers, this application ensures total management and visibility of these containers throughout the supply chain.

n  Data Collection Advantage®: HighJump is bringing the benefits of RFID to the manufacturing shop floor. Manufacturers can now track work in process and finished goods with RFID technology, which is especially important to manufacturers that track items in lots or by serial number.

During the development process for the new RFID offerings from HighJump, Heim said the company worked closely with Microsoft. “Microsoft is looking very closely at RFID and software,” Heim told us. “In addition to the help it provided during the development process, Microsoft continues to aid our efforts with marketing resources. We are leveraging systems like .NET with the hope that it will help us gain broader market acceptance.”

In a press release, Chris Colyer, industry manager for general manufacturing at Microsoft stated, “By basing its RFID solution on Microsoft technology and ensuring the use of RFID and bar coding at the same time, HighJump is delivering a solution that addresses customers’ needs now, while also giving them a scalable and flexible path forward as the technology advances. This unique approach to RFID empowers HighJump customers to move ahead with this important technology without sacrificing customer service, operational performance or profitability. In addition, basing its Advantage Platform on SQL Server not only allows HighJump to build an enterprise-ready solution, but positions the company for strategic integration with additional Microsoft technologies in the future, including Microsoft .NET.”

According to research firm AMR, it will cost Wal-Mart suppliers nearly $2 billion to incorporate RFID per the giant retailer’s plan. There are no real figures as to how much of this cost will be in software upgrades, but clearly, there is enough opportunity to keep vendors scrambling for a piece of this new business.

For more information: HighJump Software, Eden Prairie, MN, PH (952) 563-5122,

Email: mike.devine@highjump.com.

Tyco Leaves No Stone Unturned With RFID

Within the past three months, Tyco Fire & Security (Tyco) has released products addressing virtually every sector of the RFID market. The company is banking on 30 years of experience in the retail sector—where it has provided electronic article surveillance (EAS) tags—to help it capture a sizeable share of the burgeoning RFID market.

Tyco’s RFID line—which is marketed under the brand name SensorID—was acquired when Tyco International Ltd. purchased security expert Sensormatic Electronics Corporation in 2001. Since the acquisition, Tyco has broadened its line through internal product development and a series of alliances and licensing agreements. “We are staying technology neutral,” said George Reynolds, Tyco vice president of RFID. “Our mix of internally developed and licensed technologies will enable us to meet the needs of any user in the supply chain. All of our offerings are based on open standards.”

As with most RFID vendors today, Tyco is promoting its alignment with EPCglobal and the Electronic Product Code (EPC). But, there are other standards that historically have been used by most global businesses; among the most notable is ISO. So, we asked Reynolds for his view on current standards projects.

“Our new Agile Reader Series 2, developed through a collaboration with ThingMagic, supports five different protocols,” Reynolds told SCAN/DCR. “It is an example of how we believe in interoperability. At least 15% of my staff is dedicated to standards work, including the WG 31 efforts. We need to provide a roadmap to ISO 18000.

“Tyco is working diligently to find middle ground for RFID vendors. We all need to cooperate to create an industry, but finding that middle ground is slow work. If we don’t find a compromise soon, we’ll be in the same place two years from now. End users will still be waiting for us to get our act together.”

Further demonstrating Tyco’s standards efforts, the company debuted its new Omniwave Antenna at the EPC Symposium held in Chicago in September. Like the Agile Reader, the new antenna is based on open standards and enables low-cost installation for users who want to run pilots.

Like many other RFID vendors, Tyco realized it must provide some type of simplified software that will allow users to try the technology in their businesses. “We recently released SensorID™ Works, an RFID software program that gives manufacturers, distributors, and retailers the opportunity to more easily evaluate RFID technology using small-scale pilot programs,” said Reynolds. “Without this piece of the puzzle, prospective customers are unable to run successful trials.”

Clearly, open systems are a must if RFID adoption is to occur at a steady pace. But, there are still other considerations that need attention. “The RFID market is filled with hype, confusion, and unrealistic expectations,” Reynolds asserted. “In addition, there are huge privacy issues that need to be addressed. As a collective group, we have done a poor job of explaining our technology. It is time to pull together and get the facts out to the public. If we don’t address these hurdles now, adoption will be severely hampered.”

According to Reynolds, a recent IMRA survey showed:

n  62% of potential users do not understand how

     RFID can fit into their businesses

n  18% are testing the technology

n  11% are just hearing about the technology now

n  9% have RFID in their business plans.

“There’s not going to be a revolution, with respect to RFID adoption,” said Reynolds. “Adoption will occur over the next five to 10 years. In the meantime, we must help customers implement the technology and show them the value proposition.”

Reynolds listed five stages for adoption:

1.)  Chiefly compliance

2.)  Value add within four walls

3.)  Extending the technology to partners—showing

      them how RFID can reduce missed shipments,

      billing disputes, and unnecessary forms

4.)  Improving use of working capital—in the long

      run, users will need less facilities because of

      improved supply chain efficiencies and

      tracking costs should actually decrease after

      initial investments

5.)  Growing the top line by providing more value

      to customers.

By the time our interview with Reynolds was ending, one theme seemed to stand out. For the RFID market to grow, RFID vendors must cooperate with each other. The market needs realistic standards, interoperability, and major end user education. “We must have an open dialogue with each other,” said Reynolds. “That means we must reveal everything we know … no tricks. If the market predictions for RFID are even close to being correct, there will be plenty of business for all of us. But, if we don’t work together to drive the market, we are defeating our own purposes.”

For more information: Tyco Fire & Security, Boca Raton, FL PH (561) 988-7035,

Email: dcoller@tycoint.com.

HHP Adds SIRIT RFID To Dolphin

HHP has entered into a strategic alliance with Toronto-based SIRIT Technologies to RFID-enable HHP’s Dolphin handheld terminals. The Dolphin has been a particularly popular device and is widely used by the United States Postal Service (USPS). Representatives from the two companies said the alliance is the culmination of nine months of negotiations.

SIRIT VP Fred Veinot told SCAN/DCR that HHP liked SIRIT’s dual mode engines. “We have successfully combined our low frequency and high frequency readers with a Symbol laser scanner,” said Veinot. “Now, with one device, users can read most leading 134.2 to 125 KHz and 13.56 MHz transponders, as well as bar codes. We have already installed our OEM technology in the HHP Dolphin, and we have the capacity to manufacture readers at high volumes and low costs.”

HHP had been keeping a close eye on the RFID market for the past two years, and according to Don Flynn, HHP vice president of business development, the company had been approached by almost every tag vendor. “We were constantly reviewing products, but the timing just didn’t seem right,” said Flynn. “There were no standards; tag prices were extremely high. But now, it is clearly time to move on this technology. SIRIT already had a dual mode engine [reader]. With this OEM technology, we are able to target new business from the recent Wal-Mart and DoD announcements.” [See SCAN/DCR 11/26/03.]

As part of the terms of the alliance agreement, HHP and SIRIT will jointly develop technology for reading UHF (ultra-high frequency). “Much of our joint engineering will be done through conference calls, but occasionally, our teams will meet at each other’s facilities,” said Veinot.

“UHF technology is important to HHP,” said Flynn. “Transportation, logistics, and the supply chain are key markets for HHP, and these markets will require the longer read ranges achieved through the use of UHF technology. We are working on a roadmap to get where we want to be with respect to UHF RFID.”

It should come as no surprise that the two companies are also working on a way to use imaging technology in conjunction with RFID. HHP is a leader in the image scanning market with its Adaptus line. “Both RFID and imaging are growing markets,” Flynn told SCAN/DCR. “By combining these two technologies, we are certain we can capture a huge piece of the pie in the supply chain niche.”

The two companies have 12 pilots running now as a result of the new alliance, and they are confident these trials will turn into orders. Neither company has placed a dollar figure on how much new revenue will result from the partnership. However, given the recent announcements from Wal-Mart and the DoD, they both seemed excited about new sales opportunities.

For more information: HHP, Skaneateles Falls, NY, PH (315) 685-4318,
FX (315) 685-0049, Email: curryp@hhp.com; SIRIT Technologies Inc., Toronto, ONT, CAN, PH (905) 949-4404, FX (905) 949-6320, Email: fveinot@sirit.com.

RFID—The Technology Must Match The Application

Huge mistakes have been made in how RFID has been promoted. Any honest RFID vendor will admit this. But now, with Wal-Mart and the Department of Defense (DoD) pushing for adoption, it’s time to put aside personal agendas and work for what’s best for the industry. That may mean admitting that another vendor has a better product for a specific application.

For example, it is expensive for large IC makers to jump from one technology to another in their production lines. If they’re set up to manufacture 13.56 MHz tags, a switch to UHF tags is costly, and vice versa for UHF tag manufacturers. So, vendors push the technology they have for all apps.

The reality—and hence, the problem—is that the technology they are pushing is unlikely to meet the needs of every installation. Passive UHF tags have some specific benefits, such as longer read ranges, but 13.56 MHz tags have their special features as well. The same holds true for low frequency tags. Each technology fits well in certain applications; users simply have to choose the technology that works best for their needs.

Most of the current focus in supply chain tracking has been on some form of passive RFID. But, there are two other technologies that also will play an important role in this market—active RFID and bar codes. Each could and should be an integral component in a tracking system. Wise integrators will familiarize themselves with all the available offerings.

With all the new-found interest in RFID, stemming from the Wal-Mart and DoD initiatives, suppliers to these giant users are scrambling to find integrators who can help them comply with upcoming adoption deadlines. Unfortunately, there are not enough integrators with RFID expertise, but SCAN/DCR managed to find one that was willing to share his insight with us.

Jim Dachelet, a principle with Texas-based, RadiantWave, told us, “We’ve been an integrator in the supply chain for 12 years and have offered RFID technology for the past five. Mostly, we use off-the-shelf RFID hardware and middleware. Then, we develop specialized software for our customers. We are obviously excited about the recent announcements regarding RFID, but there may be too much focus on a single technology. The truth is that our best installations have been combinations of several technologies.”

Continuing, Dachelet said, “Passive tags will provide huge benefits in the supply chain, but there are times when active tags will work better. In open-air environments, active tags offer superior performance. For example, in some big distribution centers, trucks actually back into a building, rather than backing up to a loading dock. So how do you make sure the reader is stationed close enough to capture information from a passive tag? With an active tag system, you could read the information from up to 1,000 feet away. One active tag reader could replace 30 or more passive tag readers.

“In a warehouse, active tags can be used to create an inventory file. You can simply walk by a stack of shelves with an active tag reader and capture the information on every item in stock. I don’t advocate active tags over passive tags for every application. In fact, sometimes I don’t recommend RFID. There are situations where bar codes work better than RFID. The key is to understand the customer’s needs and to provide the appropriate technology. We are currently working with a large defense contractor who will use a tracking system that combines bar codes, passive (RFID) tags, and active (RFID) tags.”

RadiantWave is working with a number of the major names in the supply chain sector, including HighJump Software®, Matrics, RF Code, and Alien Technology. “We are vendor agnostic,” said Dachelet. “This enable us to use the best technology available to satisfy our customers’ needs.”

When asked what AIDC vendors can do to help integrators meet the challenges of new RFID business opportunities, Dachelet replied, “In the short term, we’d like vendors to be very clear about what they are offering and what they are not. When we are in the field piecing together a solution, we need to know where to go for each part of the system. We also need support for RFID pilots, including demo kits and, in some cases, education.

“In the long term, vendors must prove they have the capability to produce the volumes we need, and at the same time, show us they can solve performance issues. Current read rates will not satisfy the requirements outlined by Wal-Mart and the DoD. Most of all, we need vendors to open their minds to the fact that their technology may not solve all problems … but it will certainly solve some.”

For more information: RadiantWave,  Nacogdoches, TX, PH (936) 371-0578,

FX (267) 295-8276, Email: jimdachelet@RadiantWave.com,

Web site: www.RadiantWave.com.

Printronix First To Market With RFID UHF EPC Class 1 Commercial Printer

On December 2, Printronix became the first bar code printer manufacturer to ship an EPC-compliant, RFID, UHF, Class 1 commercial printer. The new product is certified by the Federal Communications Commission (FCC). It comes as part of the company’s new Smart Label Developer’s Kit, and Printronix has shipped multiple kits to RFID labs, EPC member companies, and major retailers for pilot use.

Printronix customers can receive next-day shipping on the new product, which retails at $7,995 for the 203 dpi kit and $8,295 for the 300 dpi kit. The developer’s kit contains everything necessary to begin encoding smart labels: a Printronix T5000e thermal printer, an RFID UHF encoder, two rolls of smart labels, ribbon, application and reference notes, technical support, programming manuals and software migration tools that permit the seamless encoding of smart labels.

“Our product supports the Alien Technology 64-bit tag as well as 96-bit tags,” said Andy Chapman, Printronix CTO and senior vice president, engineering and product marketing. “Although it complies with the EPC Class 1 spec, we have engineered the product to be easily upgraded to EPC Class 2 when the Class 2 spec is finished. Our product is available to Wal-Mart and Department of Defense (DoD) suppliers who are rushing to meet stringent adoption deadlines. We wanted to focus on where everybody is now in the standards process but also enable customers to make upgrades as needed.”

Manhattan Associates (MA), a leading warehouse management (WM) and supply chain software provider, is a long-time partner of Printronix. Tillman Estes, MA senior director of product management, told SCAN/DCR, “We do business with a number of the leading bar code printer manufacturers, but Printronix was the first to provide an EPC-compliant, RFID, UHF Class 1 printer. We have the printer in our lab and it works great. Because Printronix has embraced EPC, it enables us to reach out to Wal-Mart and DoD suppliers at a time when being first to market is crucial.”

Printronix’ Chapman told us, “Buyers, so far, have been large companies in the retail supply chain. Fortunately, there is a substantial overlap in Wal-Mart’s and the DoD’s suppliers; when you reach one supplier, you’ve covered both markets. Most customers are still in the trial stage, but this market could ramp up quickly. We are counting on our long-term relationships with partners such as IBM and other OEMs to help us reach potential customers.

“With Manhattan Associates, we have been very lucky,” Chapman continued. “MA is the number-one WM software vendor. Our two companies have very similar visions, so there is a good corporate fit. We both want to make sure our products comply with the leading current specifications and that we provide accurate information.

“MA offers a ‘Compliance Guarantee’ that all goods marked using MA software comply with specifications from the world’s top 100 retail suppliers. The combination of this software and our online data verification guarantees that our customers are using the most accurate marking technology available. Through our joint marketing, we are able to move very quickly.”

For the past two years, Printronix has not made much of a splash in the RFID sector. In fact, few people even knew it was working on an RFID product. “We wanted to wait until the timing was right to come to market with a product,” Chapman explained. “So, we quietly spent the last few years working on a product and waited until the market seemed to be taking off before we made any major announcements.”

Chapman is bullish on RFID. Although there are still many challenges to adoption, he believes that, with the biggest and most progressive companies pushing the technology, widespread use will occur at a fast pace. “With companies like Gillette and others running pilots, this market will accelerate,” said Chapman. “Hesitant companies will have to get on board. In 2005 and beyond, full-scale RFID systems will begin to be adopted.

“We are proud that we were first to market with an FCC and EPC certified product. Intermec Technologies has a similar printer available, but it is ISO-certified rather than EPC. We believe there will be plenty of business for all printer manufacturers, but everybody must move quickly to get a foot in the door with potential buyers.”

And what does MA advise? “The RFID industry must provide low-cost, ‘smart readers’ with the ability to read and write to multiple technologies,” said Estes. “Also, it would be great if customers would land on a particular technology and stay with it. Installing one system, just to replace it with another, is quite expensive. Accuracy is still another challenge. Current accuracy levels for RFID readers are not up to the standards set by Wal-Mart and the DoD. And finally, every vendor should create a well-though-out privacy policy outlining what the technology will be used for and how the tags will be deactivated or killed. We all need to make sure the public understands what we are hoping to accomplish and that it need not fear the technology.”

For more information: Manhattan Associates, Atlanta, GA, PH (770) 955-7070, FX (770) 955-0302; Printronix, Irvine, CA, PH (714) 368-2638,
Email: achapman@printronix.com.

TI Sees Chain Reaction In RFID

“I feel like the RFID industry has been pushing a snowball uphill, and Wal-Mart and the DoD have come along and helped us push it over the top of the mountain,” said Bill Allen, marketing manager, Texas Instruments RFid Systems (TI). “Now the snowball is rolling down the other side, picking up speed and getting larger by the day. This is the biggest and best thing to ever happen to the RFID industry.”

Allen’s reaction is fairly typical among RFID vendors and IC (integrated circuit) manufacturers. But, that makes it no less noteworthy, and the two giant users will continue to create a stir in the press. The supply chain is the Holy Grail for RFID applications, and Allen believes that, as RFID becomes a powerful tracking solution for retail suppliers, other markets for the technology will grow as well.

“We’ve seen opportunities come and go,” said Allen. “Baggage tracking was always touted as a giant opportunity for RFID vendors. It never materialized as well as expected, but it could take off now as the supply chain begins to serve as a testimonial to the technology.”

Clearly the other major driver for RFID has been the development of the Electronic Product Code (EPC) and, in turn, the creation of EPCglobal. EPCglobal, a joint venture between the Uniform Code Council (UCC) and EAN International, is as powerful a force as any we have seen in recent years. An RFID vendor that doesn’t belong to EPCglobal, really doesn’t have a grasp on the situation. TI was a holdout during the days of the Auto-ID Center, but has now—like many other vendors—become a member of EPCglobal.

“TI has always been active in standards development,” Allen told SCAN/DCR. “We believe EPCglobal, under the control of the UCC and EAN, provides yet another forum for TI to push its standards agenda.”

One thing Allen particularly likes about the current EPCglobal initiative is that it addresses multiple technologies. “No one technology will do it all,” said Allen. “If you drop a low frequency tag in a gallon of milk, you can still read it. The same cannot be said for a UHF tag. On the other hand, a UHF tag may have a read range of 20 to 30 feet. That’s a very alluring benefit you can’t get with lower frequency tags.

“Access control is another app that is touted as a potential market for RFID. But, humans are 80% water, so like the milk analogy, UHF tags are not good for that market. My real point is that all frequencies will play a role in the total RFID market.”

TI is now developing its own UHF product. “The focus in the UHF sector has been on a 5-cent tag,” said Allen, “and that’s been unfair. We now believe the market is ready to accept more reasonable expectations. And, we believe new apps will emerge as RFID becomes more credible.”

For more information: Texas Instruments RFid Systems, Plano, TX, PH (214) 567-2511,

Email: billallen@ti.com.

LXE—A Force To Be Reckoned With

In the past nine months, LXE Inc., a wholly-owned subsidiary of EMS Technologies, Inc., has come out of its shell, so to speak. The Norcross, GA-based handheld terminal and wireless network vendor has long been a major player in the AIDC industry, but as LXE President and GM Jim Childress told us, “We sometimes keep a low profile.”

However, since April, LXE has made one major announcement after another and is clearly showing it plans to capture a sizeable share of almost every burgeoning AIDC market. One of the company’s first moves was the creation of ServicePass, a comprehensive service plan for LXE customers. “In essence, we have provided our customers a ‘pass’ for all LXE services,” said Childress. “We want to make sure everyone using our products is satisfied.”

One of the next announcements was that LXE had formed an alliance with HHP, a leader in image scanning technology. Realizing that imaging is going to be an increasingly important part of the AIDC scanning world, Childress has made sure LXE customers will have access to one of the industry’s most touted offerings.

In early December, LXE began offering voice recognition technology. Through a new alliance, LXE will now offer the Voxware VoiceLogistics software on its rugged terminals. “Our customers have an increasingly strong interest in voice technology,” said Childress. “Our commitment to help them improve supply chain performance includes the delivery of new technologies that provide practical business benefits. By teaming with Voxware, we are able to offer them a very competitive solution that adds the dimension of speech recognition to the capabilities they already receive from LXE.”

Possibly the biggest feather in Childress’ cap is the company’s move to take a leading stance in RFID adoption. One of LXE’s largest niche markets is intermodal ports. Capitalizing on its expertise in this market, LXE is playing an important role in working with the Strategic Council on Security Technology, the Transportation Security Administration, and government agencies involved in Homeland Security. Among the notable industry players working with LXE are Savi Technology, Avery Dennison, and RF Code.

LXE’s RFID initiatives don’t stop with intermodal port applications. “RFID will eventually be everywhere,” said Childress. “We’ve been steadily increasing our expertise in RFID for the past two years. In November, we joined EPCglobal. We hope to share our experiences in RFID and, in turn, learn about what other vendors and users have been doing.”

Much of LXE’s earlier RFID experience was with active tag technology. “We now recognize the many applications that will benefit from using passive tags,” Childress told SCAN/DCR. “But, we still believe there is a sound business argument for active tags in certain applications. We are currently working with Savi to jointly develop a handheld terminal with the ability to read both active and passive tags. I agree with Jim Dachelet’s view of the market. The ideal tracking solution will likely include a combination of bar codes and passive and active tags.” [See story on page 3 in this issue, ed.]

Childress said LXE is evaluating many RFID offerings, including products from Alien Technology, Matrics, and others. The company will remain technology neutral. “In the current market, the EPCglobal initiative seems to have the most momentum,” Childress stated. “In the early Wal-Mart and DoD pilots, suppliers will use either EPC class 0 or class 1 products. In Europe, 13.56 MHZ technology is very popular. And in the past six months, UHF tags have come to the forefront. LXE has been working with both passive and active tag technology for the past two years. The point is that there are many products on the market with varying degrees of popularity. We will not limit ourselves to one.”

With respect to the RFID industry in general, Childress sees a “huge set of dynamics going on.” He told us, “Even if you get past the standards issues, there are still many hurdles. The technology still lacks the accuracy levels required by Wal-Mart and the DoD. Then there are the aggressive deadlines that are in place. It will take time to install the infrastructures needed for a total tracking system, and I am not sure anyone can meet the current deadlines. But, I know the top people at both Wal-Mart and the DoD, and they are smart enough to know that you have to keep things moving, even if the timeframe has to be modified. The main point is that these are the ultimate users and they have made it clear that RFID will be a part of their futures, even if there are still problems that need to be resolved.”

Although economical conditions have been tough for the past few years, LXE has averaged 10% year-over-year growth during the entire recession period. This year, that number may even be a bit higher. Childress’ philosophy is to stay on the leading edge with new technology adoption and to stay close to LXE’s core market—the supply chain. New Windows and Windows CE terminals should help LXE reach a broader market as well. Having come from the military to LXE, Childress knows how to walk softly and carry a big stick. Perhaps that’s his motto.

For more information: LXE Inc., Norcross, GA, PH (770) 729-6643, FX (770) 446-9160, Email: pr@lxe.com .