Emerging Trends in RFID

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Some of the Key Questions with this Emerging Technology

• What kind of advances in RFID tag design should I expect?
• Are there any emerging computer hardware or software advancements that will
  help the deployment of RFID applications?

• Is item-level tagging hype or reality?
• What are the important catalysts for the widespread adoption of RFID?
• What does subcutaneous tagging have to do with RFID adoption in the enterprise?

The etymology of the word trend denotes both movement in a general direction as
well as roundabout twists and turns. Early potters could not possibly have predicted
the various turns the wheel would take during the 8,500 years after it was first invent-ed.
Similarly, it is unlikely that Michael Faraday could have imagined any of today’s
RFID applications when he discovered electromagnetic induction.

Technology trends, in particular, are not only shaped by technological invention
and advancements but by economic, social, and political factors. These add a new
dimension of complexity to predicting the ultimate disposition and acceptance of
trends.

Keeping all these complexities in mind, we have identified the top emerging
trends associated with RFID that are expected to drive its ubiquitous adoption. These
trends fall into the following categories: Technological Advancements, Business
Process Innovations, Evolving Standards and Legislation, and Consumer Application
Innovations.

In this chapter [From the Prentice Hall book RFID Field Guide: Deploying Radio Frequency Identification Systems], we use these categories as anchor to do the following:

• Take stock of where RFID technology stands today
• Discuss the recent innovations around RFID
• Examine key factors that will influence its evolution

Technological Advancements

Technological advancements are the high-octane fuel that powers the continued
acceptance and growth of new technologies. These advancements can provide the following
advantages:

• Make existing applications easier to use
• Offer more functionality
• Be cheaper to implement
• Drive deployment costs down

Technological advancements open the door for new applications that were not
imaginable or possible before. In the following section, we explore some of the more
significant technological advancements that are under development today.

New and Improved Tags

Innovation around the design and manufacture of RFID tags is an ongoing process.
Some of the most promising new designs are covered in the following sections.

Alternative Tag Designs

Many factors affect the readable range and accuracy of tags including those that are
physical and environmental. Some examples are detection near metal or liquid and
extreme weather conditions such as low temperature or high humidity. Besides simply
improving on existing technology to overcome these limitations, alternative
physics are being employed that can sidestep or leapfrog these limitations.

The majority of the work in the alternative physics area includes developments
around chipless tags, introduced in Chapter 3, “Components of RFID Systems.”
Chipless tags promise to improve upon the physical limitations of radio frequency
detection while potentially offering reduced costs due to the absence of integrated
circuitry. Chipless tags can be more easily applied to metal and liquid or embedded
in items like paper, thereby offering greater flexibility and functionality in connection
with their use. One chipless tag technology showing promise in supply chain applications
uses Surface Acoustic Wave (SAW) technology. SAW technology involves the
propagation of radio frequency acoustic waves on the surface of polished crystals.
Other promising chipless technologies that have the potential to revolutionize RFID
applications use nanotechnology, genomics, or even chemistry to achieve chipless tagging
and unique identification of objects such as paper currency and product labels.
CrossID, Inkode, Pharmaseq, RF SAW, and Tapemark are just a few developers and
suppliers of chipless tag technologies and solutions.

When it comes to major advancements in IC-based tag design, Smart Active
Label (SAL) technologies are gaining momentum in the market. SAL offers
enhanced range and accuracy attributes while being less vulnerable to liquid or metal.
With packaging similar to passive tags that are used in flexible mediums, such as
labels, SAL is essentially a semi-active tag with a power source in the form of a thin,
flexible battery. Using SAL labels, tagging and detecting cans of soda and bottles containing
liquid can become more practical and economical.

Tag Packaging

Tag packaging plays a significant role in the applicability and practicality of specific
uses of RFID. Expect to see tag and antenna packaging designs that will continue to
push the envelope of creativity and ingenuity, much as injectable and ingestible tags
have done in the past. Chipless tags based on nanotechnology will certainly be at the
forefront of such developments.

Another entirely different approach to tag packaging that is very promising is
related to printed electronics. This involves the process of “printing”, antennae, transistors,
or even integrated circuits using conductive ink and standard printing processes.
The potential to inexpensively print a tag onto a box or the packaging of an item
unlocks a new set of possibilities for the widespread application of RFID in everyday
items. Already, a company called Precisia has designed a smart label RFID tag that
uses conductive ink-instead of copper-for its antenna.

Sensory Tags

Tags whose packaging integrates them with sensors can monitor, record, and even
react to all sorts of environmental conditions. Known as sensory tags, these tag types
promote an entirely new set of applications. The major advancements here will be
around the coupling or combining of RFID tag technology with sensor technology in
very small form factors. Smart Dust is one such combination that offers the functionality
of tiny environmental sensors known as MicroElectroMechanical Sensors
(MEMS) with active RFID tag-like capabilities. Each such device is expected to be
one cubic millimeter in sizei. The potential applications of this technology span a
wide area, from monitoring battlefield activities in a military operation to tracking the
facial movements of the disabled to control their wheelchairs.

Architecture for the New Network

RFID systems generate mountains of new data that need to be synchronized, filtered,
analyzed, managed, and acted upon, often in real-time or near real-time. Each tag is
essentially a single computing device, albeit a very simple one, that acts as one node
in a network of, eventually, billions or even trillions of such devices. This new network
is dramatically different and in many ways more complex than even the Internet, the
most complex network ever known. This fact is due primarily to the number of nodes
that could exist in the expanded model of a worldwide RFID network, which figures
to be several orders of magnitude larger than the number of nodes on the Internet.
This simply means that traditional computing architectures and infrastructures will
not be adequate to handle the dramatically higher data volumes expected in such a
network. Next, we discuss two different approaches under development that address
these new requirements, from both the hardware and software viewpoints.

Microprocessor Design

Several computer giants are revising their microprocessor development roadmaps in
favor of a new microprocessor architecture called Chip Multi-Threading (CMT).
One of the pioneers in this area is Sun Microsystems which has already introduced
the first design of this new architecture. This is just in time for the expected volume
spike from RFID data as the US Department of Defense (DoD) and major retailers
around the world go into full deployment mode with their RFID mandates. Simply
put, CMT architecture bucks the trend of traditional microprocessor design and
architecture that primarily seeks to perform single tasks faster and faster. Instead,
CMT is an architecture that allows the efficient execution of many tasks simultaneously.
This is parallel computing taken all the way to the core of the microprocessor.

Peer-to-Peer Computing

Although the data generated by RFID systems can easily reach trillions of bytes that
need to be processed almost instantaneously, in fact, much of the data is disbursed
across one or more enterprises, and often, across the globe. This suggests that local
processing of data, by RFID readers, before passing it along to a centralized computer
can dramatically reduce the burden placed on centralized computing resources.
This is an excellent scenario in which to apply Peer-to-Peer (P2P) programming techniques
to perform RFID-related data processing locally. P2P technology is a type of
distributed computing technique that decentralizes computing tasks across several
less powerful cooperating computers (peers) within a network.

Expect RFID readers to become increasingly more intelligent. Readers will per-form
many of the data processing, analysis, and management tasks within a local net-work
of cooperating tags and readers. They will accomplish what today is mostly done
by centralized computers.

Falling RFID Tag Price

With RFID technology, cost of components, especially cost of individual tags, will
play a major role in determining its ultimate success and ubiquity. From an economic
perspective, the cost of tags is expected to continue to drop as the volume production
goes up to meet demand. However, both alternative chipless tag designs and
advances in fabrication and manufacturing of integrated circuits (IC) are expected to
drive the cost of tags dramatically lower. The 5 cents tag, as it has been called, has
been widely viewed as the inflection point where wide adoption of RFID will quick-ly
occur. To be clear, the supply and demand equation alone is unlikely to drive the
price of IC-based tags down to the 5 cents mark. Today, tag prices barely dip below
25 cents, even with existing high volumes. Therefore, alternative tag designs and
more efficient tag manufacturing are likely to be important factors in driving the cost
of tags down by another factor of five.

Business Process Innovations

As we’ve already discussed, for a technology to succeed and proliferate in today’s
world, it must be economically viable. In other words, it must enable businesses to
meet one or more of their primary economic needs: reduce cost, increase revenue,
and provide a competitive advantage. These objectives compel enterprises to innovate
by examining existing business models and processes and reinventing or realigning
them to fully take advantage of a new technology. We have just scratched the surface
in business innovation that takes advantage of RFID technology.

Much of the impetus for future waves of innovation in RFID can be credited to
the mandates set forth by major retailers around the world and the U.S. DoD. These
mandates have created a ripple effect across the entire supply chain industry.
Mandates have caused all supply chain partners including manufacturers, packagers,
distributors, logistics and transportation agents, retailers, and wholesalers to examine
ways in which they can improve the efficiency of their own supply chain systems.

RFID technology is already gaining good traction in certain areas of the supply
chain such as warehouse management and inventory control. However, we are far
from a fully integrated supply chain model. Although many technology and business
leaders across supply chain enterprises agree that RFID offers tremendous promise,
some argue that their short term return on investment (ROI) do not justify the initial
cost of adoption-process re-engineering, re-tooling, and integration. Others are hesitant
to make decisions without stronger standards, and most worry about privacy and
related public relations issues. Despite these concerns, analysts have predicted
tremendous growth for RFID in supply chain management during the next several
years. For example, Venture Development Corporation expects the global shipments
of RFID systems in manufacturing, logistics and retail markets to reach $4 billion in
2007, up from $1.25 billion in 2004 (2).

In the following sections, we examine the most critical business innovation trends
in the supply chain. These will lead the way to RFID’s ultimate deployment across the
entire supply chain, starting with raw materials, all the way through to the checkout
stand at your local retail store.

Item-Level Tagging

Item-level tagging is arguably the final frontier for RFID deployment. This concept
permeates almost every type of supply chain application. However, from a practical
standpoint, item-level tagging is fraught with challenges. On the consumer side, a
number of security and privacy issues create concerns and will impact its pace of
adoption. From the perspective of cost-effectiveness, the sub 5 cents tag will be key
before the potential of item-level tagging can be realized. Although several pilots are
under development already-for example, in large specialty retail and drug store out-lets-
expert and analyst opinion on the pace of adoption varies. Estimates of when
item-level tagging at the retail store level becomes commonplace range between the
years 2010 and 2020. Expect a slow but steady pace toward the item-level tagging of
just about everything as the industry and consumers meet these challenges head on.

Third-Party Logistics Management

Retailers that are implementing RFID will have better and real-time visibility of the
goods they carry in their stores. This, in turn, will help them become more efficient
by enabling true real-time management of the links in the supply chain. Retailers may
be able to eliminate their own distribution centers and receive goods directly from
suppliers. Naturally, this will require suppliers to send goods more frequently, and in
smaller quantities, directly to a larger number of retail stores, thereby shifting the
equilibrium for handling and shipping costs. Expect third-party logistics (3PL) management
services to include aggregation and distribution of RFID tagged goods.
Major transportation and logistics companies such as UPS, as well as smaller specialized
3PL providers, will play a significant role in this area.

Real-time Inventory Management

Inventory management happens at every level of the retail supply chain: at manufacture
time, during transport, around distribution centers and in warehouses, at both
wholesale and retail levels. The recent mandates by major retailers will compel sup-pliers
to continue to create new business models and applications that will not only
help the retailers but the suppliers themselves, within their own four walls.

Expect a continuous stream of new applications in the inventory management
area that offers new ways of making productive use of all the real-time RFID data.
Applications already emerging-for example, from Checkpoint Systems, Inc.-
include anything from real-time shipment processing and automated inventory
updating at the distribution center to more effective merchandising and speedy
point-of-sale operations at the retail store.

Business Intelligence

We’ve already seen how RFID enables access to lots of new data. The real value of
this data is in leveraging it to make better business decisions. The capability to ask
new questions or discover patterns in the data all provide more intelligence to a business,
improve its decision-making capabilities, and help it become more competitive.
Expect new data mining and analytics applications that help do that-by efficiently
filtering and analyzing data that has never before been so readily available.

IT Outsourcing

Implementing RFID applications by definition means deploying expanded, or in
many cases new, IT infrastructure. On the factory floor, in warehouses and distribution
centers, in transportation vehicles, and in retail stores, new computers, applications,
and RFID-specific components such as readers and antennae must be installed,
integrated, and managed. The owners and operators of these facilities are not always
ready and capable to handle this infrastructure by themselves. This creates many new
IT outsourcing opportunities, particularly in the area of managed services. Expect an
evolution of the already popular managed services model to include services that help
manage RFID-related infrastructure and alleviate the need to duplicate new IT infra-structure
when it can be avoided.

Real-Time Data Sharing for Total Supply Chain Integration

The highest level of efficiency in the supply chain occurs when all the participants in
the supply chain can share information in real-time, not just between two immediate
partners such as the supplier and the retailer. For example, consider a scenario where
a retailer is running out of a particular type of sneakers. In a typical RFID application,
the retailer would immediately detect this and order more sneakers from one of
its suppliers. However, if the manufacturer of the sneaker also had access to this
information, it could anticipate the demand and manufacture more of the same
sneaker. Similarly, the supplier of the raw material would ensure availability of the
appropriate material and the shipping partner would have immediate visibility into
when it would be expected to handle the transportation logistics. This might seem like
a far-fetched example, and today it is. The problem to be solved here is not so much
about RFID. It’s more about the serialization, synchronization, and complex integration
of data that needs to be shared among dozens of supply chain participants and
partners. RFID has simply opened the door to facilitate this opportunity by making
data more readily available and accessible. The recent RFID mandates in the retail
industry and the EPCglobal standards for RFID in the supply chain are powerful catalysts
that will continue to encourage enterprises to rethink their business models and
deploy new processes and applications that extend the benefits of RFID to all their
trading partners. Expect this scenario to develop gradually because the underlying
economics are still evolving and improving, and the ultimate value proposition to
businesses is often complex to articulate and implement.

Evolving Standards and Legislation

Standards and legislation will play a key role in shaping the future of RFID and its
applications. In this section, we discuss the key trends related to them.

Industry Standards

As we discussed in Chapter 4, “Standards Related to RFID,” EPCglobal established
and supports the Electronic Product Code (EPC) Network as the worldwide RFID
standard for immediate, automatic, and accurate identification of any item in a sup-ply
chain. Similarly, ISO has been developing RFID standards in several industries
for two decades. Other local standards bodies and standardization initiatives are
developing RFID-related standards in specific industries (for example, livestock),
around certain technologies (for example, Smart Active Labels), and even relevant
only to certain countries (for example, China). Although the moves toward RFID
standards definitely constitute a trend, its evolution is far from complete. The process
of developing standards is slow and includes review of opinions from industry participants.
Vigorous and sometimes contentious debate and even opposing standards initiatives
are often part of the process.

Government Regulations and Mandates

Government regulations regarding what items to monitor and report upon will serve
as protections for entire industries or large populations. For example, tracking and
reporting data about cattle might help to identify an outbreak of Mad Cow disease,
potentially saving the livestock industry of an entire country. Similarly, tracking the
pedigree of dangerous medication can prevent fraud and counterfeiting, potentially
saving the lives of numerous patients. Because society as a whole is the beneficiary of
these types of applications, expect government agencies to provide subsidies that will
offset the costs individual businesses might incur. Although business will indeed benefit
from these applications, such benefits are often not always immediate enough to
warrant voluntary investment by businesses.

Privacy Related Legislation

RFID’s weakest link (from a supply chain perspective) exists between the wholesaler/
retailer and the consumer. There are two reasons for this. First, a consumer
does not necessarily have, or may not know of, a compelling reason to link one’s identity
and purchases to the rest of the supply chain. Secondly, consumers may have
compelling reasons not to share this information. There are a number of ways that
enterprises can foster trust and ways that consumers can benefit from connecting to
the supply chain, as discussed in Chapter 10, “Security and Privacy.” We can expect
continued discussion and debate around RFID privacy from consumer advocacy
groups, vendors, and lobbyists. Governments will be pressed to impose new privacy
legislation to calm consumer concerns. Their challenge will be to balance the public
and business interests.

Consumer Application Innovations

Consumer enthusiasm is a critical factor for the ultimate ubiquity of many technologies.
The driving force behind creating such enthusiasm is application innovation that
captures the consumer’s interest and imagination.

In Chapter 1, “A Better Way of Doing Things,” we described a number of RFID-enabled
applications that directly benefit consumers. They include: access control,
people monitoring, electronic toll collection, payment and loyalty, patient care, sports
timing, and many others. RFID and its applications are all around us, and innovations
frequently occur. In April of 2004, VIP patrons of the Baja Beach Club in Barcelona,
Spain, received’s syringe-injected RFID tag implants. This enabled them to pay for
their drinks automatically, without reaching for their wallets-and they also enjoyed
free access to the VIP area making them permanently “cool.”

Elsewhere, a company called has introduced tagged golf balls that can be easily
located using a lightweight handheld RFID reader around the golf course.

Expect vendors to continue to capture our imagination and get us hooked on
RFID by introducing interesting, creative, and original applications.

Summary

Thirty years ago, it was hard to imagine that anyone could do their Christmas shopping
with a few clicks on a computer keyboard. Today, millions of people Christmas shop
from the comfort of their personal computers at home. We now take for granted new
conveniences of the Internet; using our computers to communicate with our peers half
way across the globe or instantly selling shares of an underperforming stock we just
read about moments before. However, back in the 1960s and 1970s, computers were
only used by corporate giants or governments to perform complex mathematical tasks.
The concept of networks and the possibility of connecting computers together to help
make everyday life more convenient was only a vision of a few elite computer scientists.
They recognized the inevitable as a function of economic feasibility.

Now in a rapid growth phase, RFID technology holds similar promise and will
become as ubiquitous in our everyday lives as the automobile or the wheels that move
it. This will happen as RFID technology continues to provide an undeniable value
proposition and help reduce cost and increase revenues for businesses using the
technology. Thus, the question of mass adoption of RFID becomes a matter of
answering the following questions:

• Can RFID enable new profitable products and services?
• Can RFID help improve existing business functions and operations?
• Can RFID help increase competitive advantage?
• Can RFID provide more value-added services and products to the consumer?

The answer to all these questions is, of course, yes. Today, we are well underway
toward the ubiquitous adoption of RFID technology. There are already hundreds of
millions of tags used in our everyday life-from tags in our car keys to tags around our
luggage handles. We use RFID technology when we enter our office buildings or
when we pump gas. We use RFID in our hospitals and in marathon races. The next
phase for RFID is adoption within the supply chain, the supply chain of anything that
ends up in a retail store-bottles of cough syrup, boxes of cereal , children’s toys,
office equipment, furniture, and so on. The retail store is the last stop for true mass
adoption of RFID technology. The journey there requires many steps and will take
some time as the economics continue to become more favorable.

Ultimately, RFID will achieve its full potential, as have other great technologies.
It will usher in a new economic, business, and consumer revolution much like the
automobile did when in 1914, Henry Ford opened the world’s first automobile assembly
line and revolutionized the face of transportation as we knew it.

Resources

(1) Source: University of California, Berkeley: How Much Information 2003?
http://www.sims.berkeley.edu/research/projects/how-much-info-2003/
(2) Source: Venture Development Corporation. Used by permission.

About the Authors

Manish Bhuptani is President and co-founder of Cleritec Systems. Prior to Cleritec he was Director of Market Development at Sun Microsystems where he grew Sun’s market presence in emerging and established markets. He has also worked as a management consultant at A.T. Kearney where he advised Fortune 500 companies on business strategy, and as a software engineer at IBM. He holds an MBA from the University of California, Berkeley, an MS in Computer Engineering from Purdue University, and a BE in Electrical Engineering from The Cooper Union.

Shahram Moradpouris CEO and co-founder of Cleritec Systems based in Silicon Valley. Cleritec provides RFID solutions for manufacturing, retail, and healthcare companies. Prior to Cleritec, Shahram was Senior Director of Market Development at Sun Microsystems where he oversaw Sun’s alliances with more than 450 partners. He also sponsored and directed numerous emerging technology projects with Fortune 500 companies. He holds Master and Bachelor of Science degrees in Computer Science from UCLA.

About the Book

RFID Field Guide: Deploying Radio Frequency Identification Systems

By Manish Bhuptani and Shahram Moradpour

Published by Prentice Hall Professional Technical Reference
February 2005, Softbound, 288 pages, Retail price: $39.99
ISBN: 0131853554

This material is from Chapter 1 of the book.