Many of RFID’s shortcomings are gradually being resolved as the industry’s vendors join together to make the technology more attractive to businesses. RFID standards covering agriculture, vehicle management, postal items and freight containers are at various stages of maturity. Industry observers are hoping that a basic support framework allowing interoperability between vendors’ products will take shape within the next couple of years. Costs are gradually coming down as the technology matures. Frequency conflicts are also becoming less of an issue, as vendors and government agencies work together to smooth out global differences. As a result, although an RFID boom isn’t in the wings, steady growth appears likely.

Businesses have much to gain by adopting RFID. The technology provides key information more efficiently than bar codes in a variety of environments (even in hurricanes and blizzards) with little or no human intervention. RFID tags can also contain more information than bar codes, making it possible to retrieve information about an asset’s type, configuration, version, location, history of location and maintenance, and other facts. The added speed and rich information provided by RFID can lead to significant savings. "Early implementations have shown a 3 percent to 5 percent reduction in supply chain costs and 2 percent to 7 percent increases in revenue from inventory visibility," says Peter Abell, director of retail research for Boston-based AMR Research.

The Technology

An RFID system consists of two components: tags and readers. Tags (also known as transponders) incorporate a chip and an antenna. Active tags, which include a battery, can transmit hundreds of feet and cost upward of $5. Passive tags are smaller, require no battery and usually have a range of only a few feet. Thanks to their simplicity, they generally cost less than a dollar.

Readers (sometimes called interrogators) communicate with tags to retrieve and, sometimes, write information to the tag. Readers are designed to work with a specific type of tag in one of the four RFID frequency ranges: 125kHz to 134kHz, 13.553MHz to 13.567MHz, 400MHz to 1GHz, and 2.3GHz to 2.48GHz. The reader also relays information into a database and other parts of an organization’s IT infrastructure.

The tracking implementation at eLSG.SkyChefs is a typical RFID setup. The trolley tracking solution uses an RFID transmitter tag secured on each trolley that’s scanned by readers at every catering location. Managers can then track equipment anywhere in the world via a Web application.

Simply Complex

Despite its many variations, RFID is a fundamentally simple technology. What isn’t so simple, and what has contributed to RFID’s slow progression into the mainstream, is its need to mesh with existing business systems and practices. Databases, networks, employee job duties?even warehouse layouts and production lines?must all be tweaked or entirely redesigned to accommodate RFID. "It really changes many business processes throughout the organization," says Gartner’s Woods.