AT a conference on product identification in Sydney last month, speakers declared the imminent arrival of radio frequency identification (RFID) as “ the dawning of a new age” and as “a revolution”, but then disagreed on how quickly this new technology is likely to be implemented.
Speakers agreed that RFID will be applied first to pallet loads and outer cases as retailers use it to further improve the logistics of their grocery distribution centres and transport.
But whether the widespread use of the technology in this application is one year away or three years away, speakers could not agree.
And the universal application of RFID chips on primary or retail packs is five to 10 to 15 years away, depending on who you are talking to.
This extended use of RFID would largely depend on the cost of the chips themselves. Professor Harry Lovell said the current cost of 20 the 25 cents apiece was prohibitive, but if 50 billion units were being used annually by 2010, this could bring the unit cost down to a more acceptable 0.1 of a cent. Others thought it could take much longer.
Meanwhile, it became clear that in Australia, final technical standards have not been decided in some areas and probably won’t be before the end of this year. One of the frequencies RFID suppliers want to use is very close to the frequencies used by mobile telephones and there will have to be negotiations with government departments over that.
However, it seems likely that these matters will have been resolved by early 2005 and many expect the retailers, who are already involved in trials with a number of key manufacturers, to start discussing implementation timetables shortly after that.
The retailers, who were not represented at last month’s AIP conference and who have played their cards fairly close to their chests, apart from a brief announcement about the joint trials, are likely to become more visible about the time Wal-Mart in the US meets its January 31, 2005 deadline for all inwards cases and pallet loads to carry RFID codes. As of last month, Wal-Mart was confident of making that deadline, despite some earlier hiccups in its trials.
The attitudes of most speakers at the conference ranged from positive to gung-ho, with concerns about privacy, for instance, being dismissed with barely any debate.
Mark Gentle, director of sales and marketing for Checkpoint Meto , for instance, said the privacy debate issue was no issue at all. People’s buying patterns and preferences and much more were already being tracked in detail through credit cards, store card accounts and loyalty programs among others.
“Combined with the Internet, these systems have already reduced the privacy of most consumers, in terms of their purchasing preferences, or are capable of doing so. By the time we get RFID tags on retail packs, the ‘privacy battle’ will have long since been lost at that level.”
As for paranoid fears of Government using RFID tags to penetrate the family home and spy on people, Gentle and others pointed out that depending on the frequency used, RFID tags would have a range of between about two and six metres.
“Because they did not require line of site to be read, people have erroneously gained the impression that the tags can be read from a distance. This is not rue and is never likely to be,” a speaker said.
Gerry Wind of Amcor concurred and said much of what was written in the media about RFID bore little resemblance to reality.
“RFID is the next big phase in the information age. It is going to revolutionise our world,” Wind said.
Professor Lovell said that the industry should be pointing out some of the additional benefits to consumers of RFID tags on retail packs. The technology, for example, could be used to monitor freshness and an RFID chip could be developed to orally inform the vision impaired of use-by dates and other variable information.
Speakers were repeatedly asked about the benefits to manufacturers, who will bear the cost of putting tags on their pallet loads and cases as opposed to retailers who will gain all of the benefits including shrinkage reduction, elimination of shipping errors, better labour productivity, asset tracking and improved on-shelf availability.
Checkpoint’s Gentle pointed out that elimination of out-of-stocks also benefited the manufacturer whose product might otherwise be out of stock.
Other benefits to manufacturers in the early stages of RFID were harder to find.