THE move towards radio frequency identification (RFID) in Australia has taken a major step forward with the allocation of a licence for 4W readers, up from the present 1W.
The Australian Communications and Media Authority has allocated the licence to GS1 Australia (formerly known as EAN Australia), a not-for-profit organisation responsible for the local development of RFID standards.
The award of the licence, as well as EAN’s change of name, was announced at the recent Impetus 2005 conference in Melbourne, which brought together many of the leading players in RFID technology.
An RFID tag allows for detailed tracking of items – either individual, high-value items, or containers or pallets – through every stage of a supply chain, providing important advantages over manual stocktaking or barcode processes.
The tags – essentially a programmable chip attached to an antenna – do not themselves have a power source but draw power from the readers.
The increase in power means that RFID readers can read tags from about twice the distance as the 1W readers, and with greater reliability. Portals such as dock doors are common positions for RFID readers, so the increase of coverage area is a major advantage.
Companies that want to use RFID readers will need to apply to GS1 for permission to use their site licence, and for each site that will use a reader.
There is some concern that the 4W readers, which will operate within the 920MHz-926MHz frequency range, could adversely affect the operations of Vodafone. To monitor this, GS1 Australia will compile a database of RFID users, aiming to show that the readers do not interfere with adjacent spectrum users.
Take-up of RFID technology in Australia has been slower than initially anticipated, but in the US and Europe there has been broad adoption in the past few years. Wal-Mart, Tesco and the US Department of Defence mandate that suppliers use RFID technology.
IBM’s chief architect for RFID, Doug Martin, told the Impetus conference that IBM was involved in about 40 pilot programs last year and is currently working on over 100 projects. IBM has generated over 50 of the key patents behind RFID and uses the technology extensively in its own semiconductor facilities and for asset tracking.
“RFID technology has matured to the point where it is being deployed by the world’s top retailers and consumer product suppliers,” he said. “Companies that hold back risk being passed by more agile and efficient competitors. This is already happening in the US and Europe, where the technology has given early adopters a major lead by lowering costs, cutting error rates, and providing new business intelligence advantages.”
Speaking with Manufacturers’ Monthly, he accepted that entry costs can be an obstacle for small companies, but pointed out that initial costs were often recouped by a decrease in ‘shrinkage’ – the number of items lost, spoiled, or misdirected in transit. He also noted that the US Department of Defence offers various forms of discount to suppliers using RFIDs.
Australian companies such as Maraitis Fresh, Amcor, Visy, DHL and Collex have, says Martin, recorded crucial improvements in supply chain efficiency with RFIDs.
The agricultural sector is emerging as a key driver of RFID adoption in Australia, with tags on cattle being required as part of a National Livestock Identification Scheme. The identification system will soon be extended to sheep. Regulators see RFIDs as a means of being able to quickly track any contaminated produce back to its source.
Around the world, much of the move to RFIDs has been led by retailers. In Australia, Coles Myer has begun to implement an RFID-based logistics system, but other retailers are more circumspect. Peter Roebers told the Impetus conference that Woolworths saw RFID technology as “interesting” and was monitoring its development, but adoption was not an immediate priority. Instead, he said, Woolworths planned to continue its focus on standards to improve supply chain management.
Despite this note of caution, GS1 CEO Maria Palazzolo urged Australian companies to understand the advantages offered by RFID.
“The message for suppliers and retailers is: don’t wait until the technology is mandated on you, put yourself in a position of leadership,” she said. “Companies that have taken the initiative with RFIDs overseas have won much greater business benefits than those who have been forced to play catch-up.”
She also noted that RFIDs are becoming a key element of international trade, with development of industry-driven standards for the Electronic Product Code, and the integration of the Australian system with the international structure. This, she says, underlies the transition from EAN Australia to GS1, with the body becoming part of a new international body with 155 member country organisations.
“It is the evolution of a body once focused purely on standards development into an organisation serving the needs of members striving towards best-practice supply chain management,” Palazzolo said.