THE ability to track individual items through the supply chain from the manufacturer to the consumer is seen as one of the key benefits of RFID (radio frequency identification). It is this feature however, which is at the heart of misinformation about the technology that continues to fuel some consumers’ privacy concerns.
Electro-com’s managing director, Chester Lennard told Manufacturers’ Monthly suppliers and other stakeholders were working hard to settle privacy issues and lay concerns to rest.
“It’s been mainly an education process. I think the safeguards are already in place to ensure that individuals’ privacy is not breached through the use of the technology. It has really been just a matter of trying to overcome the hype that surrounds the technology. There have been a lot of false claims about what the technology can do and can’t do and I think that has really driven a lot of those privacy concerns,” Lennard said.
“Some of the articles that have been circulating, on the Internet in particular, imply tags can be read at several hundred metres. And the public in general, because they don’t really understand the technology, immediately assume that tags that will be used on supermarket shelves with the capability to be read at great distances, and will contain all sorts of personal data about the purchaser. Of course none of that’s true.”
Lennard says tags deployed at retail level would be inexpensive and low performance. “They would contain nothing but a serial number similar to a barcode, and would hold no personal information about the consumer,” he said.
SAP’s spokesman on RFID and director marketing resource centre Asia Pacific, Len Augustine, agrees that in reality the technology creates no great issues for consumer privacy.
Augustine told Manufacturers’ Monthly SAP has formed an “online community” on its website devoted to discussing RFID use. In December the company also hosted a forum in Brussels on RFID at which European Union leaders, including members of European parliament, the European Commission and academics, discussed the technology.
“Our role is really to promote that discussion in an open forum so that people do understand if you don’t want the data to carry over into your home environment you can turn off the tag that has been tracking the goods through the supply chain, the retailer and the manufacturer,” he said.
In some cases, however, Augustine claims consumers may want to leave RFID tags active after purchase.
“We have a drug company in the US that has put RFID tags on one of their drug products that has a mandatory requirement from the government to be tracked everywhere. It is such a high class narcotic in its own right that companies have to know where every one of them is at any time in the supply chain. Companies may want to leave that tag intact all the time,” he said.
RFID could also provide other business benefits such as reduced shrinkage and increased availability of products in-store.
“In the consumer products supply chain...companies can get better deliver of product to the right place and keep the consumer happier and secondly they can stop shrinkage of product through theft and loss. In many cases the product is where it is meant to be but people just don’t realise it’s on the back shelf,” he said.
Product recalls would also be easier to manage. “In the old system where you basically just had barcodes on things they might have expiry dates...but there is no easy way to know where all those goods originated from and whether they came from the factory you suspect might have [necessitated a recall] or whether it is just an isolated incident of in-store tampering that might have occurred for example.
“It’s going to save a lot of money in those industries where consumer recalls of product are not only done, but have to be done right,” Augustine said.
Lennard agrees individual companies must define the benefits of RFID for themselves, especially in Australia where there have been no major end user mandates on suppliers to implement the technology.
He encouraged manufacturers to research and pilot the technology. “But be a little bit cautious in doing it and make sure you’re working with the right people because I think it would be quite easy to get your fingers burnt at this point,” he warned.
“The biggest challenge will be in comprehending what the technology is really capable of delivering, so sorting out the hype from the reality at a performance level. The second biggest challenge once the manufacturers have a grasp of what the technology can really do for them will be finding an integrator that is capable of providing a turnkey solution to them,” Lennard said.