RFID is a proven technology with a long and interesting history. It has always been ahead of its time until recent years. Mostly due to high price, it wasn’t applicable for commercial use. As the price decreases, new opportunities for its utilization arrive. To talk about the future of RFID we should first understand its beginnings. Many people are not aware how old and mature this technology really is.

History of RFID

Like many of the world’s greatest inventions, RFID was invented for the purpose of a war. Its history begins in the Second World War with the Allies and the Axis, both having a goal to find the best strategy to beat the opponents and finally, win in the war.

Their armies had used radar to trace planes before RFID was invented. However, radar was not precise enough. It was impossible to tell the difference between enemy’s planes and country’s own planes. Clearly, it was crucial to determine which plane is approaching in order to have enough time to implement a defense plan.

Germans discovered that the problem could be solved if a pilot rotated his plane when approaching to the base. As a result, a radio signal reflected back would be changed. That would be a specific alert that a friendly plane was approaching. These ventures were the first examples of passive RFID systems.

This invention was a major breakthrough. Nevertheless, it had numerous drawbacks. German pilots had to lose a lot of time and energy to perform this action. Hence, the British army went one step further and put a transmitter on each British plane. Every transmitter could detect radar signals from the ground. When signals were detected, transmitter would send out a signal back. The broadcast signal was a confirmation that the plane does not belong to their enemies.

RFID technology has been developed and improved significantly since then. However the principle is still the same. Every tag has a transmitter that reacts to signals from a reader. When a signal from a reader activates a tag (in passive RFID system), the tag responds with a signal back to the reader announcing its identity.

RFID Today

A lot has changed since the first use of RFID technology. Undoubtedly, a lot of research and development was required to invent systems that are applicable for low cost commercial applications.

Probably, the first commercial application of RFID is the electronic article surveillance (EAS) systems. They sound an alarm if a person doesn’t pay for the product and tries to leave the store. Besides that, there are multiple RFID applications today including asset management, logistics, inventories and warehouses, access control, identification of animals, tracing surgical tools and patients – you name it.

In everyday life, people use RFID technology without even being aware of it. For instance, RFID systems are used in electronic public transport and toll payment. Moreover, contactless smart cards utilize RFID technology as well and almost everyone uses them today. RFID tags are used as anti-theft devices in cars. A car will not be started until the correct key code is recognized. Further, in sports events like races, the runners may have RFID tags attached to easy identify who the winner was.

Analyses and Predictions

Researches have shown that in the next decade we can expect the growth in the value of the global RFID market. Furthermore, it is expected that the middleware segment is going to register noticeable growth.

Prices of RFID tags have fallen significantly over the past decade. The price of a RFID label ranges between 7 and 15 cents, depending on the amount of the memory, the packaging of the tag etc. It is expected that the price of RFID tags will decrease further in the next few years. The goal is to have 5-cent tags when tags are massively manufactured. A decade ago, only large enterprises could afford this technology. However, after decreasing of prices, small and medium enterprises got the opportunity to introduce RFID to their supply chains and logistic operations as well. Having that in mind, it can be noticed that the demand for RFID technology has been continuously increasing.

A huge growth is expected in the retail sector. Various companies, which have already adopted RFID technology, have been experiencing both financial and operating gains. They assert that inventory accuracy has improved significantly. Other companies should try to keep track with them and RFID is the logical choice. RFID is definitely more efficient than barcodes. A lot of tags can be read simultaneously in contrast with barcode where only one label can be read at a time. As no line-of-sight is required, a tag can be read without any visual contact. With RFID technology, waiting in queues is skipped. All products from the cart are simultaneously scanned without the need to scan every product one by one. It saves the time of customers and retailers. More important, with RFID, a vast amount of information can be tracked, including quantities of inventories and a location of any product at any time. Using that information, companies can perform various analyses to improve their business.

The healthcare sector is another important sector for RFID technology. RFID tags are used for tracking and classification of medical instruments. Hospitals are able to trace every blood sample or medication. With RFID it is easier to ensure that patients receive the correct medications and medical devices. A lot of resources required for manual inventory could be used for some other activities and improvements. Some hospitals have been using RFID tags to increase efficiency of operating room and accordingly, decrease the time between when one patient leaves the operating room until the operating room is ready to receive another patient. They track patients and equipment needed in surgical process. The data they gather help them to have the required team of doctors/nurses and the required equipment ready in the right time. Consequently, patients get the necessary care faster which is very important. But the most important, human errors in healthcare processes are decreased. This is a sector where every human error is of a crucial importance. If we reduce the unintentional errors, safety of the patients will be tremendously increased. We can expect that most hospitals globally will start leveraging value of RFID very soon.

The utilization of RFID is increasingly growing in the aerospace and defense sector. The companies that use RFID have already achieved internal business benefits and want to promote this technology further to other companies. The improvements that RFID brings in asset tracking and supply chain management help to improve companies’ efficiency in manufacturing, to decrease the time necessary for plane repairing and to reduce the number of unapproved parts. Besides that, RFID is used for baggage tracking. In fact, The International Air Transport Association (IATA) has unanimously resolved to support the global deployment of RFID tracking for airline baggage. In other words, airlines have to replace barcoded bag tags with RFID tags and start to use RFID technology to prevent mishandling of passengers’ baggage. There is no timeline, but the plan is to use RFID in 80 percent of baggage in the next three years. Consequently, the demand for RFID readers and tags will surely grow in the approaching years in this sector.

The combination of RFID and blockchain technologies could do a lot of benefits in supply chain management. Since supply chains often involve many stakeholders, sharing a unique blockchain ensures the collected data are immutable and the exchanged goods are authenticated. As a result, the supply chain is prevented from potential frauds. Without a blockchain, the collected data could be changed by other users. Therefore, there is no completely reliable visibility over the entire supply chain. Once the data is stored in the blockchain, there is no way to change it or delete it. Reliable and verified information is accessible at any time from any of the stakeholders. However, to collect transparently this information, the physical items have to be connected with the digital world. That part can be achieved by using RFID. We can uniquely identify any item by putting an RFID tag on it. Data about the items are then automatically and transparently collected using RFID readers. The collected data, which contains reliable information about the goods used in the supply chain, is then stored in a blockchain. If RFID and blockchain technologies are used in supply chain management, human factor and intentional false information will be eliminated. Different stakeholders will be able to trust that the gathered and stored information is valid. Such a solution automates a significant amount of manual tasks, and thus spares time and money eliminating the lost assets and ensuring that staff focuses on more meaningful assignments. This combination of technologies can be applied in any industry.

Why RFID?

With all of this in mind, we can see that the future of RFID is still pretty bright. Although it is an old technology, it doesn’t plan to step away from the scene yet. Some new technologies are here, and some other may arrive, but they will hardly beat RFID in some application in the near future.

For instance, there are some newer technologies that may be used for asset tracking. One of them is Bluetooth low energy (BLE). This technology provides pretty good results in real time location monitoring. On the other hand, a BLE tags may cost 30-40 times more than passive tags and their batteries may last for only a few years. While tremendously useful in certain use cases, BLE technology is unlikely to replace passive RFID for a longer duration tracking and monitoring of asset life cycle. In the scenarios where tag price is the priority and tags are read at specific checkpoints, RFID technology will still remain the best choice. One should not be surprised when some other use cases for utilization of RFID technology appear. Indeed, scenarios in which RFID technology could be used are limited only by people’s imagination.

European Commission Workshop and harmonization of radio spectrum

On the 19th of June 2017 the European Commission held a workshop on efficient use of the 870-876 MHz and 915-921 MHz frequency bands. Participants were from various industry sectors (e.g. telecommunications, retail, railway, automotive) as well as national regulatory institutions and ministries. They all met to discuss how to use these bands most efficiently in the future. The bands are currently used for civil purposes (notably by railway systems) and in some countries for military purposes. The aim is to make the band available for IoT applications empowering smart homes and cities as well as industries. Some industries with interest are farming, logistics and transport.

On the 11th of October 2018 the EC has adopted a positive implementing decision to harmonise radio spectrum for short-range devices within the 874-876 and 915-921 MHz frequency bands. The implementation deadline for EU countries was the 1st of February 2019. The newly introduced 915-921 MHz frequency band can be referred to as the European Telecommunications Standards Institute (ETSI) upper band.

The EC states benefits for RFID devices

" RFID devices are already in use in Europe in the 863-870 MHz band to mark objects with RFID tags. For example, warehouses or factories use RFID readers, a technology which can read the tags and identify the objects. The new spectrum availability for next-generation RFID within the 900 MHz range allow enhanced technical limits, which has an impact on, for instance, reader speed, reader accuracy and tag size. However, equally important, the 900 MHz range is used almost globally for RFID, which is beneficial especially in transport and logistics.

Apart from the current usage, further advanced RFID use-cases will emerge. For example, the reduced size will make tagging of smaller objects or tagging of materials, which so far could not be tagged, possible. When using the old and the new band in parallel, it is possible to localise more accurately the tagged items.

The almost global availability of the 900 MHz range is not only beneficial for RFID systems, but will also enable new innovative global applications based on networked short-range devices, such as active global asset tracking."

Better and cheaper RFID tags

Additionally, this will open the path to a better global RFID tag design. Tags are designed with the trade-off of inlay size, supported frequency bands, performance and cost. With the harmonization of the 900 MHz frequency band, small tags with good performance that can be used globally become cheaper. Consequently, it could boost the RFID industry due to lower costs and wider range of applicable use cases.

Besides cheaper and better tags, the new band creates opportunities for new features supported by RFID readers. Using both ETSI bands could result in more accurate spatial positioning of tags. This, however, will require new hardware, including readers, antennas and other equipment. Most of the current ETSI-compliant hardware is fine-tuned for optimal performance in the lower band.

Increasingly, for more companies where logistics is crucial to the operations, RFID technology is fast becoming indispensable technology, almost just as much as barcode once did. Yet, a large number of companies and operations sit on the sidelines carrying the myths about the technology and waiting for a mythbuster to come along and shatter that.
Well, let me attempt

Myth: RFID doesn’t work 100%

RFID technology has matured over a decade into very reliable technology. When Walmart first started with RFID, it was a very different situation than what it is now. With right choice of tags, readers and software, 100% readability is not something anybody worries about in the RFID industry. If at all, the technology is so sophisticated now that a new challenge is actually to avoid inadvertent reads in some use cases. Right pieces of software in place create a digital twin of physical operations that can intelligently interpret containers (such as pallets and cartons) instead of individual SKUs, further reducing any doubts about 100% reads.

Myth: Active technologies will replace RFID

Passive (battery-less) RFID was born with the use case of logistics. It was imperative for tags to be inexpensive replacement for barcode and in form of labels costing few cents. In spite of hype surrounding it, Active RFID technology (such as BLE, Dash-7) are bulky battery powered tags, not printable, have a short life and cost many orders of magnitude more than passive. New technologies always evolve existing ones but one can confidently predict that in case of passive RFID, a replacement will likely not emerge in next 8-10 years. Are you going to wait for another decade before you start leveraging its benefits today?

Myth: I already am pretty sophisticated

You mean you have robots transporting goods? AI enabled vision? Congratulations, for embracing technologies and automating your operations. Yet, you aren’t really taking advantage of automated receiving, reconciliation, shipment verification, automated cycle counts other benefits that RFID has to offer. Something that matters more than anything else in logistics operations. On average, shipment accuracy between ASN (advanced shipping notification) and actual physical shipment today hovers around 5.8%. You can quickly calculate the RoI of automated verification of receiving and shipping alone.

Myth: Oh! We are different

Most head of operations believe that their company does business differently. Yet, all DCs, warehouses and 3PLs have the same set of components to run their operations such dock doors, conveyors, storage shelves, fork lifts and hanging rails. Even WMS applications from ERP solution vendors are essentially based on the common processes. Yes, your company might have other enterprise applications to integrate to, or incorporate a unique process but the foundation is essentially the same. RFID is just an enabler for automating the same set of operations and bringing close to 100% accuracy in your operations. Off the shelf RFID software, such as Tagit Trapeze, also doesn’t make assumptions about your operations and integrates directly into your systems and processes.

Myth: RFID is expensive

It used to be the case a decade ago and it was hard to justify investment at unit level tracking use cases. As RFID has matured into a highly reliable technology, just like every other semiconductor products, prices have decimated. In fact, I’d argue that if you incorporate the cost of inaccuracy and labor, barcodes are actually more expensive than RFID.

Myth: It takes too long to implement

Let me start by arguing that with omni-channel operations, logistics operations have become more complex than ever. In fact, you are already spending too much money in labor, cost of inaccuracy and missed opportunities to keep up with the complexity. RFID is already a necessity and the approach to implement it and migrate is simple — take baby steps. For example, you can start with storage inventory first and run it as parallel operation that just integrates with your existing WMS or IM applications such as SAP, Oracle or Manhattan. Second step could be to just focus on high value items and possibly just one dock door or just one class of items. Your existing business systems shouldn’t and don’t need to change, while you slowly migrate into higher accuracy, low touch physical operations one step at a time. At every step, you can show the management real value with real RoI such as prevention of wrong shipments and productivity by increased accuracy.