“Truth in Technologies 2004:  RFID & Bar Codes”

October 20, 2004 at Stony Brook University; Stony Brook, NY

AIDC 100’s no-holds-barred, highly interactive conference on RFID & Bar Codes was held at Stony Brook University’s Charles B. Wang Center on October 20.  The following paragraphs highlight some of the presentation content, but cannot do justice to the substance provided or the electricity generated in a number of spirited exchanges between speakers and attendees throughout the day. Session facilitators, Dr. Daniel Engels, Research Director at MIT’s Auto ID Labs and John Hill, Principal at ESYNC, were kept busy balancing the endless flow of questions with the objective of allowing speakers to make it through their entire presentations.  The bottom line? The rumors of bar coding’s demise have been greatly and sadly exaggerated. RFID is coming; in fact, for many container and high value item identification applications, it is already here.  Nonetheless, a number of challenges, both technical and political, must be resolved before we can expect to see widespread deployment for item, case and pallet identification in the global supply chain.  And, even when the challenges have been addressed, it is clear that the technology will not fix poorly conceived business processes or infrastructure. The message for users?  If you have not done so already, initiate your investigation of RFID in a measured fashion that articulates specific objectives, identifies opportunities that cannot be addressed with other AIDC technology and establishes a supportable value proposition for moving forward. And certainly, at this juncture, don’t even think about throwing the bar code baby out with the bath water!

Dick Meyers, AIDC 100 chairman, welcomed attendees and opened the program by acknowledging the great promise of RFID for the supply chain, but he quickly added that it will be many years before bar coding disappears.  He expressed the hope that the forum would provide a clear vision of where the two technologies fit within the supply chain, while laying the foundation for leveraging the lessons learned during the early days of bar coding to accelerate development and cost-effective application of RFID.  Emphasizing the importance of open and honest dialogue between trading partners, he urged attendees to focus on building a business case for RFID deployment based upon proven performance capabilities, not speculation.

Kathy Smith, Special Assistant for End-to-End Customer Support in DoD’s Supply Chain Integration organization, is responsible for developing policy for RFID implementation.  Her presentation, which highlighted DoD’s experience with RFID for container and high value item tracking since 1994, stressed the importance of optimizing the supply chain business process to leverage the potential of any technology.  RFID’s ability to provide asset visibility from source to the battlefield is a critical component of DoD’s knowledge-enabled logistics program.  Kathy outlined DoD’s requirement for EPC-compliant supplier tagging of specific item cases and pallets shipped to two locations (DDSP & DDJC) beginning in January 2005, expanding to all items and locations by 2007. Program details can be found at www.dodrfid.org/supplierimplementationplan.htm.  

Mark Reboulet, USAF, “Radio Frequency Identification (RFID) and the AF Passive Military Shipping Label Test”,  presented an overview of RFID technology deployment and testing in the Air Force, including an excellent example of the complementary use of bar coding and RFID for munitions tracking.  Bar codes attached to individual munitions are scanned as they are loaded into a container and the data is transferred to an active 433 MHz RFID container tag for container tracking.  This month the Air Force will be tagging container shipments to Ramstein AFB (Germany) to evaluate technology performance through the extended supply chain.  Additionally, an RFID-based real time locating system (RTLS) has been installed at Robins AFB.

Steven Braun, Hospira, highlighted the critical role bar coding plays in reducing errors in hospital medication dispensing and then outlined his company’s approach to using the technology as well as its value as a competitive differentiator.  Among the many points made in Steve’s presentation, Hospira’s formation of a multi-disciplinary team to assess bar coding options, select the symbology (RSS) and craft a deployment plan was particularly noteworthy.  He also emphasized the importance of standards that address the requirements of specific applications in specific industries for specific types of products.  Although Hospira’s bar coding program is delivering a significant return on investment, Steve indicated that the company is also looking at “ready today” applications such as patient, controlled product and high-value equipment location tracking.  He added, however, that the FDA must clarify its position on the technology to drive industry adoption and predicted that measurable ROI is likely to be eight to ten years away.

Dr. John Hamilton delivered the luncheon keynote on Business Strategy and the RFID Challenge.  Dr. Cook, who serves as        Associate Director of the Consortium for Supply Chain Management at the John Cook School of Business, St. Louis University, echoed other speaker calls for sanity in assessing RFID’s potential          as a supply chain performance improvement enabler.  The process, he said, must begin with a clear understanding of the RFID value proposition, including how the technology might contribute to short and longer-term competitive differentiation. He, too, agreed that RFID will not replace bar coding and that the two technologies will continue to co-exist for some time to come.

Jim Dean and Dick Pocek of Energizer Holdings, Inc. built a strong case for working with a third party logistics provider on RFID testing and deployment to ready the company for initial compliance with the Wal-Mart mandate, while minimizing the technology’s potentially disruptive effect on regular operations.  Partnering with Exel Logistics, Energizer has conducted extensive tests of RFID performance on various carton types, the effects of tag placement and orientation as well as different tag and antenna configurations. Seeing significant downstream potential for RFID in manufacturing, warehousing, container and yard management, reverse logistics, asset tracking and, eventually, at the point of sale, Energizer’s approach has enabled them to meet initial requirements, reduce risk and keep their options open for broader deployment as the technology evolves.

Richard Rees, President of Scanology (Edinburgh, Scotland),  and John Greaves, Deloitte Global RFID Technology Integration, addressed the question “Is EPC Really Global”, suggesting on the one hand that the concept is certainly “global”, but on the other that there is considerable work to be done to ensure that standards are harmonized to facilitate, rather than constrain its exploitation.  Citing the fact that 70% of EPC’s current membership is from the USA, Rees stated that EPC is “not yet global” and won’t be until specification issues are resolved with ISO, the International Standardization Organization, and other stakeholders including the Chinese.  Greaves concurred, but cited broad overseas disinterest in EPC and the failure of the European and Asian vendor communities to proactively address it as a major hurdle.  Both speakers emphasized the importance of investigating the likely impact of the flood of RFID data upon existing communications networks and IT infrastructures, urging prospective users to begin such investigation now.

Craig Harmon of Q.E.D. Systems tells it like it is!  And, it was difficult to quarrel with his perspective entitled The Emperor Has No Clothes, a comprehensive review of RFID technology, standards, intellectual property and related issues.  Craig provided an in-depth examination of the technical and political challenges and minced few words on current performance issues and the fundamental importance of standards.  Must reading for neophytes and practiced hands, the presentation concluded with the prediction that the 860 to 960 MHz bandwidth for passive tags and 433 MHz for active tags coupled with global endorsement of ISO 18000-6 and 18000-7 standards would prevail.  He further suggested that both DoD and Wal-Mart will drive EPCglobal to détente and proactive collaboration with ISO – and that the RFID market will grow at a rate of 30 to 35% through 2009.

Tom Miller, President of Intermec Technologies Corporation, Mike Lowry, President & CEO, Lowry Computer Products, Kevin Jost, President & CEO, Hand Held Products and Steve Lambright, Vice President of SAVI Technology, teamed for a panel discussion on the subject of the provider’s perspective with particular emphasis on  “Are user expectations realistic?” and “Is the RFID channel ready to provide the services needed?”.   From the discussion, with the notable exception again of applications in manufacturing, container and high-value or mission-critical item identification, it appears that RFID channel investment is being approached cautiously. Issues related to building a resource pool, both technical and sales related, appear to be significant – and, with performance and standards issues still in flux, it is difficult to plant a stake in the ground. “The promise is there, but none of us is making any money on the Wal-Mart program.”

Mark Roberti, founder and editor of the RFID Journal, provided an insightful wrap-up on the day’s presentations acknowledging that although the media can on occasion be faulted for oversimplifying the challenges associated with the introduction and adoption of new technology, it plays a pivotal role in providing the visibility essential to building awareness and demand.  He then challenged attendees, particularly suppliers, to look for opportunities to continue the dialogue initiated at Stony Brook to ensure broader understanding of the potential as well as the limitations, not only of RFID, but also of other AIDC technology and systems.