When it comes to RFID, many people immediately think about the cost of tags, domestic standards, and other challenges. The following is an analysis based on my personal experience and additional research, highlighting common issues encountered in RFID projects. If there are any inaccuracies, please feel free to correct me.
Are you using RFID in a closed-loop or open-loop system? Enterprises that adopt RFID can choose between two main application models: closed-loop and open-loop. A closed-loop system refers to internal use within a company, where the organization has more control over the process and may not need to follow external standards. In contrast, an open-loop system involves the entire supply chain, requiring collaboration with suppliers, manufacturers, third-party logistics, and retailers. While open-loop applications offer significant benefits, they are more complex and costly to implement. For example, major retailers like Walmart have implemented open-loop RFID systems, requiring suppliers to use RFID tags on every pallet sent to their stores.
RFID standardization remains a critical issue. The technology spans various areas, including radio frequencies, data formats, and encoding standards. Although no single global standard exists, multiple standards coexist in the market. However, as RFID gains traction in global logistics, standardization efforts are increasingly recognized. RFID systems typically consist of two parts: data acquisition and back-end database network applications. Standards for data collection—such as air interface protocols, tag-reader communication, and performance testing—are being developed. Meanwhile, the back-end systems still lack formal international standards, with only industry alliances offering some guidelines.
The core of the standard debate centers around data coding for RFID tags. Five major organizations represent different regions and interests globally. EPC Global, supported by companies like Walmart and Procter & Gamble, has strong influence due to its North American and European membership. Other groups, such as AIM, ISO, UID, and IP-X, represent different regions. Currently, the UHF frequency band (860–960 MHz) is widely used, and China is considering adopting the 917–925 MHz band. However, since most domestic RFID applications are still closed-loop, standards are less of a barrier at this stage.
Barcodes and RFID will coexist for the foreseeable future. RFID tags are currently more expensive than barcodes, ranging from 20 to 25 cents, though costs are expected to drop significantly in the next few years. Therefore, RFID is unlikely to replace barcodes in the short term. Most RFID projects today include both technologies, with RFID tags and barcodes used together. This requires both RFID readers and barcode scanners, as well as systems that handle the conversion between EPC codes and traditional barcodes. Companies like Intelletto have developed solutions that allow seamless integration of both technologies.
Should you use EPC coding or custom coding? RFID tags can store data in various formats, with GEN1 and GEN2 supporting up to 128 and 256 bits, respectively. While EPC codes are commonly used, companies can also define their own data structures. It's typical to store only a unique identifier on the tag, with full details stored in a backend database. Some systems store data directly on the tag for immediate access, while others rely on database queries to retrieve information.
Achieving a 100% recognition rate is challenging, but not impossible. Through careful process design and data compensation techniques, high accuracy can be achieved. The real value of RFID lies in how effectively the data is used. Integrating RFID with ERP, CRM, and BI systems allows businesses to gain insights, automate processes, and improve efficiency. HP’s experience shows that the more times RFID data is used across the supply chain, the greater the return on investment.
RFID middleware plays a crucial role in managing data flow between hardware and software. It acts as a bridge, handling interactions with RFID readers, printers, and other devices. Middleware helps streamline operations, reduce complexity, and ensure smooth integration with enterprise systems. As RFID networks grow, middleware becomes essential for managing large numbers of devices and optimizing data collection.
Cost considerations often focus on RFID tags, but the total project cost includes hardware, software, system integration, and process optimization. Reusable tags, such as those used for containers or pallets, can significantly reduce long-term expenses. Studies show that, when considering lifecycle costs, RFID can be more cost-effective than traditional barcodes. Companies should look beyond just tag prices and consider the broader benefits of RFID implementation.
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