RFID Technology. by: Mary Ainsworth. Copyright 2007, Faulkner Information Services. All Rights Reserved.
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1 RFID Technology by: Mary Ainsworth Copyright 2007, Faulkner Information Services. All Rights Reserved. Docid: Publication Date: 0711 Publication Type: TUTORIAL Preview Radio Frequency Identification (RFID) systems are now appearing in many systems and applications across enterprises and vertical markets. Spurred on by efficiencies and mandates from both private and public entities, the once obscure RFID technology of just a few years ago, is now becoming the preeminent method to meet the growing demand for tracking and identify assets and products throughout the global supply chain. Report Contents: Executive Summary Description Current View Outlook Recommendations Web Links Executive Summary Although Radio-frequency Identification (RFID) is not a new technology, since 2003 its use has grown, based on mandates from the military and retailers. In that year, the US Department of Defense and Wal-Mart mandated that all of their suppliers use RFID technology. What is RFID? RFID is a subset of Automated Identification (Auto ID) technologies that uses radio waves to track items, animals, and humans. A typical RFID system is composed of a tag (a microchip/antenna transponder with embedded data) and a reader, which reads the content of a tag within its frequency and proximity range. RFID's tracking capabilities have been embraced by the military, manufacturing, and retail industries. Thousands of companies around the world utilize RFID to
2 improve internal efficiencies with applications such as tracking goods in the supply chain, tracking reusable containers, high value tools/assets, and parts moving through a manufacturing production line. Security is another RFID capability; it's used to control access to countries, facilities, and networks as well as to payment systems that allow customers to pay for items without using cash. In spite of its wealth of current and potential applications, return on investment (ROI) for many early adopters has not been realized; however, the future of RFID technology is alive and well. RFID global market revenues for 2007 are forecast at US$4.96 million and for 2017 at US$26.88 billion. These figures include hardware, systems, integration, etc. International standards have been introduced for a number of RFID applications from a number of standards groups. In 2006 the ISO approved EPCglobal's EPC Gen 2 RFID Class 1 UHF standard, a standard that is quickly being adopted for many applications. Although China has recently approved bandwidths that support RFID, incompatible bandwidths between countries is an ongoing issue. The US government continues to test and abandon some RFID projects for personal identification (such as (US-VISIT), while it considers and adopts others (REAL-ID and Passcards). Retailers, Wal-Mart and Metro Group, stand staunchly behind their RFID programs, but have encountered some stumbling blocks. Neither retailer has seen its project live up to early expectations, but both have reported efficiencies from using the technology. As early RFID implementers, government organizations and retailers are faced with issues of cost, security, and privacy. Meanwhile suppliers to both retailers and the military are faced with these same issues--as they deal with mandatory RFID implementation requirements. Looking ahead, proposals in the US to link RFID systems for passports and drivers' licenses to local, state, federal, and global databases, raises additional security and privacy issues. Also, the potential of RFID to track people, products, vehicles, and even currency is viewed by advocacy groups as an opportunity to create an Orwellian world. Not unfounded, concerns over privacy versus efficiency will need to be addressed by the RFID industry and government agencies as use of the technology evolves. Description Radio-frequency Identification ( RFID) is a subset of a larger group of Automated Identification (Auto ID) technologies. In broad terms, Auto ID is the method that assists machines in the identification and tracking of objects. Most common methods of Auto ID, such as bar codes, have been in place and used for decades. Newer RFID technology for Auto ID, has emerged as a faster and more efficient method to enhance system functionality. RFID uses radio waves to Auto ID people or objects. Different from legacy bar codes, RFID is a non-line-of-sight technology that relies on the proximity of an ID tag to a reader; bar codes require line-of-sight between a reader and a tag. A typical RFID system is composed of a tag (a microchip/antenna transponder with embedded data) and a reader, which reads the content of a tag within its frequency and proximity range. The reader converts the radio waves reflected back from the tag into digital information that can then be passed on to computers for processing. RFID tags and readers must be tuned to the same frequency to communicate. RFID systems use many different frequencies, but generally the most common are low-
3 (around 125 KHz), high- (13.56 MHz), and ultra-high frequency, or UHF ( MHz). RFID tags come in a wide variety of shapes and sizes. Some tags are easy to spot, such as the large windshield mounted "auto-pass" transponders many state highway systems use for toll pass and weighstations, and the easily recognizable hard plastic anti-theft tags attached to merchandise in stores. Animal tracking tags which are implanted beneath the skin of family pets or endangered species are no bigger than a small section of pencil lead. Even smaller tags have been developed to be embedded within the fibers of a national currency. Some uses of RFID for humans have also been seen as the technology has advanced. Active and Passive RFID RFID tags can be active or passive. Active tags are powered by an internal power source such as a battery; passive tags have no internal power supply and draw power from nearby readers. Both active and passive tags are designed with antennae to receive and transmit information. Active Tags. RFID tags powered by an internal power source fall into the category of active systems or active tag systems. The inclusion of a power source for an RFID tag device provides several features and functions that passive tags cannot. Active tags contain a higher order of memory capability for data storage that can be in the megabytes versus passive tag data storage in the lower order of kilobytes. In other applications, active tag systems can support a number of additional hardware and software functionalities such as GPS capability for asset management and tracking. The functionality of an internal power source in an active tag can also provide for integration into an existing wireless infrastructure such as based Wi-Fi. Leveraging an existing Wi-Fi infrastructure can enhance an asset management/tracking system in both range, functionality and costs. Wi-Fi antennae can replace expensive and numerous tag readers that would be required to provide the same range and functionality. Passive Tags. Passive tags have no power supply, but they do have enough power within their circuits to power up and transmit a response. For this reason, passive tags can be small enough to be embedded in a sheet of paper; however in order to function, passive tags need to be in the vicinity of a reader. Although passive tags do not have the memory capabilities of active tags, they can include an ID number and limited nonvolatile memory. Semi-Passive Tags. Semi-passive tags use an internal battery to run the chip's circuitry but draw power from the reader to communicate. Tag Comparisons: Passive RFID tags range in price from US$0.10 to US$0.20 per device, versus active RFID tags which range in price from US$50 to US$100 each. The price differential in passive to active RFID tags reflects not only the complexity and amount of information that each respective tag contains, but also the fact the most active tags are re-programmable and passive tags are not. Because passive RFID tags require an inductive field to be created by a nearby reader, passive systems are not well adapted to some locations or facilities. Although passive tags lack the range and functionality of active systems, passive tags are--for the most part--a fraction of the size of even the most simplistic and low end active device. (See Figure 1. Passive vs. Active RFID Tag). To protect personal privacy, some tags support data encryption.
4 Figure 1. Passive vs. Active Tag Applications Typical users of RFID technology include retailers and their suppliers, hospitals, government, healthcare, and automotive. Applications for RFID are varied; some of the most common include supply chain management, asset management, asset tracking, access control, and automated payment. RFID applications can be used to: Indicate the location of an item Indicate the presence of an item Indicate the source of an item Ensure that affiliated items are not separated Conduct a financial transaction Authenticate a person (who has a tagged item) Coordinate information from the tag for decision-making Applications can be deployed using a variety of RFID systems as summarized in the following categories. Electronic Article Surveillance systems: Used in retail stores to sense the presence or absence of an item. These systems are most widely used by large retailers. Portable Data Capture systems: Characterized by the use of portable RFID readers, which enables this system to function in variable settings. Port authorities use such systems for tracking and identifying container shipments. Networked systems: Characterized by fixed position readers which are connected directly to a centralized information management system, while transponders are positioned on moveable items. These systems are most prevalent in the manufacturing and food processing industries. Positioning systems: Used for automated location identification of tagged items or vehicles.
5 RFID systems enable users who deploy them to have real-time access to information. Products embedded with RFID tags can continuously transmit information ranging from an electronic product code (EPC) identifier, to information about content and location of a tagged item. In some installations, host systems read and compile this information and link the data to user specific applications. Data Management Managing RFID data is accomplished through the integration of volume management to aligning enterprise applications. With the sheer volume of RFID tags multiplying exponentially in warehouses and manufacturing facilities, the ability to disseminate data in an orderly and accurate fashion has created challenges for both RFID equipment manufacturers and application developers across many market segments. Applications such as supply chain management (SCM) and inventory control require integration to span beyond the local level to encompass multiple enterprises. For example, large mass retailing companies with regional distribution networks such as Wal-Mart are using RFID technology to track and distribute inventory. The potential alignment of multiple enterprise systems through a common interface would provide global access to tag data at both ends of the spectrum, from the suppliers supply chain to the retailers sales activity--a global goal that RFID applications have yet to achieve. The sheer volume of data transmitted through an RFID enterprise system presents two data management challenges. First is the challenge of distinguishing between intermittent and unreliable reads. Accounting and reconciliation applications working in conjunction with middleware applications, can minimize false and duplicate reads from deployed tags. Through serializing tags and reconciling tag inventory databases with tag deployment databases, RFID systems can reduce the likelihood confusing relevant with redundant data. The second challenge of data management is processing the large volumes of RFID-generated data. An organization must be prepared to have sufficient resources to support multiple exponential amounts of RFID data and determine its relevance to existing enterprise applications. For example, when fully operational, the in-store deployment of Wal-Mart's RFID inventory and Point of Sale (POS) systems is expected to generate approximately 7.5 terabytes of RFID data daily. Handling the quantity of RFID data and determining its relevance to the enterprise are critical considerations. It is estimated that as much as 99% of the data may have little or no relevance to other enterprise applications, yet will still require processing. Consider a pallet with an RFID tag that reads movement from one location in the warehouse to another. This information could have little or no relevance--unless a pallet were mistakenly loaded onto the wrong truck; that information would be highly relevant. Standards Numerous RFID standards are emerging. The International Organization for Standardization (ISO) certified standards for tracking goods in the supply chain using high-frequency tags (ISO ) and ultra-high frequency tags (ISO ). EPCglobal, a joint venture set up to commercialize Electronic Product Code (EPC) technologies, has its own standards process, which was used to create bar code standards. Today, EPCglobal is a major player in establishing RFID standards; the organization has broadened its membership to include
6 worldwide companies and government agencies. Some of EPCglobal's board members hail from Procter and Gamble, Metro Group AG, Wal-Mart, GS 1 Brasil, MIT, the US Department of Defense, and Sony Corporation. According to its website, "EPCglobal is leading the development of industry-driven standards for the Electronic Product Code (EPC) to support the use of Radio Frequency Identification (RFID)." In 2004, EPCglobal certified its Gen 2 standard, formally known as EPC RFID Gen 2 Class 1 UHF. In 2006, the ISO published the Gen 2 standard as an amendment to its ISO standard RFID air interface protocol. The amended version, ISO c, supports the RFID air interface for item management devices that operate in the 860 MHz to 960 MHz band; this band is used for industrial, scientific, and medical (ISM) applications. The new standard has capabilities for more security and expanded functions. Gen 2 has become a requirement for a number of RFID applications including the REAL ID drivers' license program planned for the state of Washington. Gen 2 supercedes earlier versions, Gen 0 and Gen 1; EPCglobal will be certifying Gen 2 tags to ensure that they incorporate all parts of the spec. RFID systems are also capable of supporting standards from other national and international organizations based on applications. For instance, standards for RFID passports are determined by the International Civil Aviation Organization (ICA0) as well as the International Organization for Standardization (ISO). For most low and high frequency RFID systems, a majority of countries have allocated the 125 khz or 134 khz (low) and MHz (high) radio spectrums. Ultra High Frequency (UHF) RFID systems, however, have only been around since the mid-1990s and there has not been a consensus among countries on a single area of the UHF spectrum for RFID. Europe uses 868 MHz for UHF and the US uses 915 MHz. In April 2007, China's Ministry of Information Industries approved bandwidth in the to MHz and to MHz ranges for use by UHF RFID passive tags and interrogators in that country. Current View RFID technology is alive and well, but not quite living up to earlier expectations. As the US government tests and abandons some RFID projects for personal identification, it considers and adopts others. Retailers stand staunchly behind their RFID programs, but have encountered some stumbling blocks. As early RFID implementers, government organizations and retailers are faced with issues of cost, security, and privacy. Meanwhile suppliers to both retailers and the military are faced with these same issues as they deal with mandatory RFID implementation. Passports. In early 2007, the Department of Homeland Security (DHS) abandoned the idea of using RFID tags to track visitors leaving the country. Why? According to DHS, the technology "has not proven successful in testing." For the test, tag readers were suspended over exit lanes to read visitors' tagged documents as they passed through. The tags used long-range radio frequency technology, also called vicinity read. The tests were conducted as part of the US-VISIT program. In contrast, the successful RFID e-passport program uses short-range rather than long-range technology to read embedded tags.
7 Drivers' Licenses. Several US states have announced plans to issue drivers' licenses using RFID technology; these licenses could be used by US citizens for crossing US land and sea borders under the REAL-ID program. DHS recently stated that it is leaning towards supporting RFID-enabled documents for crossing borders between Mexico and Canada as well as the Caribbean; this move is part of the planned implementation of the Western Hemisphere Travel Initiative (WHTI) scheduled for summer Passcards using RFID would also be part of the WHTI program. Retailers. In 2003, Wal-Mart mandated that its top suppliers install RFID systems; this was to meet Wal- Mart's goal of reducing its inventory and labor costs. Although some suppliers have complied, the project has not met original expectations. Wal-Mart acknowledges that RFID has improved product availability and inventories are replaced more efficiently; however, the Wall Street Journal reports that currently the technology is installed in only five of the retailer's approximately 120 distribution centers and in1000 stores. The concern for Wal-Mart suppliers is that they will not receive return on investment (ROI) in RFID; however some large suppliers, including Procter and Gamble, report that the RFID investment has been an ROI success. German retailer Metro Group began its RFID program (called Metro's Store of the Future) in and after four years the project has not fully met its promise. However, Metro Group's RFID momentum continues. In a recent press release the retailer announced plans to install expanded systems within over 200 of its distribution centers and stores. Included in its group of 40 participating suppliers are Procter and Gamble, Gerry Weber, and Frosta. US Department of Defense. In 2004, the US Department of Defense mandated the use of RFID technology for all shipments "moving to, from, or between overseas locations." In part because of this technology, the DOD reports that requisitions that took 24 days to fulfill two years ago now take 16 days- -with plans underway to further improve fulfillment times. Cost. Costs for RFID technology have not dropped as quickly as predicted. Because retail supply chain applications have not lived up to earlier expectations, fewer systems have been installed than planned-- systems whose volumes could have driven down costs. So, today's costs are higher than were projected, causing many organizations to delay initial RFID investments until they see successful results from others' applications. Passive RFID tags range in price from US$0.10 to US$0.20 per device, versus active RFID tags which range in price from US$50 to US$100 each. Today, bulk buying may lower prices; volume-user Procter and Gamble reports that it is presently paying US$.15 per tag. For most applications, it is believed by RFID industry experts that RFID tag costs must be at US$0.05 or less for RFID to provide an effective ROI. Overall costs for application and development for some global systems range in millions of dollars. Security and Privacy. RFID technology is being deployed throughout the security industry not only as a method to track objects leaving and entering into ports, but also for tracking people as they enter or leave buildings, facilities, and/or countries. RFID is now used along with biometrics in e-passports and some drivers' licenses. In spite of its benefits, RFID technology has also raised concerns about personal privacy. Especially disturbing is the possibility that unauthorized RFID readers--positioned near authorized readers--could intercept personal information from individuals' drivers' licenses or passports. Although some tags support encryption, civil liberties and other advocacy groups are voicing the need for protection of
8 individuals' privacy. In response, RFID privacy legislation and documents are proliferating in the US. The National Institute of Standards and Technology (NIST) issued its Guidelines for Securing Radio Frequency Identification (RFID) Systems in April Across the US, state legislators are discussing bills or passing laws that affect the use of RFID. Most are aimed at Prohibiting non-voluntary implanting of RFID devices in employees Labeling RFID-enabled access cards to alert employees to the embedded technology Regulating retailers in their use of RFID within their stores Labeling consumer products that might contain RFID tags Prohibiting schools from using RF-based systems for security Criminalizing remote reading of RF-based credentials The use of RFID for human tracking purposes has also raised concern, however, the Food and Drug Administration approved RFID for human implantation in With the approval of FDA, some privacy advocates fear that implanting humans with chips could lead to unwanted tracking. RFID chips are now being used to track pets and wildlife. Outlook With proposals in the US to link RFID systems for passports and drivers' licenses to other local, state, federal, and global databases, security and privacy issues will continue to be raised. In spite of these concerns, RFID's capabilities for industry, commerce and government are so promising that the market will grow nicely and costs will decrease--but at a slower pace than earlier projected. As the technology proliferates, skilled technicians will be needed while the lack of compatible global standards will continue to be an issue. Market Growth. IDTechEx, an international knowledge-based company specializing in RFID technology, predicts that the global revenue for RFID in 2007 will be US$4.96 billion; this figure includes hardware, systems, integration, etc. Projected global growth in 2017 is estimated at over US$26.88 billion. IDTechEx also cited that the global market for transponders (tags) is experiencing rapid growth. The 2006 revenue for transponders was close to US$1 billion and revenues are expected to double in The organization forecasts that over the next 3 to 5 years, transponder revenues within the Americas and Asia-Pacific will outpace those in the Europe/Middle East/Africa (EMEA) region. As a member of the Asia-Pacific region, China will contribute to this market growth. China's National High-Tech Research and Development Plan has reported that the national government will allocate over US$16 million to fund 20 major RFID programs. China's recent approval of bandwidths to support RFID passive tags and interrogators supports this initiative. Global Skill Shortage? Since RFID continues to be an emerging technology, questions have been raised about whether its global skill pool is large enough. To support an RFID project, trained technicians need to understand both the technology and the application that it supports; this combined
9 knowledge is necessary for technicians to effectively maintain, train, and service an RFID application. Global Standards. With ISO certifying EPCglobal's Gen 2 standard, the prospects of global acceptance are favorable. However, RFID bandwidths vary from one country to another--and in some cases are incompatible. Unless a consensus can be achieved, the full benefits of global enterprise RFID will be elusive. Cost. For potential new users, the cost of application development and deployment for global access to RFID data is still a big unknown; however, it is conceivable that a lion's share of any startup capital outlay will go towards applications and integration. Suppliers with existing mandated RFID installations may be reluctant to make further investments. A major concern will continue to be whether RFID investments will provide ROI, but mandates from retailers and government agencies may trump those concerns. Recommendations Evaluate Potential Applications. Determine which applications will provide the highest potential ROI. After a variety of RFID trials and tests, Proctor and Gamble categorized its applications and identified high ROI candidates. After implementing targeted RFID, the company is achieving high, immediate ROI. Procter and Gamble pays US$.15 per tag but sees prices dropping. Upgrade to Gen 2. Implementing Gen 2 should be a consideration for organizations using earlier protocols. With its ISO certification and increased functionality, Gen 2 is becoming the foundation of many RFID deployments. For those upgrading, plan the transition carefully to avoid disruption of ongoing operations and conversion expenses. Also, determine whether upgraded legacy systems will be able to support features in Gen 2 that are critical to the organization's operations. In addition, test and evaluate Gen 2 systems--including EPCglobal-certified Gen 2 tags--in the country where they will be used; power regulations differ around the world. Consider the following: How are similar organizations handling RFID implementation? Are there lessons to be learned? Will the benefits of deploying RFID technology outweigh the costs? Where should RFID be deployed to gain the maximum benefit of the technology, everywhere or strategically? (Studies and pilots have proven that there are ROI benefits when RFID is used in targeted applications. ) What type of RFID system fits the enterprise application, active, passive or a combination? Would tests and pilot programs help to answer this and other questions? Is the time for deployment now, or should the enterprise customer wait for costs to come down and functionality to go up? Will privacy issues result in liability litigation? Integrate the Enterprise. Many of the leading tag manufacturers also provide complete solutions for management software and systems integration; an organization may need to select solutions based on
10 compatibility with existing enterprise applications. When planning an RFID application, consider not only hardware and software, but also the systems, subsystems, and integration required to support the project. How soon will RFID's true value be realized? When RFID-generated information becomes an integrated part of an organization's decision-making process. About the Author Mary Ainsworth is a business writer and contributor to Faulkner Information Services. Ainsworth has covered technology for over 15 years, with a focus on information security products and issues. She has held positions as manager and analyst for Gartner and Datapro Research Corporation; while at Datapro, she was senior analyst for Datapro Reports on Information Security. Ms. Ainsworth has written articles on disaster recovery planning and access control for Government Computer News and Computerworld, as well as being a featured speaker at industry trade shows and on national radio. Web Links EPCglobal: Food and Drug Administration: IDTechEx: International Organization for Standardization: Metro Group AG: National Institute of Standards and Technology: Procter and Gamble: US Department of Defense: US Department of Homeland Security: Wall Street Journal: Wal-Mart:
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