'cool supply chain the ultimate aim'

RFID (Radio Frequency Identification)

RFID (Radio Frequency Identification)

Air carriers and other modes of transportation will no doubt increasingly see RFID tagged cargoes being delivered to their warehouses. RFID is another step towards total product trace ability throughout the food and drug chain. The ultimate goal of an RFID system is to track individual products all the way from manufacture to sale.

Generally speaking, RFID is an automated identification and tracking system, which through the use of a “chip or tag” sends data through a wireless data communication-system. The tagged items sends out information of their identity, location, activity or history through readers which translate this information into a digital form and send it to application software that can process and utilize this information.

RFID technology offers some important advantages to large retailers, importers and shippers alike and has a lot more advantages than bar coding does. Demands for adoption by retailers such as the Wal-Mart announcement; that its top 100 suppliers must be RFID- compliant by Jan. 2005, are pushing third party suppliers to implement the technology as part of their inventory and supply chain solutions.

What further drives the huge surge of interest for RFID is its promise of automated tracking of individual products all the way from manufacture to sale. The result of this improved flow of information includes:

  • Substantially reduced pipeline inventories
  • Reduced operating costs
  • Improved customer Service

From a Cool Chain point of view what is further interesting is the tags ability to monitor temperature.

There is however also some technical challenges to overcome, especially when dealing with the distribution of perishable goods. Some of the challenges are the speed at which the tag passes the reading device (too slow) for 100% accuracy rate; factors influencing transmission of data, location(s) of tag(s) and location(s) of reader(s). Also perishable items that has a water content, has problems when reading the tags, as the water absorbs the radio energy from the antenna that the tag relies on to power it's communication ability. The "reader" and the "tag" antenna design are presently being researched.

The cost of the tags, are another issue. Although the price has been drastically reduced over the last few years, they must be further price-reduced in order for businesses to be able to buy them by the millions (today’s tags are about 20cents each, Readers are priced at appx. 1000$ each). Most experts, however, predicts the “five cent” tag will be here by 2006, and Readers are expected to decline to a few hundred dollars each.

Companies and CCA members shall recognize that they are not suddenly faced with a choice between bar codes and RFID, but rather make a decision as how to use each technology to achieve the highest level of benefits. Both technologies will need to co-exist in the supply chain for many years.

CCA recognizes that this need for co-existence are sure to impact adoption strategies overall for both RFID and supply chain technology. The issue is extensive and will therefore be a main item at the CCA AGM Workshop in June 2005 where all CCA members will get an opportunity to get well acquainted with the impact RFID will have on our industry in the near future.