Radio Frequency Identification

What is RFID or Radio Frequency Identification? Some of you may have pets and had the opportunity to get a "chip" for your pet. The vet places an extremely small device, injected via syringe, under the skin. When scanned, the chip provides information relevant to the pet's history and its owner's information. This is an amazing way to track your dog's information in the event it gets lost and is transported to the animal shelter. You can be assured animal control will have your information even if you don't have a collar with a tag on your pet. RFID works much the same way in an industrial environment.

An RFID system consists of a transceiver which reads the radio frequency from the RF tag and transfers the information to a processing device to analyze the data. There are two different types of RF tags that hold the data, passive tags and active tags. Passive tags use the radio frequency from the reader to transmit their signal from permanently embedded information on the chip, like the chip in your pet. Active tags are more complex and have on-board battery to power the signal transmitter. Generally, active tags can hold more information. So how does RFID help in the Industrial, Warehousing and Distribution market?

Here are some potential RFID applications in warehousing and distribution environments:

* Pallet and case tracking

* Access control as chips are enabled to control entry to secure buildings or rooms

* Forklift identification in which chips are used to locate and assign the closest forklift

* Smart shelves used for materials management and inventory control

There are several opportunities for RFID technology and how it can be used in warehouse and distribution centers. When receiving items such as cases and pallets, they are logged by a door mounted RFID device as they are unloaded from the truck entering into the warehouse. The system reconciles the orders and transmits the information from items in which can be cross docked for immediate transportation, while other orders can be staged or stored for later transport. This system is much more efficient than bar coding because it eliminates the need to stop and scan the items. It also reduces the chance of missing an item in the scan process. When cases or pallets are loaded back onto trucks, the door mounted units record the event, update the database, and produce shipping invoices and packing slips immediately.

There are barriers to entry with RFID. According to Kasia Banasiak with ITS Logistics in Sparks, the cost of RF tags can be prohibitive for companies to take advantage of this technology. Until we see a drastic reduction in the cost of RF tags it will not be feasible for companies to implement on most goods being distributed or sold. Let's say a tag costs 10 cents. Your company will need to add another 10 cents to the bottom-line cost. The cost benefit may not be feasible to implement on items at a certain cost point.

One area we will start to see RFID used with companies is the tracking of equipment and vehicles of significant value. If a company has a large fleet of vehicles, it would be very useful to instantly find out which vehicles entered and exited the business location. You could also get an instant inventory of available vehicles at the business location. This tracking can also be used for trains entering and leaving stations, truck trailers, forklifts and pallet jacks.

In the competitive global supply chain management arena, it is imperative to keep up to speed on evolving technologies to increase efficiencies and reduce costs. RFID is a rapidly evolving technology that should be considered when designing a future inventory tracking system or relocating to a new facility.

Chad Guldin is an associate broker in the industrial group with Colliers International in Reno.