RFID: poised for growth

SMARTSHARE

A tall man with a long overcoat walks into a store, coolly lifts a stack of Mach 3 and slips it in his oversized pockets. A Clive Christian is the next to vanish in the abyss of his overcoat and he then stoops to pick up a box of Cohiba Behike as he pretends to tie his laces.

Mission accomplished, he darts out of the gate virtually unnoticed, when a gentle tap on the shoulder from behind by a security guard brings an unintended halt to his great escape.

As he turns around to face reality, the security guard, smiling from ear to ear, hands him a receipt with a courteous "Thank you". Welcome to the new world of Radio Frequency Identification (RFID).

It turns out that the RFID device readers in the store took an inventory of the shoplifter's hidden items and billed them to his RFID-enabled credit card. The handing over of the receipt, accompanied by a wide grin, was the only human intervention in this exercise.

RFID is an automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders. An RFID tag is an object that can be attached to or incorporated into a product, animal, or person for the purpose of identification using radio waves. Chip-based RFID tags contain silicon chips and antennas.

In February 2007 Hitachi unveiled an RFID device measuring 0.05x0.05 mm, and thin enough to be embedded in a sheet of paper. The new chips can store as much data as the older µ-chips, and the data contained on them can be extracted from as far away as a few hundred metres.

Shoplifters aside, RFIDs are changing the way companies keep inventory, or the way the shepherd keeps his flock of sheep together.

You would know how much time is wasted at toll plazas as you await your turn to pay. It may now be possible to drive through the plaza without stopping to pay your toll.

The tags in your car would be read remotely as vehicles pass through the booths, and tag information is used to debit the toll from a prepaid account. The system helps to speed traffic through toll plazas as it records the date, time, and billing data for the RFID vehicles.

Abroad, high-frequency RFID tags are used for trackingpurposes in passports, libraries, airline baggage, apparel and pharmaceutical items. High-frequency tags are widely used in identification badges, replacing earlier magnetic stripe cards.

In India, the most common use is in managing inventory systems. The visibility provided by this technology allows an accurate knowledge on the inventory level by eliminating the discrepancy between inventory record and physical inventory.

Second, RFID technology can prevent or reduce the sources of errors. The benefits of using RFID include reduction of labour costs, the simplification of business processes and the reduction of inventory inaccuracies "" and, of course, prevention of shop lifting.

A prominent south Indian auto ancillary found that the requirement of manually swiping the card was resulting in long queues at the gate, and wastage of productive time. RFID-enabled cards meant that workers could walk through the gates without any waste of time. It also enabled the management to track how the time was spent.

As tags get cheaper with large strides in technology, more companies will start using them. And as more people use them, the economies of scale will come in, making them even cheaper, which will attract still more users.

A low-end tag today would cost something like Rs 10. If numbers go up, it might be possible to bring down the cost to just one rupee. Replacing the bar-coding may just be one of the sub-sets of the universe of markets RFIDs would eventually address.

According to ID Techex, a UK-based research company, the world market for RFID was $2 billion in 2006. It is estimated at $3.5 billion for 2007 and is though to be around $25 billion by 2015.

It might be a good idea to have a close look at the sector. Its time has arrived.