Something to tag about

TECHNO BEAT: RFID is now being catapulted from the defence portals to the shopfloor.

In India, Pune University's Jayakar library uses RFID tags on its books as well as library cards; the Chitale Dairy in Maharashtra has installed Radio Frequency Identification (RFID) to monitor the feeding patterns of cattle and bisons; Pantaloon Retail India and Shopper's Stop have RFID tags in their factories (time saved in scanning items is said to be around 80 per cent). That's not all.

More than 45 colleges in Pune have introduced student identity RFID cards that allow students access to hostels and monitor their classroom attendance; and ITC uses RFID to track what goes into the manufacturing of its cigarettes.

Ashok Leyland (tags in the engine-testing area) and Madura Garments (garments that find their way into the central warehouse) are other examples.

Indian suppliers to retail majors such as Wal-Mart, Metro, Target and Tesco have already been issued directives to replace bar codes with RFID tags.

While this may lower margins of these suppliers, it is also expected to create a demand for RFID tags in India.

The estimated market size of this industry in India is anywher between Rs 125-150 crore (Rs 1.25-1.50 billion) and is said to be growing at 30 per cent per annum.

What's RFID? Will they replace bar codes?
An RFID tag is a small object that can be attached to or inserted into a product, animal or person. The tag transmits data which is then read by a reader and processed according to the needs of a particular application.

The data may provide identification or location information, or specifics about the product tagged "� such as price, color, date of purchase.

Consider the scenario of a library. Security gates can detect whether or not a book has been properly checked out of the library (similar to what a Shopper's Stop outlet would do when its customers walk out of the door).

In India, RFID is limited mostly to warehouses and not extended across the supply chain (from the warehouse to the shop to the suppliers and distributors) since Indian companies do not have the economies of scale that a Walmart may enjoy.

Passive tags are those that require no internal power source, whereas active tags require a power source "�hence are more expensive.

The current cost of tags is anywhere from Rs 5 to Rs 30, considered to be prohibitive when tagging thousand of products. The rates are bound to decrease this year. Worldwide RFID spending is expected to surpass $3 billion in 2010, predicts Gartner. A Research and Markets report pegs the figure at $6 billion by 2010.

Bar codes are better at collecting data in structured places like warehouses (likely to continue for the next five to seven years). RFID tags are expected to be used for data collection in largely chaotic or unstructured business processes like retail environments to hospitals.

Gartner states RFID adoption continues to gather momentum and spending on related hardware and software is expected to touch $751 million in 2006 and top $3 billion by 2010.

However, it does not see the technology as a replacement for bar codes. RFID, it states, will be used in areas where processes are not controlled by business applications.

Besides, case studies have shown that RFID scanners successfully read tags 85 to 90 per cent of the time.

The industry needs to freeze on standards which customers can adopt; the infrastructure that is available is not capable of reading tags in transit. Training, education, exposure and research is required within an organisation and business process needs to be changed. It may not benefit the end customer immediately.

A four-letter word too
It's no secret that implantable RFID chips designed for animal tagging are now being used in humans. The VeriChip, for instance, is a glass-encapsulated RFID tag that is injected into the flesh to uniquely number and identify people.

The tag can be read silently and invisibly by radio waves from up to a foot or more away, right through clothing.

The highly controversial device is also being marketed as a way to access secure areas, link to medical records, and serve as a payment device when associated with a credit card. VeriChip bandied about the idea of chipping foreigners on national television recently in response to the Bush Administration call to know "who is in our country and why they are here."

Wisconsin governor Jim Doyle recently signed a law making it a crime to require an individual to be implanted with a microchip. Anti-RFID activists are thrilled with the move. However, that's no reason to throw the baby with the bath water.