Myths, Facts and Reality
What is RFID?
• Radio frequency identification or RFID
• Generic term for technologies that use radio waves to
automatically identify things
• Happens with a serial number that is embedded in a chip
• That microchip has an attached antenna (the chip and the
antenna together are called an RFID tag).
• The antenna enables the chip to transmit the serial number
information to a reader.
• The reader converts the radio waves reflected back from the
RFID tag into digital information that can then be passed on
to computers that can make use of it.
How Does an RFID System Work?
• An RFID system consists of a tag and a reader
• The reader sends out electromagnetic waves
• The tag is tuned to receive these waves
• RFID tag draws power from the field created by the
reader and uses it to power the tag
• The chip uses that energy to send the serial
number back to the reader
RFID Made Simple
• I saw this tag
– The tag could be on anything like:
• A bag of chips
• A box full of chips
• A pallet full of boxes of chips
• A truck full of pallets of boxes of chips
• At this time
– Usually expressed in UTC
• At this location
– The location could be anywhere like:
• The end of an assembly line
• A dock door
• A store shelf
What does a tag look like?
• Myth 1: RFID will replace bar code
– In reality, these are two complementary technologies
• While RFID can store more data than bar code, bar code is much
• Myth 2: RFID tags will cost pennies
– The Auto-ID Center published data that assumes market volume of
30 billion units per year (which they claim actually represents just two
major manufacturers’ volume) would result in a tag cost of 3 to 4
cents with a sale price of 5 cents
– The chips themselves would cost 1 penny
– The ePC Group is being a little more realistic by estimating costs of
15 to 50 cents over the next few years
• Myth 3: RFID is simple to deploy
– RFID works in the RF environment
• Which is effected by moisture, weather, radiation, invisible RF
interference, and even by the material of the building in which it is used
and the materials stored in that building
• Also varies depending on the material to which the tag will be affixed
– Each individual RFID application requires unique programming and
customized database software
– Each class of items to be tagged requires a unique tag designed for
that item's material composition and usage environment
– There is no universal tag.
• Tags need to be specific to the problem you are trying to solve
RFID Myths Meets Reality
• Myth 4: RFID is not ready for prime time
– RFID is ready now!
• It's been used for years.
– It's tracking animals
– it's collecting tolls
– it's been improving car assembly since the early 1980s.
– Each industry and company will find a different
• Retailers will reduce out of stock no sales,
– Which cost billions of dollars each year.
• Manufacturers use RFID perfecting the production process
– Eliminating errors, and in making recalls easier and better focused
• Wal-Mart is already on board.
– "we have asked our 100 top suppliers to have product on
pallets employing RFID chips and in cases with RFID
chips … By 2006, we will roll it out with all suppliers."
– Carolyn Walton, VP of IS for the retail behemoth, telling a
panel that "our out-of-stocks were reduced by 16 percent
with the use of RFID." March 2006
• The U.S. government is converting to RFID.
• The Department of Defense (DoD) is embracing RFID and will
have an even greater effect on the industry than Wal-Mart
• US Passport
Wal-Mart's RFID initiative
• The Bottom Line: 3 Billion Dollars!
– Beyond compliance, if RFID provides just a 15%
improvement in product availability based on
standard stock-out levels, Wal-Mart could reap a
$3B increase in sales
– Benefiting not only Bentonville, but every
supplier whose products are easier to find and
• California - SB1834
– PURPOSE: Restrict the way businesses and libraries in California
use RFID tags attached to consumer products or using an RFID
reader that could be used to identify an individual.
– Defeated by members of the California state assembly on June 25,
• Rhode Island – H 5929
– PURPOSE: Prohibits state or local government from using RFID to
track movement or identity of employees, students or clients or
others as a condition of a benefit or service
– Vetoed by Governor on July 15, 2005.
– EPCglobal is leading the development of industry-driven standards for the
Electronic Product Code™ (EPC) to support the use of Radio Frequency
– Auto-ID Labs is a federation of research universities that has evolved from
the Auto-ID Center, initially founded in 1999 to develop an open standard
architecture for creating a seamless global network of physical objects
– RFID Journal is an independent media company devoted solely to radio
frequency identification and its many business applications
• Their mission: to help companies use RFID technology to improve the way they
– Take this for what it is worth.