EMERGING TECHNOLOGY RFID: A Grain's Impact

A ccording to researchers at the Lemelsen Center at MIT, radio frequency
identification (RFID) is the tenth most innovative technology of the past 25
years. RFID is a technology that helps store data about people or objects on a
microchip the size of a grain of sand and then uses radio waves to automatically
transmit this data. This eliminates line-of-sight constraints and makes it
possible to track individuals or items without costly, and sometimes cumbersome,
manual scanning. There are several methods of identification but the most common
is to store a serial number (or any other information) that identifies a person
or an object, on the microchip that is attached to an antenna (the chip and the
antenna together are called RFID tag). Antenna enables the chip to transmit the
identification 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 the computers for processing.

RFID tags can be placed on all kinds of objects such as consumer goods,
shipping containers, high-value equipment, and even human beings so that their
movement and location can be easily tracked. A school in the US is putting it
into the I-cards of students to track student movement in the campus.

RFID's adoption is being driven by not only the cost saving opportunities
that it offers but also the kind of new operational efficiency that it promises
to bring in many sectors-from manufacturing to retail. Industry analysts
expect the RFID market to grow by 47 percent to reach two billion dollars
worldwide by the year 2008.

The
retailing industry expects to save billions of dollars by better managing the
supply chain using RFID. RFID will not only allow them to track merchandise, and
thereby improve their merchandise to consumers, it will also help them minimize
losses on account of thefts. One of the most talked deployments of RFID
technology has been the one by retailer WalMart. Using RFID, WalMart tracks its
inventory as it moves through the supply chain, from its supplier (or
manufacturer) to the distribution center, to the retailer stock room and on to
the shelf on the sales floor of the stores.

According to a new report, titled The RFID Life Sciences Market from ABI
Research, the pharmaceutical industry is turning to RFID as one cure for many
problems. Drug counterfeiting may cost the worldwide pharmaceutical industry
more than $30 billion annually, and RFID technology is seen as one way to lower
that damage. To minimize this wastage, and to raise the level of safety for
patients, many pharmaceutical companies are embracing RFID tagging of drug
shipments at the item level. At least three major manufacturers-Pfizer,
GlaxoSmithKline and Purdue Pharma-have already announced plans to tag their
products.

Airline companies too seem to be keen on deploying RFID, primarily for saving
the millions that they lose annually on account of misplaced baggage. For
example, in the final quarter of 2003, Delta Airlines began implementing RFID
technology to track 40,000 pieces of passenger luggage. Typically, with bar code
scanners, Delta's success rate was 80—85 percent. In December 2003, however,
Delta announced that the RFID-tagged baggage recorded accuracy levels of
anywhere between 96.7 percent and 99.9 percent.

Misrouted baggage costs Delta about $100 million per year. RFID technology
could cut those costs significantly, the airline is confident. Under Delta's
plan, the tags will be embedded in the familiar luggage labels that airlines use
to identify a bag's origin and destination. The labels will be scanned at
various points in the check-in, loading, and unloading process, giving
supervisors the ability to quickly find the location of any given piece of
luggage.