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— April 19, 2006

RFID

New Wal-Mart CIO Confirms Commitment to RFID
Rollin Ford, Wal-Mart's new executive vice president and chief information officer, who previously served as the company's executive vice president of logistics and supply chain, strongly endorsed RFID technology at the company's biannual CIO summit in Bentonville, Ark.
Ford told the audience of CIOs he was thrilled to be in his new position and that both logistics and information systems were at the center of Wal-Mart's competitive advantage. Ford said he intended to build on the success of his predecessor, Linda Dillman, who was named executive vice president of risk management and benefits administration at Wal-Mart.
Ford said he was unequivocally committed to Dillman's vision and to the pioneering work in RFID that she led at Wal-Mart.
"Like Linda, I view RFID as a strategy that offers tremendous competitive advantage," he said. "There will be no slowing down. I have been a member of the Wal-Mart RFID executive steering committee for the past three years, so I know firsthand that we have a great team working on RFID. I am as excited about what lies ahead as they are."
Ford reaffirmed the company's commitment to the EPC standard and said he was impressed with the step change in performance the company had seen through the use of the EPC Gen 2 standard. "When Gen 2 was released we planned to make it our standard at the beginning of this year," Ford said. "We have done that, and I can confirm that we will be sunsetting Gen 1 on June 30."
Ford also confirmed his enthusiasm for the advancements he had witnessed only a couple of weeks earlier in UHF Gen 2 tags specially produced for pharmaceuticals. "Many thought UHF tags could not be read around water or metal and that only HF tags could meet these tests. However our team and our technology partners proved that the new UHF Gen 2 tags could, in fact, be read in water and on metal. That's nothing short of a breakthrough."
He closed by saying that "RFID will transform the way we do business."
http://walmartstores.com/

ABI Research Highlights RFID's Progress
Boosted by the Gen 2 specification, RFID markets show signs of a healthy transition to the next phase of implementation: full integration at the enterprise level, backed by deep management commitment, according to a new report from ABI Research, Oyster Bay, NY.
In a new market update to its RFID Research Service, ABI says the newfound confidence stems from two sources: RFID hardware and components, and RFID's assimilation into business systems. "Standards, and the maturity of the technology, are beginning to have a significant effect," says Erik Michielsen, ABI's director of RFID research.
The data collected by RFID still has to translate to more effective business processes, he says. Early trials and compliance efforts did not really address those issues. But now, Michielsen observes, "Whether it's the FDA or Wal-Mart or Target or Metro or the Department of Defense, you're seeing commitment that is resonating through the industry: this is something that will be long-term, not short-term."
Michielsen dismisses reports of an industry slowdown: it's just that buying cycles are being extended, he says. Companies are planning RFID and setting capital expenditure budgets with a longer-term mindset. "They are asking better questions and addressing more comprehensive processes that mesh with longer-term corporate goals."
http://ww.abiresearch.com

Boeing Taps Intelleflex for High-Memory Tags
Boeing has tapped Intelleflex to supply chips for the passive RFID tags the company will use to track parts for its new family of 787 Dreamliner jets, but the chips will have one-eighth the memory Boeing originally envisioned. When Boeing announced its intention last fall to use RFID-tagged parts in the Dreamliner, it had said it needed an EPC tag that could hold 64 kilobytes of data, far more than the 96 bit capacity of current.Gen 2 UHF passive tags.
While a 64 kilobyte chip was not doable within Boeing's timeframe, Intelleflex told Boeing it could produce a 64-kilobit chip in time to have tags in the marketplace and available to Boeing's parts suppliers by December of this year. The fast turnaround time was possible because Intelleflex, based in San Jose, Calif., already was working on a high-memory chip.
"We had a huddle at Boeing and decided that we would go with the Intelleflex chip because it would jump-start the process by a year [over the timeline for the 64-kilobyte chip]," says Kenneth Porad, Boeing's program manager for automated identification programs.
"Sixty-four kilobits does have some limitations," says Porad. Therefore, the Air Transport Association (ATA) working group focused on setting RFID usage standards is in the process of identifying the data most important to the participating stakeholders. "We've identified and agreed to 19 data elements that [parts suppliers] must write to the tag prior to a part's delivery. Things like part number, serial number, date of manufacturer, lot number, weight and the part's name in English," says Porad. The amount of additional memory, however-which will be used for maintenance history-will be much more limited in the 64-kilobit tag, compared with the originally proposed 64-kilobyte tag. "They will have to use that memory economically," says Porad.
http://www.rfidjournal.com/

Virgin Atlantic Launches RFID Pilot
Virgin Atlantic Airways also sees the potential for RFID to track high-value, repairable aircraft parts. It recently launched a pilot project designed to track these critical aviation assets moving through its logistics supply chain at Heathrow International Airport. Virgin Atlantic is the first airline in the United Kingdom to use RFID technology to track parts onsite.
Virgin named Symbol Technologies and its solutions partner, PEAK Technologies, to supply the pilot's RFID technology, which includes Symbol's MC9000-G RFID handheld mobile computers with RFID readers and a Symbol wireless LAN (WLAN) infrastructure.
The project, called TRIM (Tracked by Radio Identification Method), uses Oracle's Fusion Middleware and Database 10g to capture and manage Virgin Atlantic's supply data. Tata Consultancy Services Ltd. provides consulting and system integration expertise, while PEAK Technologies is responsible for implementation of the Symbol equipment.
“In such a competitive market there is a constant need to find efficiencies, control costs and expand business. As Britain's second largest carrier, Virgin Atlantic is keen to investigate the efficiency of the RFID-enabled warehouse,” said Graham Holford, senior systems analyst, Virgin Atlantic. http://www.symbol.com/

SmartCode Tests Item Tags
RFID systems provider SmartCode has announced five new 860-950 MHz UHF EPC Gen 2 inlays specially designed for item-level tagging. These inlays can be used to identify pharmaceuticals and other individual products, or to recognize consumer items such as apparel or packaged goods.
One inlay, the Picasso, is intended for conversion into a 1.05-by-1.05-inch label for pill bottles. Three other inlays-the Square, the Triangle and the Circle-are built for use in item-level labels for consumer packaged goods and media, such as DVDs. A fifth design, the Comb, is the largest of the new inlays, designed for maximum readability regardless of the tag's orientation to the reader or the contents of the product being identified. The inlays contain antennas suitable for near-field interrogation. The SmartCode inlays have a one- to two-foot read range, though some tags have reportedly been readable at three feet in lab tests.
Currently, the SmartCode near-field UHF inlays are being tested with undisclosed end users in trials that involve tracking pharmaceuticals, jewelry, cosmetics and rental DVDs.
The inlays will be available in May at a cost of 8.5 cents each for quantities of 1 million or more units.
http://www.rfidjournal.com/

Avery Dennison Offers 'Real World' Inlay
Avery Dennison RFID, a business unit of Avery Dennison Corp., announced that it will offer its new high-performance AD-420 inlay at prices as low as 8.9 cents. The AD-420 is part of the company's Gen 2 portfolio of "real-world RFID" inlays.
"Over the past few months, we have seen the advent of EPC Gen 2 and the reduction in tag and equipment costs start to accelerate adoption of RFID in the global supply chain," says George Reynolds, vice president, worldwide sales and marketing. "As major retailers, manufacturers and the Department of Defense all ramp up their RFID programs through the balance of 2006, you will see this industry begin to move away from compliance mandates toward real data-driven implementations. This ramp-up will also drive automated tagging. And both of these trends will elevate the importance of RF performance at the tag level."
To date, most consumer packaged goods manufacturers have only been tagging a limited number of SKUs destined for a small number of their retail customers' distribution centers. They have typically deployed a labor-intensive, hand-applied tagging method that allows them to work around RF-unfriendly contents (like metals and liquids) by manually placing the tag in an air gap, says Reynolds. But as the RFID industry matures and major retailers demand more SKUs to be tagged in higher volumes, users will transition to more automated tagging methods, which require higher performing RFID tags.
"As this new 'performance era' in RFID gains momentum in upcoming months, Avery Dennison RFID will do everything we possibly can to enable users to manage the transition," says Reynolds. "Offering a high-performance inlay like the AD-420 at prices as low as 8.9 cents is an important component of our enabling strategy."
http://www.dcvelocity.com/

Omron Boosts RFID Capacity
Omron Corp., a $5.5bn Japanese manufacturer of automation and sensing products, has announced that RFID inlay manufacturing capacity will be increased to support production of more than 250 million inlays per year at its Minakuchi factory in Shiga, Japan.
The plant expansion plans "should give a clear indication that Omron RFID is stepping up its capabilities, responding to the increasing market demand and aggressively pursuing the global RFID market," says Bill Arnold, chief strategist for Omron RFID.
Omron RFID inlays are manufactured using a patented process called "Jomful." Instead of applying adhesives, "Jomful" uses an ultrasonic welding method to bond the chip and strap to the substrate. The company says that this increases the speed of inlay production by up to 10 times and results in a more robust electrical connection. The end product has higher survivability and reliability, it says. "Omron is ready to supply the high volumes needed for the supply chain market and lower the total cost for RFID tags," says Arnold. The company will continue to add inlay production capacity to further increase annual production above 350 million inlays within the next 12 months, he says.
http://www.morerfid.com/

Tesco Revises RFID Plans
Tesco, the United Kingdom's largest supermarket chain and one of the key early UHF RFID adopters in Europe, has changed its plans for the technology within its operations, claiming complications from using UHF RFID under European Union (EU) regulations have hampered its use of the technology.
Tesco's Secure Supply Chain trial began in October 2003, with the retailer planning to deploy RFID in its 1,400 stores and 30 distribution centers in the United Kingdom by November 2005. This rollout, which focused on tracking tagged trays of high-value goods transported from the DCs to the stores, was later revised to mid-2006. Currently, Tesco says, only 40 stores and one DC have so far been thus equipped.
"There have been significant challenges with regard to EU standards and operating in dense-reader environments," says Deborah Watson, Tesco's press officer, "but we are working with standards bodies and our partners to deliver the right solution."
Now, instead of using disposable EPC-compliant tags in its shipping trays and on pallets, Tesco reports that the Secure Supply Chain program has evolved into what it calls its Unit of Delivery plan, which will use reusable tags attached to roll cages and dollies. The company hopes this will result in RFID being more widely implemented across Tesco's operations instead of being restricted to certain shipments.
According to Tesco, the change in strategy builds on the lessons learned in its Secure Supply Chain project. The company says the project proved RFID can provide greater supply chain visibility and simpler processes for its staff, while resulting in improved product availability, better service and cheaper prices for its customers.
http://www.rfidjournal.com/

One-Year Payback?
In some cases, it will be possible to achieve a one-year payback on RFID by 2008, according to DiamondCluster International, a Chicago-based management consulting firm. The firm compared various estimates for RFID market growth against conservative return on investment scenarios to reach this conclusion.
"Companies in the health services, particularly pharmaceutical drug makers, high-value consumer goods like electronics and apparel, some select retail channels, transportation and government agencies are where we'll see the greatest success in the near term," said Daring Ug, DiamondCluster partner and co-author of a new report, "Achieving RFID's Full Potential."
DiamondCluster recommends action steps that companies can take to both mitigate the hidden costs of RFID and to ensure that RFID investments are well spent.
http://www.diamondcluster.com/

RFID Certification Training Offered
ASURYS, a business of International Paper that develops and deploys RFID suppply-chain solutions, and RFID4U have partnered to offer CompTIA RFID+ certification training. Most of their interactive training courses will take place at ASURYS' Customer Solution Center, an RFID testing, training, engineering and development center in Memphis, Tenn. RFID4U guarantees that participants will earn their RFID+ certification upon completion of their training program. If they finish the preparation training without the certification, they can attend a future training within a period of one year at no extra cost.
http://www.morerfid.com/


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