Inventory Accuracy RFID Update:

RFID started getting so much attention back in 2003/2004 that I decided to dedicate a a full section to it here. Fortunately much of the hype related to RFID has subsided in recent years, but it is still a technology to watch. The information on this page is designed to supplement the RFID section of the book. Also check out the New Definitions on the bottom of the page and related links on the RFID Links page.

You may also want to check out my other RFID Update at (my primary website) for more information on RFID, Wal-Mart, EPC, Privacy Concerns and More.


These technology updates are intended to supplement the information in the book, Inventory Accuracy: People, Processes, & Technology

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A lot has happened in RFID since the book was published. Though universally accepted standards are not yet in place, GTAG and EPC have been getting a lot of attention. EPC (electronic product code) is sort of the RFID version of the UPC barcode. It is intended to be used to identify specific products, as well as cases and pallets. GTAG (global tag) is an international standard that can be used for more general asset tracking. Until recently, RFID readers and the related software were designed to work with RFID tags from a specific manufacturer. In this respect, these were essentially closed proprietary systems. The adoption of data standards as well as technical standards is critically important to extend this technology beyond individual stand-alone systems.

Wal-Mart announced they would require their top 100 suppliers provide RFID on cases and pallets. The Department of Defense followed with it’s own RFID program as did Target. All these RFID initiatives are focusing on the EPC standard (or variations of the EPC standard).

In 2003, Gillette announced that they would start testing "smart shelves" in selected stores, and then promptly put the project on hold after privacy concerns were voiced. As the name would imply, a smart shelf is a shelf that has capabilities beyond just preventing the product from falling on the floor. In this instance, the shelf has an integrated RFID reader. Each unit on the shelf will have an RFID tag, allowing the reader to track inventory levels. The purpose of the smart shelf is to support replenishment, ensuring the shelf is never empty.

All this activity (especially the Wal-Mart announcement) seems to have energized the RFID industry and convinced the makers of portable data collection devices to get on the ball and start integrating RFID readers into the portable devices. It seems as though all of the major suppliers of hand-held portable industrial computers now have at least one model with an integrated RFID reader. For the most part, these basically consist of an RFID antenna attached to one of their current models of portable terminals. .

This provided me the opportunity to start asking some tough questions related to the technology. Most importantly, I inquired about problems related to applications where selective scanning was necessary. Currently, the majority of RFID use in warehouses and manufacturing facilities is related to large pallets or containers moving into and out of trucks or through various parts of the facility. There is generally only one RFID tag per pallet or container and the scanning occurs when the the pallet or container passes through a scan tunnel ( a scan tunnel is really just a large frame with RF antennas mounted on it). This provides a controlled selective read of the loads as they pass through the scan tunnel.

But now, with RFID expanding to hand-held devices, how do you make sure you are reading only the tag you intended to read? I talked to one vendor that was demonstrating the reader with both a palletized load and an individual case. I immediately noticed he had strategically placed the single case well away from the pallet with the other RFID tags. So I asked him, what if this case was right next to this pallet, could I still just scan the one case? He answered "no". The problem was that even though this RFID reader was designed as a directional reader, it was also designed to read tags from a distance exceeding six feet. Which means, unless you maintain a significant clear area around the individual loads you intent to read, you will risk unintentionally reading other tags. Another hand-held device I looked at did not use a directional reader, which ultimately results in the device reading any tag within a three to four foot spherical area around the reader regardless of the direction the user thinks he is pointing the device.

The problem here is RFID is being demonstrated in traditional bar code applications. It simply makes no sense to use RFID in an application where bar codes work better and are cheaper. Unfortunately, it is yet unclear as to where RFID will find a home in inventory transactional processes. Because of this, hand-held device manufacturers are not sure how to design the devices. Should they be directional? If so, how tight should the directional capabilities be? What will the desired read distances be? From my perspective, using RFID with hand-held devices for inventory transactional processes in the warehouse and on the shop floor is still in the experimental stage. The technological capabilities are there, but we are not yet sure what the application is. It's clear that the manufacturers of the hand-held devices shared this view as their RFID devices were really just one of their portable bar-code computers with an RFID antenna added to it. If you think I was critical of hand-held computers before, you can only imagine my thoughts as I picked up these RFID devices that were almost twice the size and weight of the original hand-held device.

So let's go back to the more popular scan-tunnel applications. These applications are currently in place in many operations and are well beyond the experimental stages. The most common application involves a single RFID tag that is attached to a reusable pallet or container. The tag contains a unique code that corresponds to data maintained in the company's computer system. This data describes the load (SKU numbers, quantities, order numbers, etc). When used in receiving, the data was likely received before hand in the form of an advance shipment notification (ASN). When the load comes off of the truck and passes through the scan tunnel (usually mounted just inside the dock area), the RFID antenna reads the signal and completes a transaction receiving the contents into stock. On the outbound side the process would be reversed. Within a manufacturing environment, passing through the scan tunnels may update operational status of the associated production order or may just track physical location within the facility.

This is a useful and relatively simple application of RFID technology. In the design of this type of system, you need to make sure you provide programming to deal with the possibility that something may pass through the scan tunnel multiple times. For example, a lift truck operator loading a trailer may need to unload and then reload the trailer if a problem occurs during the loading. Or, depending on the position of the scan tunnel, the lift truck operator may move back and forth to adjust loads on the back of the truck. There are also some technical challenges when more than one scan tunnel is used in the same area (such as side-by-side dock doors).

One of the big advantages of RFID being promoted is the ability to read RFID tags through other objects. This brings up the scenario where an RFID tag is placed on every carton or every individual item. When a palletized load passes through the scan tunnel, the reader will register all of the tags on the pallet, thereby providing a potentially 100% check of the entire shipment almost instantaneously. I'll admit this sounds wonderful from both an accuracy and a productivity perspective, but, as you may have suspected, I have some concerns. Since RF signals have problems with some materials (metals, some liquids, lead-lined underwear), I think we can assume that this application will be limited to tracking of products that do not block or otherwise interfere with the RF signals. This is an area to watch closely to see if tag manufacturers are able to produce low-cost tags that can minimize this interference.

And remember all the hype about the capabilities of RFID tags to have data written to them (added or changed) at various points in the supply chain. Well, the capabilities are there, but none of the pending standards or touted applications currently in the works are utilizing this capability. Nor are they taking advantage of the ability to store more data in an RFID tag than they could in a 1D bar code. In fact, the largest benefits to the pending EPC initiative are actually more related to the architecture and standards for storing and sharing information between trading partners than they are to the functionality of RFID itself. This information depository known as the EPC network has very little to do with RFID technology. In fact, the EPC network could essentially run with bar codes as the input rather than RFID tags. Read the EPC Misconceptions section (next) for more details and also check out the New Definitions at the bottom of the page.

As a general recommendation, RFID is not yet practical for most businesses looking to automate their inventory related transactions. In the next few years, standards will be finalized, hardware prices will drop, software will become more readily available, and, more importantly, the bugs will be worked out of these systems. Let the Wal-marts and other big companies pay the initial development costs and bear the brunt of the pain related to early adoption. Meanwhile, bar codes remain the most practical option.

You may also want to check out my other RFID Update at (my primary website) for more information on RFID, Wal-Mart, EPC, Privacy Concerns and More.

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New Definitions

EPC—electronic product code. EPC is the RFID version of the UPC barcode. EPC is intended to be used for specific product identification. However, EPC goes beyond UPC by not only identifying the product as an SKU, but also providing access to additional data (via the EPC Network) about the origin and history of the specific units. The EPC tag itself identifies the manufacturer, product, version, and serial number. It's the serial number that takes EPC to the next level. This is the key to data related to specific lots/batches as well as potentially tracking the specific unit's history as it moves through the supply chain. This data is stored somewhere else (the internet or other network) but a standardized architecture allows you to access the data much like you would access a web page (though this would be happening automatically behind the scenes).

EPC Network—an architecture similar to the internet designed to store and allow access to data related to EPC. For example, detailed item information such as description, ingredients, size, weight, cost; manufacturing information about the specific lot such as when and where it was produced and expiration dates; and distribution information about where it has been including addresses, dates and times. The data could be as detailed as including environmental factors such as temperatures during manufacturing or storage. This data flexibility is accomplished through the use of a new computer language called Physical Markup Language (PML) which is essentially a variation of the more commonly known Extensible Markup Language (XML).

GTAG—global tag. GTAG is an international RFID standard that can be used for general asset tracking.

Slap-and-ship—term used to describe an approach to complying with customer requirements for physical identification of shipped goods. Most recently, slap-an-ship has been used to describe complying with RFID requirements (such as those from Wal-Mart), however, it is also applicable to any compliance labeling requirement (such as compliance bar code labels). Slap-and-ship implies you are meeting the customer's requirement by applying the bar code labels or RFID tags, but are not utilizing the technology internally.

Smart shelve—as the name would imply, a smart shelf is a shelf that has capabilities beyond just preventing the stored product from falling on the floor. In this instance, the shelf has an integrated RFID reader. Each unit on the shelf will have an RFID tag, allowing the reader to track inventory levels in real time.

Go to Inventory Accuracy Glossary for additional related terminology.

Go to RFID Links for links related to RFID technology.

Go to Tech Updates for additional technology updates.

Go to's RFID Update page for additional RFID info.