As with any new technology, several issues must be addressed before large-scale adoption is considered. While these issues will be resolved in due time, understand that RFID presents opportunities that can be leveraged today. For an enterprise wishing to capitalise on the opportunities that RFID presents, I recommend that it start using the technology today and, at the same time, work to develop a long-term strategy. Let's look at the what, why, where, and when of RFID.
What RFID is
At a high level, RFID is an e-tagging technology that can be used to provide electronic identity to any object. Electronic information about an object is stored in RFID chips embedded or attached to the object. Using an RFID reader, the electronic identity (code in the form of several bits of data) can be read wirelessly using radio waves. This is where it differs from other e-tagging technologies such as barcode scanning, which uses optical recognition. Because it uses radio waves, no line of sight is required and RFID tags embedded inside an object can be sensed. Further, an RFID reader can read multiple RFID tags simultaneously, which is not possible using barcodes. An RFID reader at the gate of a warehouse, for example, can immediately sense all the RFID-tagged objects within a container as soon as the container passes by the gate. RFID tags can either be passive (cheap and work without any battery) or active (costly, yet have an embedded power source). Further, the electronic identification stored in a tag can either be fixed or dynamically updatable.
The range of sensing RFID tags from an RFID reader can vary from a few centimetres to a few metres depending on the frequency of operation and the type of tags. RFID tags are very rugged and come in several form factors. The RFIDs can even be embedded in a piece of paper or in a form that can be permanently tagged to a shirt. In large volumes, RFID tags can be very cheap. By 2005, the cost of passive RFID tags is expected to fall below 5 (3.14p) cents per unit.
Why RFID technology is so critical to an enterprise
The ability to bring otherwise passive objects online can have several benefits to businesses, especially those in the supply chain, retail, and consumer-packaged goods market. RFID technology can be used to effectively integrate the physical assets (inventory, equipment, infrastructure) with the overall IT infrastructure. Besides increasing the accuracy and flexibility of operation, the integration of physical assets to the IT infrastructure can provide a real-time view of demand, enabling a true "sense and respond" enterprise.
