What is RFID?

The Basics of RFID and EPC

Radio Frequency Identification (RFID) is technology used to track and trace objects using radio waves. Each RFID application consists of RFID tags, readers, and a computer system. Tags are made up of a microchip and an antenna and come in a variety of shapes and sizes, but as the technology advances, tags are getting smaller.

The market has developed a variety of tags to meet different tracking and tracing requirements. Some tags are passive, meaning they do have their own power source. These are the more typical and low-cost tags and the ones most often used to track consumer goods and food. Other tags are active, having their own power source that send out signals to readers at predetermined intervals. There are also semi-powered tags referred to as semi-passive tags.

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Benefits of EPC RFID

The EPCglobal Network^TM will deliver benefits both in terms of financial and strategic terms. Benefits may be in the form of dollar savings and operation efficiency, whether it is asset tracking, claims handling, freight delivery, warehouse efficiency, storage optimisation, promotions planning, etc.

Benefits that have been identified include:

Faster and more accurate reads. An EPC reader can instantly detect all EPC RFID tags passing through its radio frequency field. As a result, it is capable of reading every tagged object in one operation, thus removing the line of sight requirement for reading product identification numbers. Typically, EPC RFID readers are able to operate without manual intervention and so produce consistent and precise results.
Accurate and trusted data. The EPCglobal Network will enable any individual item to be accurately tracked and traced, allowing any errors or process deviations to be immediately highlighted and rectified. This will result in systems maintaining accurate, trusted data from which operators can make accurate, trusted decisions.
Lower inventory levels. RFID can reduce inventory levels and improve product availability by providing trusted real-time information about where products are. This gives companies the confidence to reduce inventory buffers along all parts of the supply chain, improving cash flow and potentially reducing overheads.
Fewer out of stocks. RFID has the potential to inform staff or alert managers when shelves require re-stocking or a product is placed in the wrong location. Retailers generally use the estimate that one percent uplift in shelf availability results in a half percent increase in sales.
Reduced shrinkage. It is estimated that two percent of sales is lost due to shrinkage. By scanning EPC RFID tags to accurately identify stock actually received, RFID can reduce shrinkage for the average retailer by up to 25 percent at the case level and 40 percent at the item level. (Source: GCI EPC Roadmap, Nov 2003)
Better asset utilisation. The EPCglobal Network will enable companies to track and manage their reusable assets - roll cages, crates, dollies etc - more efficiently and accurately, leading to a reduction in the required number of capital assets employed within the business.
Anti-counterfeiting. Tags act as a deterrent to counterfeit manufacturers. If a tag is damaged or absent from the product then suspicion is aroused. Tag data can be encrypted, read, and cross-referenced to the manufacturer's database to determine authenticity.
Targeted recalls. Product recalls can be significantly improved. The EPCglobal Network will allow each item to be uniquely tracked and traced, enabling the exact location of an item to be known so that only those items that have been affected are recalled, thereby reducing costs and minimising damage to the brand.

If you require additional information please contact Gary Hartley on 04 494 1063 or email gary.hartley@gs1nz.org.