I. RFID Advantages

There are many benefactors of this technology: the military, retailers, suppliers, consulting firms, producers of the technology, and consumers. RFID provides companies with a better alternative to bar-coding because no line-of-sight is needed to read a pallet, a carton, or a product with a RFID tag. RFID tags also contain information on the product that is easily readable and accessible for the reader. RFID will also begin to automate company’s supply chain, reducing labor costs, human error and time spent checking in products.

The Department of Defense has created the RFID Military Compliance Solution as a way to help suppliers and manufacturers meet the military’s new standards for RFID. At some point in the near future tags could fall to one cent tempting companies to use RFID tags on every product in a store.

A break-through in RFID technology was made by Intermec, Inc. in May of 2006, with new rugged and reusable RFID tags. RFID enables companies to be more efficient with their time and space. Companies that combine some newer supply chain technologies with RFID could see great results.

The RFID market is booming and many technological companies have gotten in the game producing RFID parts and systems. Hewlett Packard (HP) is one of the largest companies developing RFID systems. HP has made testing RFID products one of their benchmarks, providing intense field-testing of RFID to ensure its durability and quality. IBM has over eleven years experience working with RFID, and like HP, they were an early adopter of RFID technology. IBM’s services promise more results than HP’s RFID systems mainly because of IBM’s consulting expertise.

RFID began to take off once companies like Wal-Mart and Target, and the U.S. military demanded that their top 100 suppliers must adopt RFID technology. Wal-Mart demanded that their top one hundred suppliers would need to be RFID ready by January 2005, and to Wal-Mart’s surprise, twenty three extra suppliers have volunteered to make the change to RFID. The Gen 2 RFID improves on the first generation of RFID by increasing read times, increasing read ranges, and read tags more accurately.

It also saves money in the long-term for manufacturers and suppliers because RFID will save time spent inventorying and tracking products. An advantage for suppliers and manufacturers using RFID is customization of products in a shorter period of time. Smaller suppliers and manufacturers will have a harder time implementing RFID, as costs range from $100,000 to $5 million to implement the technology, but as costs go down more companies will adopt RFID.

RFID does have another potential benefit for suppliers that could give them invaluable information.

Consumers should be the ultimate winner with RFID being implemented throughout a company’s supply chain.

RFID contains many advantages over traditional ways of coding pallets, boxes and products. RFID reduces human labor costs and human errors through the supply chain saving companies money, as well as reducing theft in the store and warehouses. Every level that could benefit from RFID can also reap negative rewards from the technology.

Large companies like Wal-Mart and Target who use RFID face many potential problems with the technology. RFID has no proven infrastructure making it difficult for suppliers to keep up with these company’s demands to become RFID-ready. If the suppliers cannot effectively implement RFID into their business, then retailers cannot fully view their supply chain. High costs of RFID implementation is the reason many mid-size and smaller retailers have not adopted the technology.

Privacy issues are the number one pitfall for RFID and retailers. It was privacy issues that force Benetton to cease their pilot RFID system. Privacy advocate groups such as the Consumers Against Supermarket Privacy Invasion (CASPIAN) fight companies using RFID to track consumer behavior.

Consumers have the largest disadvantage of any other entities involved with RFID technology. RFID makes it easy to amass this data and to designate correlations.

The disadvantages of RFID hinge mainly on privacy concerns, technological imperfections, cost of the technology and no proven way to set up an RFID system for a company. Future of RFID

The future of RFID is uncertain, however, the technology is here to stay. Privacy issues and will persist, although cost for RFID systems will decrease. In order for RFID to be successful, companies must work with privacy advocate groups to develop a fair way to implement RFID without alienating their customers.

Technology will continue to develop for RFID and many new applications will be realized.

Pros and Cons of RFID Technology

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