- Radio Frequency Identification (RFID), a technology that
enables that automatic collection of data on product, place, time or transaction
without human intervention or error, will become increasingly pervasive
and may just replace the good old barcode, said Accenture chief scientist
Glover Ferguson.
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- Accenture is a strong proponent of the technology, having
dealt with RFID since 1997 and seen the immense advantages it offered.
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- In 2000, it coined the term Silent Commerce for a methodology
that was mostly RFID-driven - "silent" because the objects talk
to each other silently without human intervention and "commerce"
because it drives businesses.
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- As the functions of RFID and related technologies broadened
to more than just identification, Accenture adopted another term: Reality
Online.
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- The consultancy group has been working with clients to
explore the potential of Silent Commerce to create a host of new possibilities
and "give inanimate objects the ability to sense, reason, communicate
and act," he said.
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- Accenture has 130 R&D personnel located in three
labs - two in the United States and one in France. Unlike the more academic
R&D done in universities, about 40% of Accenture's research is done
with client or market facing.
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- Its research is tied to the market needs, such as how
to reinvent a more efficient supply chain, Ferguson said.
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- There have been several standards on RFID, the most prominent
being Auto-ID, supported by a consortium formed by Massachusetts Institute
of Technology (MIT) which includes Procter & Gamble, Wal-Mart, Gillette
and Accenture. Wal-Mart recently announced that by next year, its top 100
suppliers would have to use that technology on the pallet and carton level,
and by 2006, the requirement would be expanded to all its suppliers.
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- "That sent a huge message across the industry because
Wal-Mart has many suppliers all over the world. Many are now scrambling
to implement RFID," Ferguson said.
- Though costlier than barcode, RFID has become indispensable
for a wide range of automated data collection and identification applications
that would not be possible otherwise.
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- And as it becomes more pervasive and the cost of the
RFID readers decreases, it would cause further pressure on the price of
the tags.
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- Currently, the cheapest tags cost 10 to 15 US cents,
and readers range from a few hundred to tens of thousands of US dollars.
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- RFID, around since the 1960s, first appeared in tracking
and access applications in the 1980s.
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- The major advantage of the RFID system is its non-contact,
non-line-of-sight nature.
- Tags can be read through snow, fog, ice, paint, crusted
grime, and other challenging conditions, where barcodes or other optically
read technologies would be useless.
- For example, in Sweden, where garbage disposal service
was charged according to weight, RFID tags are imbedded in garbage cans.
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- As it can track moving objects, RFID has established
itself in many markets including livestock identification and automated
vehicle identification (AVI) systems.
- RFID tags can also be read in challenging circumstances
at remarkable speeds, in most cases responding in less than 100 milliseconds.
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- RFID saves costs and increases efficiency to the supply
chain management, where the most economical usage of the RFID is at the
pallet/crate and carton level.
- In-store, RFID can provide more accurate accountability,
better management of inventory and better demand planning.
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- Ferguson noted there had been some concern that RFID,
if used at the retail level on the product itself, was an invasion of privacy.
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- He blamed it on "bad planning", that in announcing
their adoption of RFID, many companies had extolled the benefits of the
technology to their businesses but neglected to show how it would benefit
the end-users.
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- The benefits include lower prices, as RFID reduces the
cost of managing inventory. RFID could also help reduce the counterfeiting
of products, including life-saving drugs.
- Additionally, it could aid in product recall, so companies
and consumers would have total confidence that all tainted products had
been withdrawn from circulation, Ferguson said.
- He said the option "tagkill" could be used
to disable the tag. And even if a retailer were able to capture another
retailer's data from an RFID tag, that data would be useless because of
encryption and other security mechanisms retailers would build in to protect
consumer privacy and the retailer's data, he added.
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