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RFID: it’s slick, it’s sexy and it’s sophisticated. It offers countless benefits to the retail supply chain, from faster stock replenishment to reduced inventory costs and improved product traceability. Next to its high-tech image and much hyped capabilities, the familiar bar code now looks unglamorous and a little dated.

Nevertheless, at present it seems processors and packers across all sectors are sticking with bar codes – at least when dealing with primary packs.

“RFID technology is not completely there, and neither is the demand,” says Aled Ellis, marketing manager with The Needham Group. “It’s something that will come eventually, but we don’t know on what scale, and it’s not something customers are asking for at present.”

Simon King, director of Domino’s Integrated Solutions Group, says: “When people are investing in new systems for primary pack coding, it’s in bar coding systems. We have some RFID activity in the UK, but it’s only a handful of projects.”

This reticence is largely due to the attitude of the retailers. Unlike in the US, where Wal-Mart has mandated the use of RFID tags for some individual items, and in Germany, where Metro is starting to do the same, UK manufacturers are not under the same pressure from retail customers to implement RFID coding on primary packaging.

Supplier benefits
There are other factors. While the benefits to the retailer of adopting an RFID infrastructure are apparent, unless suppliers have problems with stock going missing, their case for RFID is less clear-cut.

“If you read the Wal-Mart business case it’s very heavy on benefits to Wal-Mart, such as tracking products more efficiently so they can get products in-store more quickly and reduce out-of-stock ratios. For the manufacturer who has to tag the product, where’s the benefit?” asks King.

However, he says there are some opportunities for suppliers “when you lift up the bonnet of RFID”. He cites the example of paper products manufacturer Kimberly-Clark, which has been extolling the virtues of tagging goods as a way to improve the execution of in-store promotions.

The wider scanning range of RFID and the fact it does not require line of sight to operate can generate other benefits for the manufacturer or packer: tags in a carton may be read without the carton being opened. Bar codes, on the other hand, offer only a limited read range and require line of sight to be scanned. Mike Whiteoak, marketing manager with Markem Systems, explains how this particular capability has benefited one of its customers, a Mexican bagged snack manufacturer.

“Bulk sacks of product reach the packing station from various bagging lines and, because they are literally thrown through a hatchway into the warehouse, cannot be identified by line-of-sight bar code scanners. RFID provides a surprisingly effective solution in an otherwise low-tech environment,” he explains.
The pharmaceutical industry is often regarded as a sector where item-level tagging could help tackle counterfeiting. Whereas bar codes can be reproduced, tags have a unique identity code embedded in the microchip that may not be altered, which makes counterfeiting very difficult.

But while it’s a concept the industry welcomes in theory, the reality is that few producers can afford to tag each pack of drugs. Instead, the approach advocated by the European Federation of Pharmaceutical Industries and Associations is to laser-etch or print 2D Data Matrix codes onto primary packs, as these are more cost-effective and achieve the same end.

Cost is often cited as a barrier to the uptake of RFID because, as Graham Hogg, R&D manager at Allen Coding Systems, points out, the cost of tags means it’s not necessarily economical to tag at item level, particularly when high-volume bar codes cost virtually nothing.

Data generation could also be a problem, according to Hogg. While the quantity and complexity of data that can be encoded on an RFID tag is part of the technology’s appeal, it could also be a turn-off to some potential users.

“If you’re in a high-volume production environment and you tag at item level, you’re going to produce masses of data. It is questionable whether it makes sense to give a product like a sandwich with a cost price of, say, 30 pence, a unique serial number, as within a couple of days the unit will have been consumed, but you will have created thousands of serial numbers in your database.”

He says another issue with RFID is read rates – although it is quicker to read RFID tags than bar codes because there is no need for line of sight with RFID, if the RFID reader only detects 95% of the data, any cost savings and efficiency improvements are nullified.

“If you’re putting these tags on your products, you need to be confident that you are actually capturing all the information. There are various things that could influence read rates. You get hot spots and dead spots because of reflections from the infrastructure within the building. You also get issues as a result of the frequencies interacting with fluids or metals, or as a result of the orientation of the tag.”

However, many of these issues have been resolved with second-generation tags. For example, SATO, in conjunction with UPM Rafsec, has developed a patented solution to the problem of metals and liquids affecting the radio signals.

Higher priorities
When all these factors are considered, it’s not surprising that RFID tagging at unit level remains a low priority, and that industry is instead focused on case, roll-cage and pallet-level tagging for monitoring products through distribution centres.

“Retailers aren’t forcing suppliers to do it, but obviously supermarkets have the ability to read these tags – they have set up their distribution centres to be able to cope with RFID-tagged products as well as standard bar codes,” says David Miller, business development manager at DataLase.

RFID tags embedded in self-adhesive labels can be applied to cases or pallets using an RFID-enabled print-and-apply system or desktop label printer. The same equipment can be used to print bar codes and human-readable information on the label and to encode the tags. So for customers just requiring traditional bar codes, the label roll can be changed to normal labels.

And according to Martek’s sale director Scott Payne, for the majority of applications there is very little difference between conventional print-and-apply systems and RFID-enabled versions of this equipment.
“When creating a label design the RFID data is entered manually or automatically in much the same way as a bar code field and step-by-step wizards guide the user through the process.

“The main difference in operation is that smart labels contain a small percentage of ‘bad tags’, ie tags that cannot be written to. With a desktop label printer, the RFID antenna checks the content of the RFID tag immediately after encoding and if the system does not read back the correct data then the label is overprinted with a void message so the operator knows not to use it. The printer automatically encodes the next tag with the same data so labels are not missed.”

In Martek’s Delta Enhanced series of print-and-apply systems, bad tags are automatically redirected to a reject panel to ensure they are not applied.

Tagging factors
But it’s not quite as simple as just slotting an RFID-ready label applicator into your production line.

“You’ve got to make sure you put the right tag on the product in the right location to minimise interference and maximise read rates. You’ve got to make sure the tag corresponds to the encoding and reading device you’re putting on your line and that you’ve got the right software to make sense of it all,” says Domino’s King.

Such RFID-enabled equipment seems to be presenting little threat to bar coding systems.
DataLase, for example, doesn’t see any need to launch RFID-ready equipment when its laser coding technology is already taking on traditional bar code labelling technology.

With the DataLase system, cases are pre-printed with a patch of CaseMark material where the label would normally be. On the production line, bar codes are laser-etched directly onto the boxes, eliminating the need for consumables such as labels, backing paper and ribbons.

Even RFID technology suppliers often have significantly more standard coding systems on their books. Domino is a good example, as it has been developing its thermal transfer overprinter products to print variable data, including text, time, date, bar codes and Data Matrix codes, onto webs of flexible packaging. It’s V200+ machine was launched at Total, where coding certainly had a higher profile than RFID machines.

Most suppliers agree that it is unlikely RFID will ever completely replace bar coding due to the lower cost of bar coding and reading equipment and the fact that RFID is economically unviable for low-value, high-volume items.

“RFID will be used in conjunction with bar coding rather than replace it,” predicts Payne. “As larger retailers start to use RFID on a large scale, manufacturers will find themselves needing to tag products for some customers and use coding for others.”