Information logistics
Dr. Bernd Reineke, Managing Director of Abels & Kemmner GmbH
With the availability of the new Generation 2 tags, many companies are once again asking themselves whether the time has finally come for them to use Radio Frequency Identification (RFID) technology. As with the introduction of any new technology, RFID raises questions about suitability and reliability, additional benefits and profitability. In the run-up to an RFID project, a detailed examination and, if necessary, pilot tests should therefore clarify key points.
With any new technology, early adoption is always associated with risks, but it also always offers opportunities to achieve enormous competitive advantages. Of course, this also applies to RFID technology. It actually offers everything that logisticians can only dream of: contactless reading of information without visual contact, decentralized updating of information directly on the product, automatic stocktaking at the touch of a button, automation of logistical workflows and manufacturing processes, detection of stock-out situations, and so on. All in all, huge savings potential and an enormous opportunity for business process optimization. In addition, the new Generation 2 tags make RFID use even more secure and flexible thanks to additional frequency bands, faster transfer rates and lower susceptibility to interference.
Of course, there are already successful RFID applications that serve as benchmarks: Car immobilizers, access control (e.g. at ski lifts), animal identification, toll control. However, these are usually not transferable one-to-one to corporate logistics; with all these solutions, people can intervene manually in the event of problems or errors are accepted within a certain tolerance. But what if a reading accuracy of only 96% is achieved in the logistics process during bulk detection? If booking processes, e.g. in the ERP system, are linked to the reading processes, stock discrepancies quickly arise, leading to considerable disruptions in the logistics process. Without careful examination, planned benefits can quickly turn into damage. Before investing in the new technology, its applicability must therefore be carefully examined.
| Low Frequency (LF) | High Frequency (HF) | Ultra-High Frequency (UHF) | Microwave (MW) | |
| Frequency | 125 – 134 kHz | 13.56 MHz | 868 – 915/925 MHz | 2.45 – 5.8 GHz |
| Market share* | 74% | 17% | 6% | 3% |
| Reading distance per reading unit | Up to 1.2m | Up to 1.2m | Up to 3m | Up to 15m |
| Speed | + | ++ | +++ | ++++ |
| Metallic environment | +++ | ++ | + | – |
| Wet environment | +++ | ++ | + | – |
| Alignment of the transponder to reader required | No | No | Partial | Yes |
| Accepted worldwide Frequency | Yes | Yes | Partial (EU/USA) | Partial (not EU) |
| Existing standards | ISO 11784/85 ISO 14223 | ISO 15693 ISO 14443 | ePC in Preparation | None yet Standards |
| Most important applications | Access, Immobilizer, Container, gas Animals, Laundry | Pallet, Truck, trailer Persecution, … | Road tolls, … |
Figure 1 Technical framework conditions
The following procedure is recommended:
- Definition of the RFID application area
Identification of the processes, the affected products and the application environment with regard to the expected optimization potential and implementation options. There is potential for optimization, particularly in the automation of manual activities, the recording of mass data, error prevention and traceability down to the individual product. - Definition of technical specifications
With the help of RFID experts, the right standards and the right hardware must be selected, taking into account environmental conditions, materials, quantity structure, connection to the company IT, tag cycles, etc. (Fig.). A decision must be made as to whether closed tag loops (i.e. reuse of the RFID tags) or open loops with loss of the tags should be selected. The latter can have a considerable influence on the achievable ROI (see point 4). - Carrying out a feasibility study
Before the ground-breaking ceremony, pilot installations must be carried out in the actual environment in order to test the feasibility of using the selected RFID technology. In addition to the reading quality, compliance with the prescribed limit values for the effect on humans should also be checked here. The equipment required for these tests can be provided by consultants or appropriate institutes. Only when the facts are on the table and feasibility has been proven can a decision be made on how to proceed. - Profitability analysis
After estimating the potential savings to be expected through optimized processes, error prevention, traceability, etc., the investments to be made must be compared and evaluated. If cross-company processes are affected by the use of RFID, possible savings with the business partner must also be taken into account. However, the prerequisite for this is that the business partner contributes to the costs or rewards the added value accordingly. - Preparation and application in a pilot area
In a small, manageable area, processes can be optimized and adapted with the use of RFID. This enables experience to be gathered at low cost and creates confidence for the subsequent rollout phase. - Rollout to other areas/products
However, a structured approach alone is no guarantee of a successful technology launch. External support is highly recommended, especially when dealing with the diverse RFID technology for the first time, despite standardization, and the associated logistics and IT adjustments that are usually required. Bad investments can thus be avoided. And the project is usually completed in less time at a lower overall cost. In addition to the necessary technical know-how, particular attention should be paid to experience in optimizing internal and cross-company business processes when selecting experts. Ultimately, the main potential of the new technology lies in business process optimization, which should be approached as holistically as possible, i.e. with the involvement of suppliers and customers if necessary.
In addition, the introduction and implementation competence is also a decisive criterion. Choosing the right service provider is not easy, because you won’t find providers of this type like sand by the sea. Smaller, but highly specialized application consultants are ideal, as they can call on system houses and institutes in the competence network flexibly and on a case-specific basis, making it possible to compare and try out products from different hardware and software manufacturers. The focus is always on efficiency. This is usually achieved by synchronizing production with the market and thus increasing delivery readiness while at the same time reducing inventories. If this is possible, and according to all known studies this is the case for most companies, the introduction of automatic recognition systems such as RFID pays for itself within a very short time.
