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Posted on February 07, 2005

Item Level RFID Gathers Pace

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Item level RFID is the Mount Everest of RFID, with by far the largest potential at up to ten trillion tags yearly as most barcodes are replaced. Infrastructure, software and services to make it happen are likely to approach one hundred billion dollars yearly across the world - roughly the sum that will be needed for the tags. Item level is a term that usually refers to fairly small items in high volume. We do not include animals, where about one billion, relatively expensive tags yearly will be needed in 10-15 years. Vehicles, transport containers, conveyances and so on are not called "items" - they also need very different RFID tags and infrastructure at very different prices. The biggest potential for item level after consumer packaged goods is the postal items, books and the packets of drugs we see in the home. These add up to enormous figures as we show below.
 
Potential maximum yearly sales by 2020 or earlier for different types of item level RFID tagging
Source: IDTechEx
So much for the dreams. In the harsh reality of today, many could be forgiven for thinking that item level tagging is entirely on hold as the severe problems of the chosen UHF frequency for pallets and cases are tackled. After all, the tagging of pallets and cases is mandated by leading retailers and the US Military and they want it now - primarily to save cost and improve performance. Item level tagging offers far more benefits than case and pallet tagging. They include crime reduction, error prevention and brand enhancement as well as cost, service and so on. It is only with item level tagging that the consumer will clearly see benefits. However, attractive as this may be, when you are up to your neck in crocodiles you do not plan to drain the swamp. Tesco, Abbott Laboratories, Gillette and others have put item level work on hold as they wrestle with making UHF pallet and case tags work near metal and water ie in real world situations and to the necessary very high levels of accuracy and reliability. They also have to obtain the specialised tags and infrastructure at realistic prices.
 
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Nonetheless, the travails on pallets and cases are far from the whole story. Others with their own priorities are proceeding very rapidly to trial and roll out item level tagging with excellent paybacks, usually employing the well proven 13.56 MHz frequency where the environment and production quality are less of a problem. That is not to say that UHF systems will not work well at item level one day: indeed, many practitioners favour it for items of retail apparel which is dry and not necessarily near metal. Here the extra range at UHF can be valuable because these items are often bulky. All we argue is that, for now, the world's UHF experts have more immediate situations to optimise - that means pallets and cases for nearly 100,000 suppliers of Wal-Mart alone.
 
So what is it that is quietly going on at item level? The IDTechEx Knowledgebase External Link is a good resource here. It has 1300 cases of RFID in action in over 40 countries, whether trials or full rollouts. Of these, there are about 150 that we could call item level by our definition but the list is growing very rapidly. We have fresh food tagged in Botswana and Japan, survival equipment in France and cigarettes, videos and even artificial logs in the US. Supermarket items have been tagged in the Philippines. Most are trials of course but gas cylinders and beer barrels tagged in Denmark, the UK, France and elsewhere have long been full rollouts with excellent paybacks of one year or so. And this is a worldwide phenomenon. Their objectives vary greatly of course and the list changes by the day. Those that quietly get on with item level tagging are increasingly reaping rewards.
 
Examples of item level tagging of packages
 
Source: IDTechEx
 
To see other examples read Item Level RFID External Link, RFID Market Forecasts, Players, Opportunities 2005-2015 External Link and attend the major conference Smart Labels USA External Link 2006.