The fourth Smart Labels USA conference took place in Baltimore and it was attended by over 400 delegates and had over 40 exhibitors, following a similar success the year before. The subject is moving on, with an important new element being the interest in how to make the RFID smart labels, a topic well served by this conference. It is now clear that most (but not all) pallet and case tagging in the world will be at UHF frequencies but the jury is very much out on item level tagging, with speakers variously advocating 13.56MHz, UHF and 2.45GHz, each based on major field experiences.
Dr Peter Harrop of IDTechEx, a consulting company that hosts Smart Labels USA yearly, opened with a tour of the applications and market sizes. Even half way into 2005, it was still uncertain what would be the second largest market by value across the world, though RFID smart cards are in an unassailable position at the top. Contenders for number two include animal tagging and item level tagging. Anyway, things are definitely not as forecast by the industry only one year ago mainly because EPC smart labels for drugs, pallets and case are being used at one-tenth to one-hundredth of forecast levels. He explained some of the problems and particularly difficulties with the UHF frequencies chosen for most pallets and cases and being considered for some item level tagging. He was optimistic that these problems, which are more numerous than anyone envisaged, will be overcome. Deliveries of UHF labels are rising rapidly.
Gerald Darsch of the US Military gave a charismatic review of a wide variety of smart packaging and RFID applications and developments. Today, most of the RFID in the military sector is at 433MHz and not labels. There are long range tags, often with sensing, but the higher volume, simpler tagging is now being addressed. He reminded us, however, that there is considerable potential for smart labels that are not electronic. Some control the preservation of food, for instance.
Bob Nonneman of UPS described trials of active and passive RFID on vehicles and passive RFID on trays, parcels and small packages. 99% reads were obtained on small packages - the same as the figure achieved with barcodes and therefore no business case was identified. One gained the impression that UPS is only interested in UHF and is not particularly keen of RFID to contrast to its competitor DHL which is taking bids for one billion 13.56MHz (HF) labels.
Erik Henrikson of the FDA graphically described the horrors of drug counterfeiting of both package and content, repeating the judgement that RFID "pedigree" traceability is the best way of tackling counterfeiting, though it must be used with other technologies, of course, including chemical analysis. The FDA is still urging widespread RFID on drugs by 2007 and all eyes are fixed on the Florida pedigree law calling for action by July 2006. However, we note that with only a few drugs being tagged in 2005 (only Oxycontin now), several starting only near year end, there may be as few as 20 million RFID tagged out of billions of prescription drug packages used globally in 2005. The FDA is concerned that RFID backup is available because dead tags are significant. 2D barcodes may be a good backup, said Erik. Drug counterfeiting in the US is a "small but growing problem".
Damage to packaged drugs?
Dr In. K. Mun of Aventura Hospital and Medical Center, USA, raised several concerns with RFID, despite the fact that hospitals are eagerly acquiring the technology. For example, it is thought that RFID fields may possibly alter the molecules of large protein cancer drugs which have many labile bonds. MIT, HRI and PQRI are investigating this. He considers UHF RFID to be risk in hospitals, potentially interfering with heart pacemakers, etc. Harvard Medical School is checking this out. His organisation is frequency agnostic as yet but will need a lot of convincing about UHF even if it does not damage drugs, because he sees it badly affected by water and metal and can heat water-based items.
He counselled that healthcare is a very different environment with a need to read one at a time and excellent backup for failed RFID must always be available. Healthcare has much greater requirements for reliability than other sectors. However. 3-5 year payback is acceptable vs 1-2 years demanded elsewhere. Where batteries are used, they must have at least 3-7 year life. One dollar patient wristbands are a great improvement on barcoded bands but hospital projects for these are delayed by infrastructure. Tagging hospital assets can save $40 million yearly in the US. Surgeon's tools are tagged at 125-135KHz because that is what works.
Dai Nippon Printing (DNP)
Hiroaki Kabamoto of Dai Nippon Printing, Japan, described the work of this $12 billion printing/electronics company. It has recently launched a metal tolerant 13.56MHz tag and it is trialling other tags in books where the primary problem is theft of comic books in bookstores in Japan. Total DNP RFID capacity will be 120 million yearly soon - modest. He said that Japan has very different supply chain challenge from those in the west. For example, shrinkage is low already. Because UHF has been illegal in Japan, DNP has its main applications at other frequencies, but it is doing UHF trials at its Charlotte plant in the US.
McCarran International Airport, Las Vegas, USA, is in the lead with baggage tagging with RFID. Initially, the RFID label is stuck on the existing paper bag-tag but later the RFID inlet will be inside. The total cost is borne by the airport - for the tags and the system. The 96-bit read-only label may become read-write later for airlines to add additional data. For now, the motivation is purely for the airport to automate security screening. It will be live in July 2005. About 68,000 bags per day (25 million each year) must be tagged. With barcode reading only 85-90% of the time and RFID at at least 99.8%, there are cost savings to be enjoyed. To cope with the sensitivity of UHF to water and metal and to ensure that only bag at a time is read despite the (sometimes) long rage at UHF, all bags enter a screened area for interrogation on the carousel and this takes only one item at a time. The main cost at Las Vegas is the security sorting buildings containing the conveyors and X-ray equipment, etc. Currently the RFID enabled bag tags are 20 cents vs 2.5 cents before. McCarran already has Automatic Vehicle Identification (AVI) on cabs and buses, etc, in the airport campus.
Dr Patrick King of Michelin acknowledged that RFID is yet to appear on tires in production anywhere in the world but work is well advanced to do this, to a restricted number of specifications and with cost benefits not just help in complying with the US TREAD act. Intermec has produced a porous UHF tag that is sealed in the tire but lets it breathe. A special chip tolerates the curing process. It is Philips U-Code EPC compliant. The tag is in the sidewall for best read and least chance of confusing one tire for another.
Aircraft parts and packages
Ken Porad of Boeing and his partners in Airbus collaborating on RFID tagging of parts, have trialled 13.56MHz (typically one foot range) but are keen on UHF (typically 8-15 foot range in an aircraft because of reflections and frequent interrogations through non-metallic screening). Only 5,000 types of part will be tagged on aircraft initially but the benefits extend through security to safety, cost and service. Boeing and Airbus need 64KB UHF read-write tags. These do not yet exist.
Natalie Hughes of EPCglobal described its origins, evolutions and objectives. It now has over 520 members. An item level working group has recently been set up that will recommend frequency, etc. In answer to questions, she said that Gen 2 supports a royalty free process. Unfortunately many in the audience took this as meaning EPCglobal is in denial concerning Intermec patents and intention to seek widespread royalties.
Smart cities in Korea
The first day of the conference ended with Guenho Lee of Korea u-City Forum describing very "big picture" RFID projects in the form of implementations in cities. The elderly, cellphones, aircraft parts, freight and tourist cards will all be RFID enabled but there will be much more.
to read the full conference write up, covering three day-long tracks of users, technologies and systems and much more, subscribe to Smart Labels Analyst.
To learn more, attend Smart Labels Europe 2006, Sept 19-20, www.smartlabelseurope.com .
The next Smart Labels USA conference and exhibition will be held in Boston, MA in 2007.