"It is
highly doubtful that an industrial tag satisfying the needs of the
industrial sector will ever be available for 25 cents," declares
Hornis, let alone the nickel price long projected for RFID tags of the
kind developed for use in retail supply chains. Pricing today ranges
typically from $2.50 up to $50 each for industrial RFID tags sold by
Twinsburg, Ohio-based vendor Pepperl+Fuchs Inc., for example, where
Hornis is intelligent systems group manager. And some industrial tags
designed for high-temperature applications sell for up to $300 each.

How it works

The “tags” that Hornis describes, also called transponders, are small memory devices equipped with antennas that enable them to receive and respond to queries from RF transmitters/receivers—used in RFID systems for reading and writing information to the tags.

In the retail supply chain, low-cost, passive tags written with product identification information are attached to pallets, cartons and packages prior to shipment; these tags can then be automatically read and recorded to inventory at the receiving end. In the industrial world, automakers, in particular, have long used RFID tagging to track products and process events on production lines. The technology has lately been making inroads among automotive suppliers, and is also getting greater use in other industry segments, including electronics, aerospace and pharmaceuticals.

Intier Seating, an automotive supplier based in Mississauga, Ontario, Canada, credits an RFID system supplied by Escort Memory Systems (EMS), of Scotts Valley, Calif., with enabling it to meet strict Sequenced Part Delivery requirements for seats made for Ford Motor Co. The ability of industrial RFID to reduce identification errors on Intier’s automated lines to nearly zero, as well as its ability to record test and assembly data, has been key, the company says.

Michael Darnell, vice president of sales and marketing at Prism Systems Inc., a Mobile, Ala., systems integrator, says that his company has in recent years stepped up its use of RFID. The company recently completed a project for a cigar manufacturer, for example, in which industrial RFID technology from Siemens Energy & Automation Inc., Alpharetta, Ga., plays a vital role for tracking the location and contents of some 3,600 reusable product tubs that circulate throughout the cigar plant.  

Darnell notes that over the past five to six years, the reliability of industrial RFID systems has improved, and the pricing has come down. “We’ve gained a lot of expertise in using RFID. The products are good, and if RFID is what’s called for, we’re going to use it without hesitation,” he asserts.

For industrial applications, RFID offers various advantages over bar codes. The tags require no line-of-sight for reading and writing, eliminating orientation concerns for product moving down production lines. RFID tags can also store upwards of 30 times more data than bar codes, and unlike bar codes, information can be added to a tag as a product moves through various stages in the production process, making RFID technology a good fit for work-in-process (WIP) tracking.

“With RFID, you can save time and cost because you don’t need line-of-sight, and you can eliminate labor by not having this manual process of somebody pumping a bar code gun. And you certainly have inventory transparency that you didn’t have before,” says Alex Stuebler, business manager, factory automation sensors, at Siemens Energy & Automation.

At ARC Advisory Group Inc., Dedham, Mass., Chantel Polsonetti, vice president of advisory services, reports an upswing in interest among ARC’s industrial clients over the last six to nine months in return-on-investment (ROI)-driven RFID factory applications. ARC sees growing use of RFID by manufacturers for “all types of asset tracking,” including reusable container tracking, fixed or capital asset tracking, and WIP tracking, says Polsonetti. For these kinds of “closed-loop” RFID applications, in which reusable tags are used entirely within a factory or company, many users are finding that ROI falls within their required range ...