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RFID a Hot Topic at Pack Expo Las Vegas

With a January 2005 deadline for applying Radio Frequency Identification tags to cartons and pallets, top suppliers to Wal-Mart were looking for answers at the Las Vegas show.

Radio Frequency Identification (RFID), a wireless technology for uniquely identifying and tracking items, has long been used for limited applications in manufacturing. But the technology has never achieved the high volume application levels enjoyed by other identification technologies such as bar coding.

Now, however, some RFID proponents contend the technology is primed for rapid growth, thanks to new RFID supply chain initiatives from major players such as Wal-Mart Stores Inc. and the U.S. Department of Defense.

Recent evidence of this came at Pack Expo Las Vegas. A record 18,369 attendees hit the show floor at the Oct. 13-15 event, up by 17 percent over the previous Las Vegas show held in 2001, says the Packaging Machinery Manufacturers Institute, the producer of the show. And RFID was a topic high on the minds of many Pack Expo Las Vegas attendees.

Wal-Mart on the brain

One indication was the standing-room-only crowd for the show’s opening keynote address by Simon Langford, manager, global RFID strategy, for Wal-Mart. Additional evidence came from the show floor. “The interest level in RFID at this show has been non-stop,” said David Benjamin, business development manager for Markem Corp., a Keene, N.H., maker of packaging marking systems. “We put up a big RFID sign in our booth because we knew people had Wal-Mart on the brain.”

Indeed, it was Wal-Mart, the Bentonville, Ark.-based retail giant, that stirred up new, widespread interest in the technology last June, when it announced a January 2005 deadline for its top 100 suppliers to apply RFID tags to pallets and cases. And in early October, the Defense Department followed suit with a similar January 2005 deadline for RFID tags on shipments to the military.

Wal-Mart sees the technology as a way to boost supply chain efficiencies. But the retailer’s initiative raises a number of uncertainties for suppliers, who face the task of developing automated RFID systems for their packaging lines.

In his keynote, Langford acknowledged a number of RFID implementation hurdles. Early Wal-Mart field tests showed that RFID reader rates were less than optimal for production, “though we are now reading at production rates,” Langford said. Other field test issues included RF interference with wireless local area networks, antennae distortion around loading dock doors and the fact that forklift trucks sometimes knocked readers off their mounts, he added.

Additional barriers include a “chicken and egg problem” relating to RFID pricing, Langford said. The RFID tags to be used on pallets and cases are still too expensive, Langford said, but they won’t become cheaper until unit volumes increase. RFID tags are currently priced at 25 to 65 cent each, he said. That price needs to reach 10 to 15 cents for the technology to become viable for widespread use, Langford noted. But that level won’t be achieved until order volumes move into the billions of units for tag chip makers, he added.

Despite the uncertainties, Wal-Mart is moving ahead with its RFID schedule. The retailer will provide more detail on its plans during a briefing for suppliers in November, said Langford, who noted that the session will be attended by more than just the company’s top 100 suppliers. “A lot of the smaller suppliers have seen the benefits of this, and are saying, ‘Hey, can we go along by January 2005?’” said Langford.

Wal-Mart plans to start testing RFID technology with “a handful of suppliers” during next year’s first quarter, and will bring additional suppliers on board throughout 2004, Langford noted. Following the January 2005 target for going live with its top 100 suppliers, Wal-Mart plans to roll out RFID for use by all suppliers by 2006, he said. For the program, the retailer is embracing use of the Electronic Product Code (EPC), an RFID standard proposed by the Auto-ID Center, Cambridge, Mass., a partnership of major universities and large companies, including Wal-Mart.

Production solutions

A number of vendors are promoting or developing systems to ease the RFID implementation path for Wal-Mart suppliers and other manufacturers looking to use RFID technology.

“RFID tags are typically put on manually today, so one of the concerns is how you do this at production line speeds,” said Markem’s Benjamin. “We have customers who are running at 60 to 80 cartons per minute.”

Markem has been testing technology for effectively applying labels with embedded RFID tags, which can then be programmed and printed with bar codes or human-readable characters. “We’re using a blower to apply the tags in order to minimize damage to the (RFID) chips, because there’s going to be a yield issue with these chips, and we don’t want to add to that,” said Benjamin.

After the labels are blown on the carton, they are pressed down with a roller, then passed by an RFID programming system, which requires 300 milliseconds to write an EPC to the tag, said Benjamin. Factors such as noise from nearby motors can interfere with the programming of the tag, as can incorrect positioning of the label as it passes by the programmer, Benjamin noted. “If you start the programming too early, you can actually lock up the chip. So we use an edge sensor to determine carton location.” Once the programming step is complete, “we then verify that the tag is good before we print on the label,” said Benjamin.

Other vendors promoting RFID solutions include Zebra Technologies, a Vernon Hills, Ill.-based provider of on-demand printing solutions. “The easiest way to get this done is to use a bar code label printer that has RFID programming capability built in,” said Matt Ream, Zebra senior manager for RFID systems. Zebra brought out its first RFID product more than three years ago, said Ream, and the company has recently announced several new EPC-compliant products.

Like Markem’s Benjamin, Ream reported a growing level of interest in RFID spurred by the Wal-Mart initiative. “There have been a lot of people taking a look at this technology lately,” he said. “But with somebody like a Wal-Mart laying down a mandate, it’s now gotten to the point where they’re implementing, instead of just looking.”

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