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RFID 2.0: Taking Item-Level RFID Technology to the Next Stage
By Anthony Dublino, TAGSYS RFID

There is a familiar cycle to the evolution of ANY technology - from initial experimentation and prototyping, to early adopters, to mainstream use, to maturity and stabilization, and then through various waves of improvement or ultimately, obsolescence.

The RFID technology space is no different, although even those of us close to the industry are somewhat awestruck by the amount of attention and hype it has received over the years. It seemed as if RFID has been touted as the savior for so many things and at a certain point had reached such an incredible status that there was no questioning that this was going to be one of the most successful technologies of all time for item-level identification and tracking.

The luxury and fashion industries were not immune to this hype and companies in this space have long been seduced by the potential benefits of RFID technology. For more than 10 years, suppliers, brands and retailers have pursued RFID's promises in terms of streamlined item management, enhanced worker productivity and lower operating costs. In fact, there are at least 264 identified RFID projects in the retail industry alone. Most of them have remained in pilot phase.

History might remember this era as RFID 1.0. Much like many other evolving technologies, there was a great deal of hype and promises and quite a bit of experimentation and projects based on RFID.

But we are just beginning to realize its true potential as these pitfalls are solved. Players throughout the supply chain still struggle with the complexity and hidden costs of RFID deployment. As with most major technology adoption cycles, the economics of such a major shift are a key factor in its successful deployment. Early adopters struggled with justifying the ROI of RFID, but the inherent value of RFID has become clearer as the technology and systems have improved.

On top of that is the practical reality of implementing a true RFID system in a retail environment. While in a perfect world the "end-to-end RFID" enterprise value is undeniable, the situation in a fragmented supply chain (manufacturers selling to 3PLs, into retail, through reverse logistics, and private stores and discount stores, etc.) is considerably more complex. Even in a perfect scenario where the product is RFID friendly and the retailer is certain to receive the sales bump of eliminating (or reducing considerably) out-of-stocks, increased labor, and data accuracy precision, these are separate from the upstream supply chain values.

Now is the time for RFID 2.0
Today, the industry requires the next stage of RFID's evolution - integrating RFID in a more seamless, cost-effective and practical way to deal with escalating inventory management complexity, such as online sales, global supply chains, and alignment with ever-changing consumer buying trends and influences.

Let's look at this more specifically from an RFID point of view. Generally, a new business model or paradigm shift can be characterized by certain elements, such as:

  1. A mature technology providing new capabilities ready to use (in RFID's case: standardized RFID technology allowing interoperability)
  2. An industry initiative driven by financial needs (i.e., U.S. retailers' RFID compliance programs)
  3. An organized value chain within a professional ecosystem (chips, inlay, system, information platform)
  4. Traditional businesses have begun to be impacted and will lead to the emergence of a new business model to exploit the new technology capabilities (e.g., traditional retail channels under attack from online)

This era is characterized by much more mature, stable and ROI-driven technology. RFID 2.0 is delivered as an integrated system and not just discrete technology components. The system allows for cost-effective growth and scalability to adapt to evolving needs and technology change. It enables efficient interoperability of components from multiple vendors; all this in true technology-agnostic "plug-and-play" style.

An RFID 2.0 checklist
So what are the specific issues that need to be addressed if RFID 2.0 is to be successful?

  1. Dealing of the diversity of the physics of the different objects
  2. Convergence of different ID technologies
  3. Real-time and actionable business processes allowing a new class of services at the EPC level
  4. Open partitioning systems enabling communication with standards ERP, POS, MES, WMS
  5. The virtualization of the RFID framework to allow interoperability between vendors but also between other players within the supply chain
  6. Support the scale of a whole deployment over the cloud and the emergence of the next generation of technolog

Leading suppliers such as TAGSYS have designed RFID 2.0 systems to address these requirements and make RFID more practical for companies to adopt. For example, TAGSYS' system provides a holistic and systematic approach to RFID deployment that works within a company's existing inventory and business process systems, including:

  • Tracking items from WIP to point of sales
  • Managing inventory at item-level in the most accurate way either in central logistics, in affiliates, or in stores
  • Tracking daily sales per location
  • Managing warranty activation and connecting your brand to your consumers
  • Managing and tracking spare parts distribution at an efficiency level never seen before

RFID 2.0 also addresses the growing need to meet RFID compliance mandates by major U.S. retailers. What most people see as a low-ROI capital expense is being transformed into a profit-enhancing approach to manage inventory at item level.

RFID is not broken; in fact, it is entering a new phase of its evolution that will see the efficiency, cost savings, sales enhancement and profitability benefits kick into high gear. Long Live RFID 2.0!

Anthony Dublino, U.S. Sales Director, Retail and Apparel, TAGSYS RFID
Anthony Dublino is the U.S. Sales Director, Retail and Apparel, for TAGSYS RFID. He is responsible for forming and building client relationships within the apparel and retail markets and working with clients to craft RFID solutions that provide maximum ROI, efficiency and customer value. Anthony has over twenty years of sales and operational experience in technology and RFID. At Hi-G-Tek, he increased solution sales from less than $1 million to $6 million within 4 years. He has also built a number of technology companies that have been bought by public companies including, a cutting edge internet marketing company; PowerNet International, an outsourced programming firm; and Cosite, an innovative logistics software consulting company.