Good things come in small packages. This familiar cliché usually refers to precious stones, but today it's taken on new meaning, in that small things are now protecting items we deem valuable.Analysts estimate that
retail industry loses US $50B a year to theft and up to ten times that much to counterfeiting. High-end products such as cosmetics, fragrances and pharmaceuticals are most likely to be stolen or counterfeited. Many retailers and manufacturers believe that this big problem may have a tiny solution – RFID smart tags.
RFID (Radio Frequency Identification) is an automatic data capture technology that offers unparalleled accuracy in inventory control and supply chain management. Although RFID is a relative newcomer to
media spotlight,
technology has been quietly working its way into our culture and into our lives since it was drafted by
military 60 years ago.
The US Department of Defense first used RFID to track military aircraft during World War II. Since then, this compelling technology has been used extensively in highway toll collection, building security, library circulation, parcel delivery and airport luggage transportation.
What exactly is RFID and how does it affect
future of packaging?
RFID functions as a network of microchip “smart tags” and receivers. Each smart tag is embedded with a unique electronic product code (EPC) and a micro-antenna. Once assigned,
EPC becomes a DNA-like marker for
item, identifying it from every other item in
world. When a tagged item passes within range of a reader,
reader retrieves
EPC via radio waves, identifies
item and its exact location, and relays this real-time information to a central computer. Taken together,
series of transactions comprise a comprehensive record of
tagged item’s movement from point of origin to point of sale.
The greatest promise of RFID lies in its application versatility. Smart tags can be affixed to either individual products or to pallets containing multiple units, and can be “read” through most materials. RFID readers can scan multiple items at one time, making them functionally superior to traditional, uni-task bar code scanners.
Scientists at
Massachusetts Institute of Technology (MIT) Auto-ID Center began to explore commercial applications of RFID in 1999. Wal-Mart, The Gillette Company and Proctor & Gamble were among
first to conduct pallet-level pilot tests. They quickly found that RFID offers improved supply chain visibility and more accurate inventory forecasting. Because RFID does not require line-of-sight operations (contrary to manual bar code scanning)
end users achieved improved inventory control with reduced labor costs.