Radio frequency identification (RFID) technology has generated a lot of interest recently, and promises to spark a lot more in 2004.

The technology, which is often described as a 'wireless barcode', has seen proponents promising a revolution in supply chain management, while raising the ire of privacy advocates who are concerned the technology will be used to create databases of information on individuals without their consent.

The controversy increased recently when Katherine Albrecht, founder and director of Consumers Against Supermarket Privacy Invasion and Numbering (CASPIAN), received an e-mail, sent to her by mistake, which indicated Grocery Manufacturers of America (GMA) was planning a personal attack to discredit her and her organisation.

When inquiring as to the reason for a request of her biography from the GMA, Albrecht was surprised to receive a reply apparently intended for someone else which read I don't know what to tell this woman! "Well, actually we're trying to see if you have a juicy past we can use against you." The GMA apologised, claiming the e-mail was written by a college intern and did not reflect the organisation's policy.

Many retail stores have become cautious of public perception in regards to the technology. Scott Whiffin, from Coles Myer corporate affairs, denied that it would make use of any RFID tags that may be included in stock sold in its stores.

"This is totally wrong," said Whiffin. "Coles Myer does not include RFID tags in any of the consumer goods we sell in our stores." Gillette purchased 500 million RFID tags in January 2003 to use in its Mach 3 razor blade packs, which are sold in Australia.

"Where we're at with RFID use is that we will be using them in a limited pilot within our food and liquor supply chain to track pallets and rollcages. That's the extent of it at this stage," said Whiffin. "We are aware of the limited use of this technology by UK and US retailers but we would need to very carefully assess the pros and cons - obviously including the privacy implications - before we even thought about using the technology beyond our supply chain."

Basic RFID technology is already being used in the form of wireless security scanners at stores, and it is only a matter of time before the technology becomes an integral part of our lives.

Radio frequency identification (RFID) technology has generated a lot of interest recently, and promises to generate a lot more in 2004.

Many civil rights advocates are concerned about the privacy implications of RFID technology. They envisage a world where companies track what their customers buy, where they go, what other goods and services they purchase and build up a comprehensive database on all aspects of the individual's life. Although it is not viable for companies to do this at the moment, the general consensus among the concerned parties is that guidelines should be put in place before such moves are undertaken.

Malcolm Crompton, Australia's Privacy Commissioner, said there was a great potential for concern if RFID technology was implemented wrongly. The use of RFID tags along the supply chain to the retail point of sale was not a problem, according to Crompton, but after the retail point of sale, use of the technology raises several issues.

"Barcodes label at the product line level," said Crompton. "RFID tags put an individual number on each product unit." This, coupled with the ability to read the tag in a contactless way, raised issues over the control consumers have. In this case the Privacy Act may come into play.

"The Privacy Act only deals with personal information," said Crompton. "If a name is attached to a tag [or the name can be deduced from the information linked to the tag] then the Privacy Act comes into play."

"Privacy Principle One requires you to tell people you are collecting information, and what you are going to do with it," said Crompton. "Privacy Principle Two [requires you to] deliver on that promise." Privacy Principle Eight requires organisations to allow customer to deal with them anonymously if it is practical.

"Immediately the Privacy Act gives you a framework for deploying RFID technology," said Crompton. "A lot of the reason for the Privacy Act is to leave the person in control."

Crompton said RFID technology was not inherently bad and promised some significant benefits if it is implemented in a considered way. He said there were individuals and companies in the United States considering collecting data after the point of sale, which was a problem.

"There's not a lot of data in an RFID tag, just a unique number," said Crompton. "When you link it up with other data it becomes interesting. There are arguments about whether [tracking people and building a database on them using RFID technology] is even possible. The point is that before some clever person does that let's think it through."

"Clearly it serves no purpose from a retail perspective...for privacy not to be absolutely secure" -- Neil McKay, Sun

The subject was discussed at the recent 25th International Conference of Data Protection and Privacy Commissioners, which was hosted by Australia. The conference passed a Resolution on Radio Frequency Identification, and Crompton is in dialogue with Elliot Maxwell, the director of public policy at the Auto-ID centre, to ensure the resolution was passed on and is being implemented.

Will Duckworth, IBM's wireless expert, recommended that companies implemented RFID technology appropriately by adopting standards and consulting with privacy groups.

"Marks and Spencer in the UK worked with the top five privacy organisations and managed to implement a similar solution as Benetton but without the backlash.

Many people did not think the privacy concerns would be that big an issue, with Scott Dawes, industry director manufacturing, retail and distribution for Oracle Australia & New Zealand, claiming that people today had released en masse their insistence on privacy - although he added this was most likely a temporary situation.

Neil McKay, director Sun's Retail and CPG Industry group for Sun in Asia Pacific told ZDNet Australia   "there has been a lot of people jumping at a lot of shadows".

"Clearly it serves no purpose from a retail perspective, a manufacturing perspective, a government perspective and so on for privacy not to be absolutely secure," said McKay. "I think we'll find the people will find the benefits outweigh the problem with any privacy issues."

"No industry is going to completely reject customers as the technology is rolled out," said McKay. "It will be done in such a way that the customer will always come first."

Bjarne Munch, senior research analyst at Meta Group, pointed out that individuals have already shown they are prepared to forego privacy if they get a benefit, as evidenced by the success of reward schemes and loyalty programs.

"With mobile phones you have tracking down to about one metre anyway," said Munch. "[In terms of possible privacy infringements] the mobile phone industry is probably moving at higher speed than RFID at the moment."

Radio frequency identification (RFID) technology has generated a lot of interest recently, and promises to generate a lot more in 2004.

While almost everyone agrees that RFID tags will eventually be used almost everywhere, industry players and analysts are divided as to when that will occur. People who are predicting a strong and fast take-off claim RFID tags will be ubiquitous within three to five years, with the pace dictated by cost, standardisation and regulatory issues.

The most common factors cited for the speedy uptake of RFID technology are mandated use by large retail chains and military organisations, as well as concerns of product safety and the reaction to the perceived threat of bioterrorism and terrorism in general. In the US, two pieces of legislation are predicted to have an impact: the Hazard Analysis and Critical Control Point act and the Bioterrorism Act, both of which will enhance control and tracking of certain compounds and agents.

"For item level adoption you're looking at 2007," Will Duckworth, wireless expert for IBM told ZDNet Australia  , citing internal research. "Pallet, case level [adoption will be] over the next two years." IBM is basing the prediction on chip costs - currently around 4-5 US cents for the simplest RFID tags. If the big retail stores can force their suppliers to adopt RFID technology they can share the cost of the chip, and this will increase the speed of take-up.

"Walmart mandated by January next year that the top 100 suppliers must be RFID-enabled, and by January 2006 all suppliers must be RFID enabled," said Duckworth, adding that the US Department of Defense has issued a similar mandate, and the Australian Department of Defence has indicated they are looking at RFID tags.

In fact, these mandates were cited by most proponents of RFID technology as the main driver behind an expected surge in use. Neil McKay, director of the retail and CPG industry group for Sun in Asia Pacific told ZDNet Australia   the mandates had "ramped up" the roll out of RFID, and whereas a year ago people were predicting widespread use in 7-10 years, they were now predicting it in 3-6 years.

""There's a bit of science, art and magic to this." -- John Brand, Meta Group

"The reason for it is the major global players are accelerating [the uptake]," said McKay. In addition to Walmart mandating the inclusion of RFID tags, Germany-based retailer Metro Group has said it would roll out an RFID system throughout its German stores' supply chain and will require its 100 largest suppliers to attach RFID tags to pallets and cases of goods by November. FedEx is also keen on the technology.

"With global heavy hitters like this you'll find the technology will advance at great speed," said McKay.

Scott Dawes, industry director Manufacturing, Retail and Distribution for Oracle Australia & New Zealand told ZDNet Australia   that good adoption of RFID technology will be seen around 2005, spreading first across high value items and highly regulated items such as pharmaceuticals and hazardous chemicals.

"The cost of implementing it is still very high," said Dawes. "Probably not until 2008 will you see widespread adoption. It will take a tag cost of about one penny." The estimated tag cost is around five US cents by the end of 2004, which is based on 1 billion chips being sold per year. By 2008 5 billion chips per year are expected to ship, which should reduce costs to one US cent per tag.

"It was really only mid-last year that companies have woken up to the what this thing means. It's barcodes on steroids." -- Scott Dawes, Oracle

However, Tim Moylan, managing director supply chain logistics company Manugistics, Australia and New Zealand, is less optimistic about RFID technology. He said companies need to do business analysis, not just analysis of a particular technology.

"This is why I think it's not getting the traction as fast as all the hype it is generating," said Moylan, adding that there were only a few large organisation doing trials in the US, so it was unreasonable to expect it to take off in Australia quickly. "People are adopting a wait and see approach before they jump." He said large scale implementation was "at least five years away".

Analyst group Meta Group is even more pessimistic about the introduction of RFID technology.

"There's some niche applications but it's certainly not widely adopted," John Brand, vice president technology research services at Meta Group told ZDNet Australia  . "It's fairly expensive in terms of the infrastructure needed to support it. It won't be ubiquitous for some time yet."

Brand disagree with the notion that the 'Walmart Mandate' would drive support to adopt RFID technology, and emphasised it is not happening in this market yet.

"I don't think you will see it in most retail products within 5-10 years," said Brand. "It will get a growing percentage, but that percentage is likely to remain low."

Radio frequency identification (RFID) technology has generated a lot of interest recently, and promises to generate a lot more in 2004.

No matter how spectacular a technology may be, there needs to be a solid business case for companies to adopt it in an effective manner. The general consensus is that high-value items will be tagged initially, with lower-cost items being tagged further down the track. "People have burnt their fingers enough to know they need a good business case," Hans Van Schie, area head for innovation and partnership, Teradata told ZDNet Australia  .

"RFID has two things. One is tracking an item so it doesn't get lost, and one is speeding up the process," said Van Schie. "It's all related to the real-time organisation that companies have to be." If a company has good data interrogation capabilities and good visilibility of the business their approach to implementing RFID technology would be different to companies who don't have a good view of their business.

"FedEx has great tracking, so their business case would be different to others," said Schie. "In Australia very little data is captured, so once they get this ability they'll start to say "right, I need this data". In Australia [RFID] opens an opportunity for people to start capturing that data and integrating that data."

Tim Moylan, managing director Manugistics, Australia and New Zealand, told ZDNet Australia   he didn't think companies fully comprehended the capabilities of RFID, and don't know what the business case for implementing RFID is.

"They need to understand what the impacts of putting an RFID tag on a container are," said Moylan. "It's going to generate a significant amount more information than barcodes...and that's what people are coming to terms with. It's not going to be a static picture of information, you'll know where the container is at various points in time. You'll know what's inside [the container] if there are tags on the goods it contains. You'll know where an item is at a particular point in time."

"You're going to be able to plan a lot more quickly because you'll have a lot more real time information available," said Moylan. "You'll be able to react to events in your supply chain a lot more quickly than you do currently. Your visibility will be a lot higher."

Dawes also pointed out that the back-end systems to support RFID were at least as important as the technology itself.

"People are adopting a wait and see approach before they jump." -- Tim Moylan, Manugistics

"A product's life cycle may take a megabyte of memory to track it through the life cycle," Dawes told ZDNet Australia  . "RFID may take tens of megabytes of memory. So large organisations could use terabytes of data daily. Computer storage is going to be a cost."

Dawes said the problem faced by companies was a lack of standards governing backend systems. "The next move after the standard is developed for the code itself is the standard for the plug and play devices," he said. Dawes warned that companies' infrastructure would be a major determinant of how easy they found it to implement the infrastructure for RFID technology.

"Those companies that put down a standardised platform of business applications with standards across the organisations middleware will have a better shot than companies that have cobbled something together using best of breed and custom integration...They'll have to redo everything," said Dawes. "For the first 3-5 years every company will have to be custom building these things, unless they have a standard middleware that adopts standards coming out of the auto-ID centre."

However, it's not just the supply chain that will see benefits.

"The focus globally has been on the supply chain but we feel the early benefits will be outside the supply chain," said Will Duckworth, wireless expert for IBM. "A lot of companies ship items in containers and the containers are often worth more than the stuff being shipped."

Examples of this include gas and petroleum companies which used canisters and brewers using beer kegs. Duckworth said that there is US$800 million worth of beer kegs - sans beer - in the United Kingdom, so a five percent annual loss rate equated to US$40 million per year.

"Brewers [which implement RFID technology] will get the kegs back more often because they know where they are, this means the kegs will get used more often and less are needed," said Duckworth. "Pubs often swap kegs around so brewers have a problem with keg retrieval."

Other implementations of RFID have nothing to do with products at all. Security companies are putting RFID tags in the property they are meant to be guarding, which the guards have to scan to prove they were present and checking the premises. When the companies used barcodes they found some security guards were photocopying the barcodes and scanning them from home.

A Perth company, RFID Race Timing Systems, has developed a system to time long races such as marathons, triathlons and the like using RFID technology. Competitors wear an RFID tag and at the finish line they cross a pad that contains a reader which automatically registers and records the time.

"It's pretty hard to barcode a cow." -- John Brand, Meta Group

Even animals do not escape RFID tags. Most Australians are familiar with the requirement to microchip their pets - which is RFID technology - but farmers are now getting in on the act.

Symbol Technologies received grants from the Commonwealth Dairy Regional Assistance Programme (Dairy RAP) and the Gardiner Foundation to improve the testing methods for milk samples.

Each cow gets an RFID tag with a lifetime individual ID number, which is then matched to the barcode on a sample flask containing a milk sample from the cow, practically eliminating the possibility of human error. The flask is then sent to be tested, and any problems can be traced back to the exact cow. This allows farmers to get an accurate picture of their herds' productivity and milk quality.

RFID tags are also being used to monitor herds, with the National Livestock Identification Scheme aiming to track animals from the moment they are born to the moment they die to track food safety. It will also make it easier for graziers to count their herds and sort them in various paddocks. Radio frequency identification (RFID) technology has generated a lot of interest recently, and promises to generate a lot more in 2004.

Some people see RFID tags as more than an efficient means of managing a supply chain - they see them as a revolution. Scott McNealy, the chairman of Sun Microsystems, views RFID tags as one of the keys to "connecting everything with a digital, electrical or biological heartbeat, even inert objects - and conceivably every object on the planet - to the network", according to an article in the December 2003 issue of Sun's internal magazine.

"The evolution from a network of hundreds of thousands of computers to millions, billions, even trillions of things will be here much sooner than we expected," McNealy is quoted as saying.

While it may seem far-fetched, this scenario is far from infeasible. After all, if phone numbers are mapped to the domain name system with ENUM, it will not be any harder in a technological sense to map the identifiers in RFID tags to the DNS.

Since both RFID and ENUM have raised the ire of privacy groups, it's hard to imagine a situation where everything has an RFID tag and is monitored around the clock as coming into play any time soon.

"There is a level of stupidity that is reached at some point in time. For every great idea there are a hundred stupid ones." -- John Brand, Meta Group

A key area in which RFID is expected to make ground is in corporations tagging everything in their building for asset management.

"I think it is likely at some point in time," said Meta Group analyst John Brand of Sun's vision to connect every object to a network. "I think there are benefits for some organisations in terms of asset management."

However, he discounts some ideas that have been mooted, for example talk of a chair that communicates with the table to check whether the person is sitting in a good ergonomic position. The information is then relayed to an insurance company which adjusts premiums based on risk.

"There is a level of stupidity that is reached at some point in time," said Brand. "For every great idea there are a hundred stupid ones."

Radio frequency identification (RFID) technology has generated a lot of interest recently, and promises to generate a lot more in 2004.

There are several different levels of RFID tags, ranging from simple read-only devices to more powerful tags that can broadcast their own signal and require their own power source. The read-only chips are receiving all the hype because of the plans to deploy them in a retail environment.

Read-only RFID tags consist of a small computer chip and an antenna. When an RFID reader sends out a radio signal, the chips are powered up and respond with the information they contain. The energy required comes from the signal sent out by the reader.

To get an idea of what RFID tags look like, simply look at a book from a library or bookshop that has anti-theft devices - they are a primitive form of RFID tag. The sticker containing a strip of metal in a square spiral is the tag - the spiral is the antenna. Those chips are one-bit, they register either a '1' or a '0' which indicates to a reader whether the book should be taken out of the store.

Modern RFID tags hold a 128-bits of information, and are several orders of magnitude smaller.

Once the reader has received the 128-bit ID from the tag, it is sent to a PML (Physical Markup Language) server which looks up the appropriate IP address to retrieve the information on the product, according to IBM's wireless expert, Will Duckworth. "It looks like it's going to be Verisign who controls the database," he said.

The industry is hoping to avoid some problems that have plagued barcodes over the last quarter of a century.

"Every country has their own barcode system...you couldn't have one global barcode," Neil McKay, director Sun's Retail and CPG Industry group for Sun in Asia Pacific told ZDNet Australia  . "With RFID a consortium was set up 4-5 years ago...to create one global standard."

There are five widely recognised classes of RFID tag: Class 1 tags are read-only RFID devices that reveal the entire stored content when read. Class 2 tags are read-write RFID devices that allow users to modify the content. Class 3 tags are smart card tags with computing power. The encryption and authentication of these tags is supported by secret-key encryption. Class 4 tags are smart card tags with computing power. The encryption and authentication of these tags is supported by public-key encryption. Class 5 tags are RFID tags and sensor nodes with batteries or miniscule power generators. They function independently without an external power supply, and have a greater range than the other classes. They are not equipped with processors and have no computing power. Source: Ubiquitous ID Center

The consortium, originally called the Auto-ID center, was formed in 1999 to create the standards required to make RFID tags global. The Auto-ID Center was a unique partnership between almost 100 global companies and five of the world's leading research universities; the Massachusetts Institute of Technology the US, the University of Cambridge in the UK, the University of Adelaide in Australia, Keio University in Japan, and the University of St. Gallen in Switzerland.

Last year the Auto-ID center morphed into EPCGlobal, and sets the electronic product code (EPC) for all the tags, and to issue those codes to every organisation globally that uses the technology.

"The outcome of all this is that the tags will become universal," said McKay. "The next step is to get a reader to operate in different countries...but the code number will be the same universally."

Which brings us to another problem. RFID tags are a wireless technology, and the frequencies used to read them vary from region to region, and in some cases from country to country. Although this is not ideal, there is unlikely to be a standard frequency in the foreseeable future because countries have already allocated much of the spectrum for different uses.

"Australia looks like it will be on 915 MHz, the same as the EU," said Duckworth, adding that there is currently no standard across Asia. It is possible to get dual frequency RFID tags and dual frequency readers, which will be required when goods are shipped overseas.

According to John Brand, vice president technology research services at Meta Group, RFID technology is subject to misreading tags up to 20 percent of the time, although the average is more like three to five percent. The failure rate of reading the chips is contingent on a range of environmental factors, since metal and water can interfere with the signal. If a wooden pallet soaks up water it can change the communications between the tags and the reader.

"There are a whole range of environmental factors that will determine the success rate, and that is not always science," said Brand. "There's a bit of science, art and magic to this."

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