Myth 4

By Larry Dignan  |  Posted 2004-02-09 Print this article Print

: Read Rate 100 Percent"> MYTH 4: The Read Rate is 100 percent
Bar codes are read with 99 percent accuracy. But with radio tags, Wal-Mart is expecting 100 percent reliability. Without 100 percent reliability, the promised benefits—automated routing through docks and warehouses, real-time inventory snapshots and "no-checkout" lines, to name a few—wont be realized for a long time. "The big question you have to ask yourself is whether the technology will work in my environment," says Duncan McCollum, manager of the global RFID group for consultancy BearingPoint.
McCollum says pilots reveal even the smallest things will deter reliability. Although its common knowledge that cold storage, liquid and metal can affect the reading of tags, McCollum says he was surprised to find microwaveable containers, which are designed to absorb radio waves, hurt reliability.
Mike Wills, general manager for RFID technology at Intermec, says that to gauge reliability levels, companies need to consider everything from the glue that attaches the tag and the type of box to humidity levels and electrical interference. TIs Allen says what may emerge is a mix of low-frequency, high-frequency and the ultra-high-frequency (UHF) tags advocated by Wal-Mart. Low-frequency tags (125-135 kilohertz) operate through liquid without any problem, but are disrupted by metal. High-frequency tags (13.56 megahertz) can handle metal, but only have a range of a few feet. UHF tags (900 megahertz) can be read as far as 20 feet away, but there are impediments. MYTH 5: Individual Products Will be Tagged in this Decade
At a Düsseldorf, Germany, "future store," created by German retailer Metro Group AG, nearly every individual item is tagged. This enables customers to find product information on kiosks, lets stores automatically replenish inventory, and, someday, will eliminate checkout lines. But widespread adoption of "no checkout"—a concept where a consumer could just walk out of a store passing under a radio-wave reader—is at least 10 to 15 years away, says Wal-Marts Langford. In the meantime, tracking every can, box or bottle has its issues. First, the cost of each tag needs to drop, to a nickel or less. And then theres the practical impact: How would The Coca-Cola Co., for example, actually manage all the data derived from tagging millions of individual cans of Coke? And what would the company actually do with that information? Privacy issues are also a concern. Although most analysts say it isnt technically feasible to track a person by the RFID tag on her tube of toothpaste, a lot of education needs to happen before consumers go along with tagging individual items. Initially, analysts say, brochures outlining RFID, clear labeling and opt-out options will set the stage. Pilot attempts to use RFID tags to prevent the theft of Gillette razors at retailers such as Tesco and Wal-Mart have been blasted by privacy advocates. Other pilots by clothing manufacturer Benetton have also drawn fire. Until consumers get used to the idea of radio-wave tracking, pilots will be confined mostly to warehouses. For Procter & Gambles Turk, the payback still is far off. "The issue is how to make a positive business case for tagging at the item level," says Turk. "The cost of [each] tag would have to be a penny or lower."

Business Editor
Larry formerly served as the East Coast news editor and Finance Editor at CNET Prior to that, he was editor of Ziff Davis Inter@ctive Investor, which was, according to Barron's, a Top-10 financial site in the late 1990s. Larry has covered the technology and financial services industry since 1995, publishing articles in, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism.

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