For all its powerful potential, retail IT users know all too well the error problems with RFID, especially when the more powerful UHF chips get close to liquids or metal.
But as RFID enters mainstream status in 2006, retail users are going beyond traditional engineering means to address those shortcomings and falling back on the time-honored shared-risk, shared-reward approach with suppliers.
Consider the case of Rachel Bolt, assistant director of information systems for the $700 million Piggly Wiggly grocery chain, with 114 stores in South Carolina and Georgia.
Shes a big fan of RFIDs potential, but she absolutely considers the read rates shes seeing today as "not acceptable," she said.
"With a 97 percent read rate at the case level, Im still going to have to count it. Whats the point?"
Bolt said that she wants 100 percent read accuracy, but when asked what she would realistically accept, she paused and said, "99.99999 percent."
"This means that were not actually doing RFID today. Were simply enabling ourselves to play in that space. There are foundational pieces that a company must have in place. If and when the time is right for us to start receiving the products in our DC [distribution center], well have what we need to implement RFID, but Im not ready to embrace it yet."
To deal with less-than-fully-reliable pallet readings, Bolt is asking that her suppliers provide more accurate advance ship notices. If that happens, she is considering leveraging RFID to allow for the Holy Grail of supply-chain: good faith receivings.
That would involve allowing a consumer goods manufacturer—such as Nabisco—to bring deliveries to the chain and "drop it, leave it and nobody has to check it in."
Such a potential process with the chains more than 900 suppliers "puts the fear of God" into their operations people, Bolt said.
Thats where shared-risk, shared-reward comes into play, in the form of a negotiated error rate. Piggy Wiggly has been in discussions with Nabisco for just such a negotiated rate.
Bolts plan is to conduct periodic audits. If the audit is covering two months of shipments and if, lets say, products come up short by one percent, the supplier would be charged that amount retroactively for the prior two months.
"Wouldnt that put the impetus of accuracy into their court rather than ours," Bolt asked. "True good faith receiving, its incredible what that could do to streamline our process."
But its all based on a foundation of accurate RFID readings, which Bolt cant get.
Part of the debate involves where retailers should use UHF (Ultra-High-Frequency) as opposed to HF (High-Frequency) versions of RFID.
The newer UHF versions have two key differences: read distance and read speed.
UHF can read from a much greater distance, roughly five meters on a typical passive UHF tag, compared with about a meter for the same tags HF cousin, said Raghu Das, a managing director for IDTechEx, a technology consulting house in the UK.
UHF also has the edge when it comes to faster data transfer rates, allowing many more tags to be read simultaneously.
But UHF suffers from two distinct disadvantages, and that is the core of the error issue. Much more so than HF, UHF readers get flummoxed by liquids and metals.
"Water has a tremendous effect on UHF" and that includes "moisture in the human body," Das said. "Thats one of the reasons people are struggling to get it working."
Although the liquid issue can be dealt with, liquids can crop up in sly ways. The liquid inside the bloom of warehouse workers have caused problems and there have been reports of tracked cows confusing the readers, too.
Dog food maker Purina is reported to have experienced UHF RFID problems when tracking bags of dry dog food. Why? The dry food apparently absorbed enough moisture from the air to confuse the readers.