Radio-Frequency Identification Continues to Spread

With traceability becoming a more important aspect of the supply chain, steps to make it easier – and more cost-effective – are being welcomed. Growers, processors and retailers are embracing radio-frequency identification (RFID) at all steps in the chain.

“I think we’re in the beginning stage,” said Michael McCartney, principal of QLM Consulting in Sausalito, Calif. “I think Albertson’s and Wal-Mart and the Department of Defense are the key drivers. Those three enterprises are all pushing the RFID envelope.”

QLM Consulting was founded in 1993 and offers supply chain consultation. The company has the only RFID testing center, in Salinas, Calif., for perishable products and was the first company to do a traceability study for USDA.

RFID is a form of messaging between a radio broadcasting transmitter and a receiver, McCartney said. The RFID tags that are placed on cartons and boxes transmit a radio signal between 850 MHz and 960 MHz. Most of the tags in the United States operate around 915 MHz and are tags.

When a reader, through an antenna, sends out a signal, it interrogates or “wakes up” the tag, McCartney said. The reader then can receive the information contained in the tag. This information includes product identification, manufacturer ID, item description and any user-defined information. The product is then assigned a unique serial number that is used only once.

“That’s the secret sauce,” McCartney said.

The information fields include an EPC manager number, a Global Trade Identification Number (GTIN), which is the new “bar code,” and a unique serial number.

Once the reader picks up that information, the data is compiled. The owner of the operation can set the reader to collect other information, such as if it’s one of 50 cases sitting on a certain pallet. The pallets, too, can be identified.

“There is an electronic link or association between the case and the pallet,” McCartney said.

It is here where people will start seeing an immediate return on investment, he said.

“What happens right now in every food processing plant is everyone gets purchase orders,” he said. “They all get ready to deliver and have 22 to 24 pallets sitting there. Someone walks around with a master checklist and says, ‘Let’s make sure everything here is supposed to be on that truck.’ At the end of the walk-through, they say, ‘yes, we’ve got everything.’

“Now, imagine 50 dock doors with 50 trucks and 10 people doing that.”

RFID can substantially cut the costs for a processor by eliminating a number of those positions and manual work because all the checking can be done automatically without errors.

“The reader has the shipping manifest, so it can compare what’s being read via RFID and confirm that the right pallet with the right stuff is going on to the right truck,” McCartney said. “That’s 50 doors, 10 people making $10 per hour for 10 hours each day.”

This alone would save up to $50,000 a day, he said.

Setting Up RFID

But before this can work, the business owner has to make a few decisions and take a few steps.

The first step is to set up a produce catalog, which, McCartney said, involves giving each product separate and distinct numbers. This number creates the GTIN.

The second step is to register with EPC Global. EPC Global will then give the producer an EPC Manager Number, which is the corporate ID number.

“That number, combined with the GTIN, gives you the data fields you need at the most basic level to start an RFID project,” McCartney said.

Once the product catalog is created, the processor must send it to the trading partners/retailers so they have all the up-to-date product codes. Then the retailers can synchronize the data in their systems with the data in the processor’s system.

After this step, McCartney said, the processor needs to figure out what to do with all the data collected.

“Assume you’ll find the right tags and assume you find the right reader,” he said. “What are you going to do with the data that gets collected? How are you going to manage that?”

The current systems people use with the bar codes can work with RFID systems if the right software is selected.

There are options for this “middleware,” depending on what type of system is used in the processing facility. For proprietary systems and many legacy systems there are a wide range of middleware solutions available.

Once all of the technology is set up, processors have to decide where they want to collect the data.

“Where’s the most important place to collect that data?” McCartney asked. “Is it when trucks come in and are weighed on the scale? In the field? Maybe we have a reader at every gateway on the farm. Maybe we wait until it’s pre-graded.”

Or, perhaps RFID is used in combination with the current bar code system.

“At the very least, you’d want to put a reader at the shipping point,” McCartney said.

But, before installing a reader, someone must do a site assessment. Other wireless technology, such as radios, cell phones and wireless Internet, can interfere with the signals of the RFID tags. The site assessment will determine where there is a quiet zone, McCartney said.

Finally, after completing all of these steps, it’s time to purchase the reader, the tags and the printer and get ready to go.

Most in the fresh produce business use the passive RFID tags, but there are two other options: active and hybrid. The active tags, used most frequently by the Department of Defense, contain a battery and can be read five or more miles away. The hybrid tags combine a small battery in the passive tag and can be read 100 feet away. The passive tag can be read from 10 to 12 feet away.

Special printers write the tags and also read the tags to ensure they were written correctly. The cases are then labeled.

After the initial setup – which can run upwards of $20,000, including the reader, middleware, printer and site assessment – the major costs are RFID tags and system maintenance. Middleware is vital for success, and the cost of which is largely dependent on the existing enterprise systems. RFID tags today generally cost about 25 cents each – depending on the type of tag and the quantity bought. McCartney said tags are cheaper when bought in larger quantities.

Positioning for the Future

Though using RFID is not a government requirement – yet – traceability is.

“The FDA issued a 344-page report that requires produce companies to demonstrate the knowledge, the origin, of every ingredient for every product,” McCartney said. “They didn’t say how to do that, but they said, ‘If we want to know, you’ve got 24 hours to tell us.’ RFID would be an excellent way to do this.”

McCartney said for RFID to continue its growth, all trading partners have to be in the game. It doesn’t work as well as it could if the processor is RFID-capable but the retailer and trucking company are not.

“To play the game, you have to be part of the game,” he said. “Like what happened in bar codes, there will be some that will adopt the technology and others that will not. Those that do not run the risk of losing business or being absorbed by those that do.”

McCartney is the chairman of the Produce Marketing Association’s RFID Business Requirement Committee.

For more information on RFID and QLM Consulting, visit www.qlmconsulting.com.