Although not new in development terms, RFID tags have recently been compared to mobile phones in terms of far-reaching application with worldwide revenues set to increase nearly 10-fold from $300m two years ago to around $2,8 bn in 2009, according to In-Stat. Last year, estimates put the number of RFID tags produced at 1,3 billion and the increase in take-up, particularly in supply chain management, should see that number rise to 33 billion by the end of the decade. Only recently, the largest US retailer, Wal-Mart, announced to its suppliers that they must adopt RFID technology and many other retailers and OEMs are expected to follow suit.

As a result it is becoming clear that anyone whose business is part of a supply chain, no matter what the industry, cannot afford to ignore RFID technology. At electronica 2006 (14 to 17 November at the New Munich Trade Fair Centre), visitors to the Fair and delegates to the Wireless Congress will be able to learn and see at first hand the very latest developments in the rapidly expanding RFID technology sector.

What is RFID?

Radio frequency identification, or RFID, encompasses technologies that use radio to identify and monitor objects or people. The most common method is to store data that identifies a person or object on a chip which is attached to an antenna (an RFID tag). The tag transmits the information to a reader which converts the information into a computer usable form.

Radio frequency identification emerged as long ago as the 1970s but, until recently, its adoption had proved too expensive and too limited to be practical for commercial applications. However, for some applications, such as tracking parts for 'just-in-time' manufacturing, companies were able to justify the cost of tags (over a dollar per tag until recently) by the savings an RFID system could produce.

The five cent tag

If a company tracks assets within its own four walls, it can cost-effectively re-use the tags. But for a system to work in an open supply chain, it must be very low-cost because the tags are generally discarded. Back in 1999, the Massachusetts Institute of Technology with money from companies such as Gillette and Procter & Gamble, changed the cost per tag equation by working with industry to develop an RFID tag that would be very low cost when manufactured in high volumes. Five cents (US) per tag was the target.

With low-cost tags and with the use of the Internet, companies would be able to tag everything they own or produce and then by connecting them to the Internet through a secure network monitor their whereabouts. Many large retail companies are attracted to RFID because it has the potential to offer the ability to know the exact location of any product, anywhere in the supply chain at any time. The benefits are potentially enormous.

The five cent tag is said to be still some time away. Today, tags cost from 20 to 40 US cents, depending on their features and packaging. But there is no doubt that, with the number of tags produced and in use rising rapidly, RFID will be big business for the manufacturers and an essential tool for its users.

Dataweek and Trade Fair Travel have put together a very economical travel package for South African visitors to attend electronica 2006, in Munich, Germany, from 14-17 November 2006. Contact Peter Stephenson, Trade Fair Travel, +27 (0)31 916 1414, tradefairtravel@hit.co.za