While radio frequency identification (RFID) has never quite lived up to the hype surrounding Wal-Mart Stores Inc.'s 2006 edict for mass RFID adoption, falling prices and new technologies are spawning a host of applications that bring additional visibility and efficiencies to the supply chain.
The RFID world is dominated by two principal technologies: passive RFID and active RFID tags. While the tags are lumped together in the same category, experts say the two flavors of RFID are actually quite different. Each has very specific characteristics that lend themselves to disparate applications.
"There's a reason why we have various wrenches, hammers and screwdrivers in a toolbox -- they all perform different jobs depending upon the environment and what you are trying to accomplish," said Don Ertel, senior vice president of operations at CDO Technologies Inc., a systems integrator specializing in auto identification technology.
Differentiating between RFID tags
Passive RFID tags, by far the simpler of the two, typically lack an onboard battery; thus, the power source for the tags is the RF energy transferred or reflected from the reader to the tag. Given that there are fewer components, passive RFID tags are significantly less expensive than their active counterparts. However, they are much more limited in terms of signal range, their ability to store information and to incorporate other related functions like GPS and sensors, according to Ertel.
In comparison, active RFID is a far more complex tag, typically encompassing an on-board power source like a battery as well as an antenna or radio for transmitting its own signal back to the reader. As a result, an active RFID tag is continuously powered, whether or not it's in the field range of the reader. It is also capable of transmitting more information, including real-time location information, over greater distances while also allowing for the integration of those advanced GPS and sensor functions, Ertel said.
Passive RFID remains the dominant player given its widespread availability and significantly lower cost, according to a report from RFID research specialists IDTechEx Ltd. The firm estimated the value of the entire RFID market -- including tags, readers, software and services for both active and passive formats -- to be $7.67 billion in 2012, up from $6.51 billion in 2011. The same report found that, in total, 3.98 billion RFID tags will be sold in 2012 versus 2.93 billion in 2011, with most of the growth coming from passive UHF RFID labels.
Passive and active RFID at work
While passive RFID has yet to consistently reach the vaulted five-cents-per-tag benchmark championed by its early proponents, costs typically are in the tens of cents per unit, while active tags start at around $10 per tag and can go as high as $100 depending upon configuration, Ertel said. Most passive RFID tags are paper-based, thus only used once, while active tags are traditionally encased in some type of hardened plastic to protect the on-board components that lend themselves to greater reuse, he added.
The reuse factor and the price point are among the factors companies should consider when choosing between the two types of RFID for supply chain applications, experts say, while also keeping in mind range requirements and the level of information needing to be stored.
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For Lou Chauvin, an independent consultant specializing in RFID, the demarcation points are simple. "It boils down to how many assets I need to track and manage and to what degree I need to know about them," he explained. For example, passive RFID is used extensively in the retail supply chain, helping retailers keep tabs on whether they have the types of products consumers are looking for. Take the example of blue jeans. "A passive tag can give a retailer enough information to know the type of blue jean, size and color in stock to aid in inventory management," he said.
Active RFID tags, on the other hand, are far too expensive for simple inventory applications. They are better suited for tracking higher value assets like industrial machinery or cargo, Ertel said. Active tags' longer range, greater storage capacity and combination of real-time location capabilities and on-board sensors allow manufacturers to track the location of containers in transit or in a shipyard, as well as to monitor container doors and keep tabs on environmental conditions like temperature. This additional level of information gives manufacturers the insight to make critical adjustments -- for example, rerouting a shipment due to spoilage or ensuring a production line is not held up because a critical piece of equipment went missing, he said.
"It's insufficient to know that a jet engine or critical replacement part in the Army depot is on the ground when some of these locations are several square miles in size," said Mike Terzich, senior vice president of sales and marketing for Zebra Technologies Corp., a supplier of bar code and RFID solutions. "Active RFID comes into play in marking highly valuable asset equipment generally used in mission-critical, time-sensitive scenarios like manufacturing supply chain applications or in high-end distribution centers and service depots."
While passive and active RFID have clearly differentiated use cases, there aren't a lot of blended implementations, because the infrastructure required to support the two are completely different. "The infrastructure cost is a part of if," said Ertel. "You need one set of readers and infrastructure to read passive tags and another for active tags, and then there's the complexity of having both technologies in the same area."
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