Pros and Cons of RFID on Packaging

Jan. 4, 2005
Here are the critical considerations before implementing this technology ... and some available outside help.

Implementation of radio frequency identification technology isn’t as simple as just slapping an RFID tag on a shipping case or pallet. Several variables come into play. First you should make a list.

For example, how much data do you want to include in the tag? Do you want active (battery-operated) or passive (unpowered) tags? Do you want basic electronic product codes (EPCs) that facilitate inventory tracking? Or do you also want higher-cost, sensor-embedded technology that monitors temperature and humidity and signals tampering when a case or pallet is breached by an unauthorized person?

What is the density of your product? How much metal or water is contained in the product or package? These factors can affect tag readability. Finally, how much are you willing/able to pay for this technology, and how much time and staff are you prepared to dedicate to its implementation?

Counting the cost

“RFID will fundamentally change supply chain management and the way industry tracks, traces and manages the products that are delivered to retailers and consumers,” says Sujeet Chand, chief technology officer of Rockwell Automation (www.rockwellautomation.com/rfid), Milwaukee. But it won’t come easily or cheaply … at least not yet.

According to some estimates, it can cost conservatively in the $75,000 range to set up an RFID tagging system for one low-capacity casing line that meets minimal RFID mandates. Then you have to add in the cost of the tags themselves — approximately 40-50 cents per passive tag, depending on volume purchased and the amount of information embedded in the tags. For active tags integrated with truck-transport GPS, the cost might run around $10 per tag.

Obviously, RFID can be an expensive proposition. But on the upside, you can give your products an added market-access advantage, decrease the opportunity for theft, enhance product inventory tracking, and quickly retrieve problem products or block their distribution, avoiding recalls.

“The general cost of the technology will not be any different for the food industry, but the issues of unfriendly items [containing metal or water] could prove more costly,” says Steve Dean, director of business development at Franwell Inc. (www.franwell.com), a Plant City, Fla., engineering firm specializing in software for manufacturing, shipping, distribution and logistics. The company has formed an R&D alliance with the Center for Food Distribution & Retailing to study RFID. “Part of our work with CFDR is to help solve this cost issue for current and future food industry users.”

The University of Florida (Gainesville) is home to the Center for Food Distribution and Retailing, an academic-industry collaboration that has 25 faculty members working on all aspects of food distribution from fields to store shelves. RFID is the hot research topic now, with the center focusing on requirements for the use and reading of RFID tags in the food supply chain.

The primary R&D objective is to explore and evaluate the software and hardware designs needed by the food industry to achieve optimum implementation and effectiveness of RFID systems.

Especially for perishable food products, “RFID tags can enhance temperature management and quality control, optimizing food distribution and food safety conditions and averting potential product losses and the associated costs,” says Jean Pierre Emond, co-director of the center and associate professor of packaging science at the university. “In the near future, equipment interacting with these tagged products will become even smarter, responding to highly specific product safety needs. The CFDR already is working with equipment manufacturers to accomplish that goal.”

CFDR has an advisory board with presidents or vice presidents of retail, foodservice and restaurant chains from around the world. These members have helped the center conduct RFID tests on their operations.

Also, the center has projects under way with fresh produce packagers Tanimura & Antle and Fresh Express, both based in Salinas, Calif., and Beaver Street Fisheries, a frozen seafood company headquartered in Jacksonville, Fla.

Franwell has helped the CFDR establish a state-of-the-art RFID laboratory — one of the largest in the country focusing on RFID issues related to food distribution. Franwell is particularly involved with integrating RFID into packaging and is using research at the center to address “issues related to products that are not RFID-friendly, especially products containing water and metal. Water and metal play a major role in all fresh food and beverage products. But it becomes a challenge to read an entire pallet of [such] products without scanning each case one by one.”

Says Emond, “We can work around the problem of product density and composition by changing the package shape, changing the air space in the package, or changing the tag position and orientation. Product temperature also is an important factor. The colder the product, the easier tag reading becomes. Frozen products absorb less radio waves.

“But other factors affect the readability,” Emond continues, “such as forklift handling, vibrations and impacts during transport and retailers’ warehouse practices. So, achieving consistent, reliable tag readability is really a product-by-product puzzle, requiring custom solutions.”

Emond emphasizes, “We have to give credit to Tanimura & Antle, Fresh Express, and Beaver Street Fisheries for their RFID initiatives. All three of these companies have given significant amounts of their time to developing the knowledge required to achieve successful RFID. And the two-way partnerships we have with these companies provide us with valuable input.”

Rockwell has established its own RFID test lab at its headquarters in Milwaukee. It creates a simulated factory environment to allow accurate testing and evaluation of a wide variety of RFID products. Products from Alien Technology, ConnecTerra, FKI Logistex, SAMSys Technologies and Zebra Technologies already are installed there.

Many food companies are hoping to realize a good return on investment by taking a cautious, minimalist approach to RFID implementation. The prevailing mood seems to be: “First, let’s make sure it works.”

Adhering to standards

RFID technology is in the process of emerging and evolving, and so are the standards surrounding its use. Consequently, many food companies feel as if they are trying to hit a moving target.

Wal-Mart is spearheading this technology. The large supermarket chain Albertson’s also recently came on board the RFID technology train. Mass adoption across the retailer universe is inevitable at some point. As a result, food companies realize they can’t afford to fall behind the curve.

“Your company wants to maintain mega-retailer business by participating in their RFID program – coding pallets and cases for data collection and tracking,” says a spokesman for Omron Electronics LLC (www.omron.com/oei), Schaumburg, Ill. “But other compelling business growth issues make RFID much more useful than just meeting mandates from large retailers.” He listed these collateral benefits as improving your agility to manufacture a wider variety of products; delivering seasonal and regional product cost-effectively and on-time; and reducing waste from misdirected shipments.

Food manufacturers fully understand the product traceability and inventory control benefits that RFID can offer. But compliance has significant cost implications for the food industry. So, food processors/packagers are taking a cautious approach, especially in the face of continually changing and developing standards.

Dean explains that EPCglobal (www.epcglobalinc.org), a joint venture between EAN International and the Uniform Code Council Inc., is charged with setting the standards for tags, which will control what and how much data is in each tag. “The U.S. Dept. of Defense (DoD) has been very aggressive in its use of RFID and recently finalized its policy, as have some major retailers like Wal-Mart,” he says. “We believe the Dept. of Agriculture could and maybe should be involved from a traceability and food safety perspective while these standards are in the development cycle.”

As mentioned before, Tanimura & Antle has been working with CFDR on testing of tags and readers. According to Tom Casas, vice president of information technology, T&A is prepared to go active with RFID this month (thereby meeting Wal-Mart’s supplier implementation deadline), for wrapped head lettuce packed in returnable plastic containers. The wrapped lettuce heads are packed 24 per container, 40 containers per pallet.

“We are starting off small. We will add cauliflower, broccoli and celery after the lettuce launch,” Casas says. “RFID is costly, but it gives us more sophisticated traceability. We manually apply the tags in the field at the case level. So, when cases get shifted from one pallet to another, we can still track them very closely.”

Based on tests done at CFDR, T&A chose two reading systems — from Matrics (www.matrics.com), Rockville, Md., and from Alien Technology (www.alientechnology.com), Morgan Hill, Calif. Both systems incorporate chips and antennae and execute good reads on tagged products with water content.

“RFID is costing us about 50 cents per case tag. That quickly adds up for high volumes of relatively low-cost items like heads of lettuce,” Casas comments. “But we believe the benefits in terms of food safety and traceability and market access will offset that cost in the long run. To some degree, implementing RFID is a leap of faith. We have to trust our marketing instincts and our technology partners.”

Franwell’s Dean adds, “We as an industry must use partnering and collaboration as the means to solve the many issues facing the wide-spread adoption of RFID. It’s a big job requiring cooperative efforts to get it done right.”

Active vs passive RFID tags

One of the first decisions for any food processor is deciding between passive or active RFID tagging. The choice is affected by both functional requirements of particular food products (for example, close real-time temperature monitoring) and budgetary realties confronting the food companies.

Current passive tag technology has some limitations in terms of readability and durability. But active tags are more expensive.

So why not a little of both? One company championing hybrid implementation of passive tags, active tags and other forms of auto-ID is RF Code Inc. (www.rfcode.com), Mesa, Ariz. The company is the developer and supplier of Tavis data management software platforms and Mantis active RFID tags and readers.

“Cumulatively measured, passive RFID is quite limited in its physical durability,” says president Armando Viteri. “To get effective range, these tags are quite large, thus making them a very big target for the tines of a fork lift. Passive labels are better suited for case-level applications.”

RF Code has been pioneering the integration of tracking technologies to optimize their combined performance in the supply chain. One successful project involved placing active RFID tags on intermediate bulk containers (IBCs) filled with products such as industrial food ingredients, and then reinforcing that tracking method with global positioning systems (GPS) on transport trucks. UK-based IBC rental company pH Europe began using this system to transport and track an array of products in the summer of 2004, and has been honored with several European supply chain and information management awards for the innovation.

“There are four key elements of RFID: the tags themselves, tag readers, data monitoring/collection systems, and business applications software,” says Royanna Chappell, vice president of emerging applications at RedPrairie Corp. (www.redprairie.com), a Waukesha, Wis., RFID system architect. “To successfully implement RFID, users need to evaluate how all these technology elements integrate and operate across their entire corporate network and information sharing systems. It’s a mistake to get too focused on one element at the expense of the other three.”

RedPrairie works with food and beverage companies building custom RFID solutions to meet the needs of a range of clients, including processors of breakfast cereals, snack foods, spreads and drink products. The integrator then works with various wireless data collection system suppliers (such as RF Code) and labeling systems suppliers (such as Avery Dennison).

Chappell also points out users need to determine what and how much data they want to encode on the tags, in addition to EPC elements. “Right now, the options are 64-bit or 96-bit tags, but in the future 256-bit tags will be available,” she says. “Regardless of the tagging solution selected, for the foreseeable future, bar codes will continue to play a significant role, working in tandem with RFID tags.

“The industry is on a learning curve about RFID technology,” she continues. “Companies are still seeking greater understanding regarding the benefits and pitfalls. This learning curve is going to continue through 2005 and 2006. Widespread, real-world knowledge about the application of RFID in the food industry and other industries probably won’t mature and solidify until 2007 or 2008. New technologies do not come without certain complications.”

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