RFID may be getting all the attention, but many agree companies will continue to use bar codes.
Despite all the noise about the impact of radio-frequency identification technology on retailers and their suppliers, well-entrenched bar codes will continue to play a vital role for many years.
That was the consensus of executives attending a "Truth in Technologies 2004: RFID and Bar Codes" conference at Stony Brook University on Long Island Wednesday, which was hosted by the AIDC 100, a nonprofit organization of automatic identification and data capture professionals.
For nearly 10 years, the U.S. Department of Defense has been using Savi Technology Inc.'s active RFID tags on freight containers, consolidated air pallets, and large engine containers shipped to its sites. Active tags, unlike passive tags, have batteries built into them. Now, as part of a mandate that takes effect in January, the Defense Department is asking its suppliers to affix passive RFID tags on cases and pallets they ship to key receiving sites, the Defense Distribution San Joaquin center in California, and the Defense Distribution Susquehanna center in Pennsylvania. The department wants to take advantage of RFID's benefits, including the fact that RFID tags can be re-used and don't have to be positioned directly under scanners, in line-of-sight positions, to be read. Nonetheless, the Defense Department says it will continue to use bar-code technology.
"We feel that bar codes have done a good job so far, but we want the re-usable read/write capabilities and the automated visibility that isn't possible with bar codes," said Kathy Smith, special assistant of the Office of the Secretary of Defense Supply Chain Integration office with the Department of Defense. "However, bar codes aren't going away; we'll just be using RFID in cases where line of site is questionable, where read/write is required, where unattended scanning is desired, and during simultaneous reading and identification of multiple tags." Smith told conference attendees that the Defense Department will require that two-dimensional bar codes be used on military shipping labels in addition to the RFID tags on cases and pallets.
Two-dimensional bar codes are more advanced than traditional bar codes. They can store more characters and don't require line-of-sight readings. By 2007, the Defense Department will require these bar codes on unique items such as circuit boards, critical parts, and on items valued at $5,000 or more, Smith said. All three technologies--active RFID tags, passive RFID tags, and two-dimensional bar codes--will complement each other, Smith said.
Similar to the Department of Defense, the U.S. Air Force has been tagging freight containers with active RFID tags at the Military Ocean Terminal at Sunny Point, N.C., for the past three years. Although active RFID tags have proven successful, Mark Reboulet, automated identification technology manager of the Air Force Material Command, said it's unclear how active RFID tags will behave in the ammunition environment. The Air Force will begin a project on Nov. 8 to test passive RFID. But the Air Force isn't going to depend solely on RFID. "Our hand-held readers will have a bar-code capability and every RFID label will have a readable bar code in the back of it. So, if an RFID tag fails, we will have a bar code to fall back on," he said.
For its November RFID test, the Air Force has purchased 5,000 class 0 tags from Matric Inc. to put on boxes shipped from the U.S. to a base in Germany, where readers have been installed. Reboulet said the Air Force is only purchasing 5,000 class 0 tags because it plans to use next-generation RFID tags instead, as soon as they're available.
Energizer Holdings Inc. is working with its third-party logistics provider, Exel Logistics, part of NFC plc, to implement RFID. Although Energizer has seen success with class 0 and class 0+ tags, the company isn't expecting to see a return on its RFID investment for a long time, Dick Pocek, director of logistics at Energizer, told conference attendees. Energizer won't change its use of bar codes near term, he said, and the company's internal projects will continue as scheduled, using bar codes. "As we move product down the conveyer line, we want to verify that the RFID tag is a working tag and verify it against our bar codes, which unlike RFID, have proven to be 100% successful," said Pocek.
While the Air Force and Energizer see RFID and bar codes as co-existing technologies, Hospira Worldwide Inc., a specialty pharmaceuticals and medication-delivery company, is still making a transition from linear bar codes to reduced-space symbology (RSS) bar codes and said it isn't ready for RFID. Traditionally, Hospira has used standard UCC.EAN-128 linear bar codes, but they're too large to fit on injectable and intravenous-solution products. The company recently adopted the newer reduced-space symbology for bar-coding those types of products because it allows all information to fit in an area as small as a pen cap. The technology has been successfully tested; now Hospira must replace drug codes on injectable and I.V. solution products with RSS.
In the health-care industry, RFID may be useful for patient identification and for locating pumps, equipment, and drugs. But there are plenty of hurdles. RF waves could interfere with equipment such as pacemakers, and RFID tags can't always be read through liquid solutions, said Steven Braun, marketing manager at Hospira. RFID tags still cost too much, and the health-care industry, known to lag behind others when it comes to IT, may not be prepared for such a leading-edge technology as RFID. "Hospitals aren't ready to adopt RFID from a financial perspective and because of the hospital IT infrastructure. They're barely ready for bar-coding," said Braun. "I see in 10 to 20 years bar-coding still being used at hospitals, as opposed to RFID."
A complete transition to RFID will take between 10 and 15 years, according to Dr. John Hamilton, assistant professor of management and management information systems at the John Cook School of Business at St. Louis University. That means companies implementing the technology will need to make important strategic decisions and not look at RFID simply as the technology that will solve supply-chain problems. "RFID implementation will take a long time, which means bar codes aren't going away. They both must co-exist in order to serve different user needs," Hamilton said.
Richard Meyers, former president of the AIDC 100, agreed. Companies implementing RFID shouldn't look for ways to replace bar codes with RFID, he told conference attendees. Instead, they should identify the supply-chain problem and select the technology that best solves that problem. "I don't see an end date for the use of bar-coding," he said. "Bar codes are a viable, cheap technology driven by standards and unless standards change, bar codes will remain."
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