Where's RFID Going Next?
Supply-chain projects spurred development. Now chips are turning up in ever-more-innovative uses.
Soccer balls, casino chips, toilets, wristbands, payment cards, cars, and power tools. Yes, radio-frequency identification--that cost-prohibitive, experimental, controversial technology--is popping up in all sorts of places. And while it's still anyone's guess how many years it will take before RFID tags are cheap enough to revolutionize the tracking of goods in supply chains, RFID is proving itself in new and unexpected ways.
Sears Holdings Corp. is using RFID to track merchandise returns (see story, "Return To Sender: RFID Reduces Errors For Sears"). And who would've guessed a technology that has the business world in knots over cost and privacy would nonchalantly stroll into the world of sports? Wearable RFID tags are now common at marathons and triathlons, tracking times for competitors throughout races. Now the Federation Internationale de Football Association and Adidas-Solomon AG are developing a soccer ball embedded with an RFID chip, hoping to end debates over whether a ball crossed the goal line. The high-tech ball will be tested at the under-17 world championship in Peru this fall.
- A Smarter Approach: Inside IBM Business Analytics Solutions for Mid-Size Businesses
- Managing Threats in the Digital Age
The Jacksonville Suns, meanwhile, offer RFID-chip-embedded wristbands for cashless payments for food and drink at its minor-league ball games. It doesn't only get concession lines moving faster; a test showed a 10% increase in per-person spending. Another minor-league baseball team, the Nashville Sounds, deployed the system last month.
American Express Co. just this month began issuing payment cards embedded with RFID chips--which will require stores to install RFID readers before they're of any use--following similar moves by MasterCard and Visa. 7-Eleven Inc. and CVS Corp. drug stores plan to accept the cards. "Most business cases for RFID that work well are 100 times simpler than the problems the consumer-goods and retail industry are trying to solve," says Jeff Woods, an analyst with research firm Gartner.
And RFID has become part of Robert Bosch Tool Corp.'s sales strategy. The company, which sells pricey power tools that tend to disappear from construction jobs, in April started offering gear embedded with RFID tags, along with readers and software for tracking how and where it's being used. It can add 2% to 5% to the cost of products, but stolen tools cost the construction industry an estimated $1 bil- lion a year.
Why all the activity? After all, radio-frequency chip technology has been around for decades. Credit in part the recent ambitious, industrywide efforts led by Wal-Mart, German retailer Metro, and the Defense Department. They've helped spur development and standards for today's breed of passive RFID chips, which don't need batteries and are sparked to life when they pass a reader. Mandates from those organizations have given RFID mass-market exposure to all types of industries. Total sales of RFID readers, tags, software, and services are expected to pass $5 billion within two years, up from $2.1 billion this year and $1.1 billion two years ago, according to investment firm Robert W. Baird & Co. "We're starting to see a lot of non-supply-chain applications worldwide," Baird analyst Reik Read says. "Exploration efforts from Wal- Mart and the Department of Defense are starting to pan out in the form of applications you would have never expected."
Take gambling. Some casinos are trying RFID in gaming chips to stop the use of counterfeits. Gaming Partners International Corp. has sold more than 3 million RFID gaming chips and hundreds of readers to casinos worldwide, including the Wynn Resort in Las Vegas, which opened in April. The Hard Rock Casino in Las Vegas began experimenting with RFID chips at some blackjack tables earlier this year.
Automakers are working on RFID for applications such as keyless entry and government compliance for tires, says Morris Brown, program manager for materials management at Automotive Industry Action Group. The industry spends 5% of its annual IT budget on RFID technology, according to AMR Research.
The RFID-enabled products coming out now aren't of the Microsoft "home of the future" variety, where a microwave scans a box of macaroni and cheese for the correct time and temperature for cooking. Says Mike Willis, VP and general manager of RFID technologies at Intermec Technologies Corp., "Today the simple applications are the ones making the most impact."
And not always in a good way. The privacy controversy follows RFID most everywhere it goes, as some people worry about being constantly tracked. Administrators at Britton Elementary School in Sutter, Calif., issued RFID-chipped ID tags to kids in January, but parents quickly squashed the program with help from the American Civil Liberties Union. The State Department's plan to put RFID chips in new electronic U.S. passports later this year has raised concerns about whether the passports could be "skimmed" by identity thieves and terrorists. The State Department says it's exploring a number of security options, including encryption, for electronic passports.
But in the evolution of RFID, even people-tracking is finding effective--and accepted--uses. At the Los Angeles County Sheriff's Department, a program slated to start in January will monitor inmates using active RFID, at a first-phase cost of $1.5 million. The department hopes the tracking will cut down on the number of violent incidents in L.A. County jails.
At the Jacobi Medical Center in the Bronx, N.Y., RFID tags have found their way into patient wristbands. Each tag contains a patient's name and medical record number. Nurses scan it using a tablet PC containing a reader and pull corresponding records from the hospital's database. Hospital personnel have seen a reduction in drug-administration errors, and CIO Daniel Morreale says freeing nursing staff from having to type information into a database has led to improved productivity. "As we expand the system throughout the network of two hospitals, two emergency rooms, and all 46 nursing units, I'm looking at more than a $100,000 investment for equipment," Morreale says.
More-affordable chips are clearly driving some new applications. Graduate students at the University of Washington use RFID tags in studying genetically modified trees, tapping a chip into a tree that's read with handheld devices throughout its life to improve conservation techniques. A doctoral student at the University of Florida is creating RFID grids in carpeting, hallway baseboards, and along outdoor walkways to help visually impaired and other disabled students navigate the campus. And a company called AquaOne Technologies Inc. sells an RFID-enabled water-monitoring device that can be attached to a toilet to send an alert or a signal to shut off the water when a toilet is leaking or overflowing.
It's certain that not all of this ingenuity will pan out as real progress. Will an RFID payment card prove so much handier than swiping a magnetic-strip card? And already you hear the grumbling about an RFID chip desecrating a soccer ball.
One thing's for sure: Despite all of the hand-wringing and head-scratching over RFID technology, nothing will stop it from showing up where it offers new and better ways of doing things. Goal!