Small Business Questions & Answers


Filed under Marketing

Ask About RFIDs

by O.T. Lunch | May 26, 2012

Subject :Marketing

Dear Toolkit,

A potentially large customer has told me that I need to "get with RFIDs and away from bar codes" if I want to do business with his firm. Not wanting to seem completely out-to-lunch, I responded that we were developing our plan to do just that. Help! I haven't a clue what he's talking about.

O.T. Lunch

Dear O.T.,

RFID stands for "Radio Frequency IDentification" smart tags that are simply tiny electronic chips carrying important data in the form of a serial number, for example. Essentially they're bar codes on steroids or you can think of them as radio bar codes.

The technology consists of three parts: the radio chip transponder (transmitter-responder), the reader transceiver (transmitter-receiver) and the software that makes sense out of what's being read. This is a not-so-new type of technology that's been in use some time on a limited basis.

Rudimentary RFIDS are all around us these days. They let us use the express lane to go through toll booths, they let us buy gas at our corner gas station with a wave of device, and in some locations they even let us buy a hamburger. I can get into the side door of my office building every morning waving my chip-embedded employee ID card in the general vicinity of a reader device. If my neighbor loses her cat, the finder can take it to any vet to read the ID chip embedded under the creature's furry skin, hastening kitty's return to her worried owner.

RFIDs are rapidly becoming more popular, largely because it's getting cheaper to produce the little tags and the devices that read them. . .not to mention the fact that Wal-Mart, the world's largest retailer, is pushing its suppliers to deploy RFID to expedite its supply chain inventory tracking processes. The Department of Defense is doing likewise.

Major customers like these will hurry the adoption of this technology along, and firms such as Zebra Technologies, the bar code leader, as well as IBM, Cisco and a host of other electronic and software innovators are hard at work developing ever more sophisticated gadgets and applications.

The industry has created EPCglobal, a standard-setting group jointly run by EAN International and the Uniform Code Council (the same groups that manage the universal product bar code UPC network) to manage the Electronic Product Code (EPC) network worldwide--a sure sign that this technology is here to stay.

Eventually, these little devices may entirely replace bar codes because, unlike bar codes, they can be read from a distance and don't require a line-of-sight optical scanner. In other words, they can be read through packaging and behind stacks of other inventory.

Some of these applications will create significant privacy concerns in the future. Coded tags will eventually walk out of the store with you, embedded in your new shoes or that six-pack, or the tires on your car. Some folks are concerned that anyone with a transceiver could learn all about you just by waving it in your direction--what brand of jeans you prefer, where your car is located, where you work and so on. Some sort of encryption will no doubt be developed to neutralize this distasteful transfer of information

Keep an eye out for ways you think RFIDs might be used to benefit retailers, the shipping industry, manufacturers, government and even your local shirt laundry. And also keep your eye out for all those unintended consequences that might arise out of this new technology.