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RFID, AIDC and IoT News: Controversial 2007 Prediction that RFID Would not Replace Bar Coding in the Supply Chain Still Proving Accurate More than 10 Years Later

 

 

Noteworthy Blog Post by Heavey RF's Ronan Clinton is More Right than Wrong more than 10 Years Later

 

Aug. 14, 2018
SCDigest Editorial Staff

It was more than 10 years ago, in the summer of 2007, that Ronan Clinton, then managing director of Heavey RF, an Irish mobile data collection system provider, wrote a blog post on the company's web site that caused a minor stir in the RFID and AIDC (automatic identification and data capture) sectors when he said RFID was unlikely to ever replace bar coding, at least in the supply chain.

"History is littered with large technical blunders; RFID in the supply chain is potentially one of the biggest," wrote Clinton back then.

Supply Chain Digest Says...

Heavey RF's Clinton's perspectives in 2007 remain a lot more right than wrong - in the supply chain, good old bar coding continues to mostly rule the roost..

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"I'm fed up with companies telling me they want to implement RFID in their business," Clinton later told an electronics industry publication

"It is almost heresy to question the RFID bandwagon, but we produced this report as I can see worrying parallels between RFID and the dotcom hype. There is a risk that Irish retailers are being railroaded into a technology that is too costly and does not work," Clinton added.

"We've done RFID implementation for some clients but pretty much 99 times out of 100 companies don't need it," he said. "Firms need to ask themselves one question: Am I Walmart?"

What is interesting about that last comment is that in the summer of 2007 Walmart's RFID case tagging program was still theoretically alive though by that time nearing its last gasps before failing completely in 2009, later replaced by a limited item-level RFID tagging program in store.

We will note that Heavey RF is still around appears to be doing very well, and Clinton remains the CEO, but the original blog post is no longer an active page. A search for "RFID” on the company web site returns zero results, so it does not appear the company has had a change of heart over the past decade, as it focuses it solutions in traditional RF, bar coding, and Voice solutions.

The Heavey RF analysis argued that technical restrictions and cost would prevent RFID from replacing bar code technology. The report claimed that while costs will come down (and they have) there are too many different types of RFID tags required to make it a viable replacement for bar codes.

"A lot of company executives are going to seminars and hearing how great [RFID] is so they decide they want it for their business," said Clinton. "They forget the technical requirements of RFID and once they see the overall cost the project is shelved."

Clinton urged companies to stick with using bar coding until
RFID proved itself to be a cost effective technology. "If it ain't broke, don't fix it," he said.

Clinton added that "If you are an Irish company who does not have an RFID strategy, you have absolutely nothing to worry about," adding that "If it is ever legislated or mandated to you that you must have RFID in place in your company, you are actually better off waiting as long as possible to reap the benefits of ongoing developments."

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Clinton said that bar code technology is both more reliable and cost-effective than RFID. He pointed to some research reports that showed successful read rates of UHF Gen 2 tags being as as low then as 60% at case level - maybe true at the time, but performance is in fact much better today. with very high levels of reads for one case at a time, though reading a pallet full of cases is still something a challenge, at least at high speed.

As for cost, Clinton argued that RFID tags will never be as cost-effective as bar codes. "Ever," he wrote. "The RFID advocators will tell you that bulk purchases will drive the cost of the tag downward. That is like a helicopter manufacturer telling you that if everybody buys helicopters, the cost will come down to the cost of a car and when that happens you will want to have a helicopter because you have less boundaries, a better view and get from A to B quicker."

So what's our take on Clinton's comments now here in 2018?

While RFID has proven its value in many applications, its use in the broad supply chain is still limited, especially in the US (versus Europe), and also noticeably with very modest adoption in logistics versus manufacturing, where RFID has seen a high rate of deployment for applications such as work-in-process tracking (generally using re-usable totes or other containers fitted with RFID tags).

For example, when we last checked in 2016, of the most recent 50 RFID case studies published by the researchers at IDTechEx, just a handful were for what can be broadly considered supply chain applications, and most of those are for item level tagging at retail. Distribution and manufacturing case studies are close to non-existent in the IDTechEx library for recent deployments.

Tag costs are certainly well down versus 2007, but not enough yet to make them viable in many supply chain applications. Read rates as noted above are much better than 10 year ago, and are not really the barrier to RFID system deployment in most cases today, but that alone is not enough to carry the day.


"Greenfield" applications where a company is looking at automating a manual process are also in general more RFID friendly that trying to come up with an ROI from replacing an existing bar code system.

 

We will also note there is some movement that soft goods companies forced to RFID tag for customers such as Macy's may - just may - use those tags to track goods in duistribution, but we'll see.

In the long term, SCDigest believes RFID indeed will win out, because it will enable more truly automated data collection. (See The Seven Reasons RFID will Eventually Win in the Supply Chain.) But that long term may still be many years away.

But for now, Heavey RF's Clinton's perspectives in 2007 remain a lot more right than wrong - in the supply chain, good old bar coding continues to mostly rule the roost.

How would you rate Clinton's views more than 10 years later? Will bar coding keep RFID at bay in supply chain applications? Let us know your thoughts at the Feedback section below.

 

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