The world is changing with RFID
D. Murali and Kumar Shankar Roy
Chennai: Animal-lovers will recall the helplessness with which many of us reacted when we saw the hunter aiming at lions from his comfortable position aboard the helicopter. Even as we realised the full significance and extrapolated our worst apprehensions, 'a bang' is heard and the animal falls to the ground. Perplexed, as we wonder why the whole scene is shown on television, call to mind how we felt relieved when the hunter (actually a scientist or the ranger of the game reserve) checks the tag on the animal's neck and then slowly leaves the scene.
That's RFID (Radio Frequency IDentification) for you. But that was years ago. Now you have RFID tags helping you out as you come to the counter of the retail outlet at the corner of main street, identifying your name and time of entry as you enter the plush interiors of the office, and even immobilise your car when the wrong key/hands touch it. "RFID today is a lot affordable. Prices are way below what the market has seen a year before and we see clear signs of RFID adoption happening in a big way in the near future," says Mr Pradhyumna Venkat, CEO, Gemini Traze, Chennai. His company deals with RFID and the tags. RFID is about speed and ease of use and merchants have been successfully deploying RFID-based payment transactions for loyalty applications. "The technology helps them with data to understand consumer behaviour and preferences. Today we find organisations collaborating to benefit out of this technology by joint advertising and marketing exercises," Mr Venkat remarks as talks about new areas where RFID is reaching out.
Catch him below in the interview with Business Line…
People have stopped asking what RFID is. But can you trace how it was a disruptive technology compared to what was state-of-the-art when it came in 15 years ago?
For those who still ask, Radio Frequency IDentification (RFID) is a method of remotely storing and retrieving data using devices, called RFID tags. These tags may be carried by people or animals or mounted on objects or vehicles. The purpose of an RFID system is to enable data to be transmitted by the tag, which is read by an RFID reader/ antenna and processed according to the needs of a particular application. The data transmitted by the tag may provide identification or location information, or specifics about the product tagged, such as price, colour, date of purchase, etc.
When RFID got into civilian use in 1980s, it was seen as a path-breaking proprietary technology for identification and tracking. The lack of standards, availability of multiple form factors, absence of integrated information systems, and performance constraints were major bottlenecks for RFID to get into mass deployment across diverse verticals. With the growth of information dissemination, the last decade has seen the technology mature and standards evolve to a level of widespread use and adoption.
We have seen how animals were tagged with RFID. But how did it all start?
RFID was first used in the World War II to automatically distinguish a "friendly" aircraft from that of a "foe". In early 1970s, RFID was used to tag equipment and personnel involved in the usage of nuclear materials and hazardous substances. In late 1980s, RFID-based animal identification gained a lot of momentum, before it was put to civilian use for remote keyless entry/ automobile immobilisers, employee identification, vehicle/ railcar/ container tracking. The emergence of standards in the late 1990s triggered the use of RFID for applications in business, consumer and public sector spheres.
Can you throw light on the economics of RFID, for an implementing organisation?
RFID today is a lot affordable. Let us consider a couple of examples, where it is assumed that the basic IT infrastructure (including application software) is available. 18-24 months down the line, many would have leveraged the power of RFID in their business.
We will start with retail. An apparel retail outlet with 50,000 articles would invest approximately Rs 20 lakh on RFID tags, security reader/ antenna, hand-held reader, PoS (point-of-sale) reader to completely RFID-enable the store. With tags being made reusable, there is no recurring cost. The same set-up/ infrastructure can also be used to track and identify the loyal or registered users.
Next, a RFID-based Asset tracking implementation of a company with 2,000 assets (IT and non-IT) would amount to less than Rs 5 lakh to reap the benefits of complete asset visibility using RFID.
For a repository, it would cost again about Rs 5 lakh to manage about 10,000 books / files using a RFID system consisting of desktop reader, hand-held reader along with security gates.
Let's come to manufacturing now. A work-in-progress solution for a manufacturing company would work to Rs 15 lakh with about 10,000 re-usable tags, conveyor belt readers, and hand-held readers.
What these examples show that is RFID is affordable today. The above prices are way below what the market saw a year ago; and we see clear signs of RFID adoption happening in a big way in the near future
On a lighter note, why have you added 'Traze' to your name?
We decided on the name "TRAZE" for our brand of RFID products, considering that RFID is a "Track and RAce" technology; "Z" was used as against "C" to denote "the spirit of Zorro" which is the passion, energy and excitement that we have for this technology.
Are there unfolding new areas of RFID application? Something futuristic…
We find RFID deployments in the most unusual and unexpected places. We find them tracking people and assets, cattle and tree identification, electronic cash and so on.
While cost consideration has forced a delay in item-level tagging, the technology has been successfully serving other applications. We find increasingly newer applications on RFID these days. Electronic ticketing, airport management system, postal and logistics applications are a few key areas where the technology has been successfully deployed.
Do you think that RFID adoption will be facilitated with appropriate changes to policies, processes and procedures?
Incorporation of RFID will necessitate a new look at existing business processes. As requirements and technological evolutions arise, companies will have to revisit their standard practices if they expect to gain new efficiencies from RFID. They will need to ensure that there is a high level of compatibility in the integration of RFID within the facility--how the physical layout is organised, how labour is deployed, and even how the equipment itself is constructed. The good news is that this level of change can prompt even better practices that otherwise would not have occurred.
We often come across articles about RFID use in credit card companies…
The use of cash or traditional 'mag-stripe' credit cards is increasingly coming under threat from RFID contact-less payment systems that require a user only to wave a small object such as a credit card, key ring or mobile phone near a reader terminal. Tests have shown that RFID payments enable consumers to make purchases more quickly than cash and magnetic-stripe payment cards.
Tests have also shown that consumers spend more when making non-cash payments. A study by Fusion Consulting mentions that credit cards with embedded RFID chips will become increasingly common throughout Asia in the years to come-if credit card companies can successfully leverage their existing networks, clearing systems and customer base. The use of mobile phones with embedded RFID chips for payments might also take hold in certain regions, it says, but overall the market for RFID credit cards is stronger.
Which is growing faster, the active or the passive RFID? Do we have the numbers, in terms of volume and value, globally and in India, of the business potential?
The global 'active' RFID market today accounts for less than one third of the total RFID market. While 'passive' RFID is predominantly used today, active RFID is set to take a leap in the future. IDTECH EX a leading market research firm in the UK predicts global revenues of $9.04 billion for passive and $8.43 billion for active. India also is witnessing a similar move to adopt active RFID products.
Can RFID technology be integrated with other technologies?
RFID will co-exist and integrate with the other auto ID technologies - with barcode for product identification and with biometrics for personnel authentication.
There are other technologies that RFID is used for providing an integrated and complete solution - GPS/GIS for vehicle identification and location, GSM/CDMA for enabling and authenticating mobile commerce, GPRS and wireless for remote data communication, sensors and controls for identifying and recording different parameters, automation systems and PLCs for integrated production systems.
Does communication or IT infrastructure pose a hurdle to RFID?
The availability of basic IT infrastructure for data storage and communication along with robust integrated information systems for data processing and mining is a pre-requisite for RFID deployment to provide the desired benefits. System scalability needs to be addressed right at the start and preparation of legacy IT systems and applications for real-time data is a must for efficient data collection and processing.
A few moments ago you had briefly touched upon the potential of RFID in advertising and marketing. You said they will be smarter…
RFID is about speed and ease of use. Merchants have been successfully deploying RFID based payment transactions for loyalty applications. The technology helps them with data to understand consumer behaviour and preferences. Today we find organisations collaborating to benefit out of this technology by joint advertising and marketing exercises. Exxon Mobil is an excellent case study that has successfully implemented RFID in this context.
RFID technology can bring tremendous innovation to the advertising industry in terms of both research and consumer communications. At present, the technology is being investigated and applied by widely diverse fields. It has entered the marketing area largely due to the engineers who have been eager to upgrade supply channel systems.
RFID technology also provides some interesting ways to communicate to consumers. A truly innovative advertising application has yet to be developed. The first agency to delight consumers with ease and fun of RFID - without raising privacy issues - will take leadership of the medium.
Is it possible to hack RFID? How can security be ensured?
The level of security built into the RFID device will vary depending on what the tag will be used for. Some RFID systems for identifying documents can be set up so that information stored on a tag can only be read within a specific distance or by authorised readers that contain the correct password. Other systems for tracking products that hold only product or part information have minimal security features and can be read by any compatible reader.
RFID tags provide far greater security than alternatives such as barcodes and magnetic stripes. Barcodes easily can be duplicated by printing out a copy of the barcode. A magnetic stripe also is easy to duplicate. There are numerous instances of money being stolen from victims' ATM accounts by copying the magnetic strip off of the victim's ATM card through a process called skimming.
While lab experiments have highlighted vulnerabilities in some forms of RFID, there have been no reported incidences of RFID being hacked in real life. RFID provides more security because the tag's data can be encrypted, making duplication and unauthorised access very difficult. Some tags can implement a personal firewall, releasing information only to authorised readers and only when required.
What RFID applications do you think are the most apt for India? Is there anything at all for the man at the bottom of the pyramid?
The growth in RFID-enabled applications in the Indian market will come from IT/ITES, manufacturing (automotive/ pharma/ apparel), Government/ public sector/ defence, educational institutions and banking/ services. The growth will also come from the export segment - partly demanded by the suppliers and partly incorporated by exporters to better their current levels of efficiencies and improve visibility.
In India, we are going to witness a number of pilots getting initiated in the 'industrial' and 'retail' segment; the Government sector will eventually be a huge contributor to the industry revenues.