RFID Gazette

Wal-Mart is being sued for supposedly violating an RFID-based inventory control patent filed in 2002 by a company called RFID World. Also named in the suit are Gillette (now owned by Procter & Gamble), Michelin, Home Depot, Target, and Pfizer). Visit RFID Journal for more details of the suit.

Wal-Mart and Target are probably two of the largest retailers using RFID for inventory control and supply chain management. Conflicting media reports suggest that Wal-Mart has had some difficulties with their RFID rollout and might have scaled back their expectations, but they say they are moving ahead. Some of their suppliers are reluctant to use RFID because they have not perceived a reasonable ROI (return on investment). As a result, some suppliers have lagged behind expected milestones from Wal-Mart, causing the retailer to get heavy-handed and mandate the use of RFID by all suppliers.

While implementing the technology is often perceived as being expensive, one small manufacturer managed their initial RFID trial for around US$6,000, with just one employee. Part of the misperception might come from the confusion betweeen item-level tagging and pallet- and case-level tagging - the latter two of which are generally less costly than item-level tagging. However, with a lawsuit in progress, one which suggests that suppliers will also be in violation RFID World's patent if they comply with Wal-Mart's standard, it's possible that there will be more setbacks in Wal-Mart'sRFID rollout.

With cattle rustlers able to make as much as $20,000 in one hit, and RFID tags helping cattle ranchers in Texas and Oklahoma recently recover around 5,200 head of cattle, it's not suprising that the State of Michigan has passed a cattle tagging law. Under the new law, which took effect in March 2006, the new electronic ear tags will be the only officially-recognized identification. The US$1 tags will not only help keep track of cattle, but help in monitor diseases by allowing easier segregation of infected animals. Texan and Oklahoman ranchers have recovered millions of dollars worth of cattle because of RFID tags.

While only a tiny percentage of cattle are tagged, interest in tagging livestock in general is growing for a variety of reasons, including preventing the Mad Cow disease scares of a few years ago, as well as other ailments.As such, a number of companies such as TekVet, and ScoringAg are starting to offer livestock-tracking solutions. Warrnambool Livestock Exchange in Australia even uses an RFID system in their trading yard.

So hungry rustlers thwarted in Texas might just want to move to Michigan before all the cattle there are tagged. Look for those head with just the old orange metal tags, instead of the new ear tags.

With rumors recently quashed about China wanting their own RFID standard, the state of RFID there is causing some worries in the industry. IdTechEx recently sent technical consultant Ning Xiao around the country to visit RFID companies, users, and government officials. His findings are summarized at IDTechEx, but the gist is that China has the world's largest order for RFID, including their national ID card program. Ning's findings summarize a number of other areas of importance, including that around 65% of Wal-Mart's goods sold are from China.

Given this information, it's a good thing that China has stopped talking about having their own RFID standard, as doing so would have repercussions on the industry. Wal-Mart isn't the only giant retailer to purchase goods from China, and having to support different standards would likely be a technical nightmare, as well as increasing RFID implementation costs.

Nearly 600 million HF (High Frequency) RFID chips were shipped in 2005, according to ABI Research. Additionally, there was around a 104% increase in shipments of ISO14443 ICs (Integrated Circuit) chips from Q1 2005 to Q1 2006. Most of this growth is due to an increase in contactless payment/ credit cards, drug tagging, and e-passports, the latter of which currently involves 27 countries including the United States. [via Contactless News]

Security experts in Europe have show that the RFID chips in ICAO-compliant e-passports have security/ privacy flaws, including being clonable, but that has not stopped the passing out of e-passports, which started earlier this month in the United States, the European Union, and other countries. As for contactless payment cards, they seem to be growing in use, with organizations like Chase Bank intending to pass out at least 2 million RFID-enabled credit cards.

While item-level RFID tagging has been predicted to be where retailers (and manufacturers) will most benefit from tracking sales of consumer goods, it has not beenwidely implemented because of the cumulative cost of RFID tags, amongst other reasons. However, a study from IDTechEx says that item-level tagging is expected to grow  nearly 100-fold in the next ten years, from about US$0.16B to US$13B. [via MTB Europe; a very thorough article] Compare this to an IDTechEx report from Sep 2005 which predicted sales of US$24.5 B, for all types of RFID tags, by 2015.

Many of the items tagged to date are higher end consumer items - such as the expensive Fusion razor - as well as medical supplies, machine parts, etc. The sheer increase in tag volume expected is what will help grow the industry. It's not hard to predict that the growth from now until 2016 will be exponential, as more companies realize the value to them, in terms of both asset tracking and supply chain management.

The early growth will in turn drive item-level RFID tag prices down, which will then allow less expensive goods and items to be tagged, fueling even further use. There are still issues of radio frequency bands to be worked out, as certain items tagged in some countries would violate bandwidth regulations elsewhere. Each country has a different policy about frequency use, and there is still no single accepted standard worldwide. However, EPCGlobal's EPC (Electronic Product Code) is often considered the defacto standard in the RFID industry. In fact, EPCGlobal's Gen 2 RFID standard was recently accepted by the ISO (International Standards Organisation). This in itself should help propel the use of tags.

Hackers are usually labelled a disruptive lot, but sometimes they are exactly what you need to test a system. Enter the guys from Pure Hacking, professionals who perform what is called ethical hacking - hacking by permission - to test flaws and find potential security problems. While they cover a number of industries, they are focusing expertise in RFID systems, which have been the subject of much media coverage in relation to security issues. [via RFID Journal]

The Pure Hacking team actually uses a structured auditing process for all their tests, RFID-related or otherwise, and even offer an accredited anti-hacking course (non-RFID specific). I'm making an educated guess and saying that a lot of the techniques used to test software is very applicable to RFID systems. An RFID system may be the sum of its parts, but most especially it's the middleware that drives everything. Thus the many system vulnerabilities likely lie in the latter, in terms of allowing access to data. (I'm focusing on in-house issues, not what happens to a tagged item outside of your company. That's another aspect I'll try to discuss later.)

So if you are considering implementing RFID in your organization, it's important that you understand the data access process, even in broad terms. How do you want tag information to be accessed and updated? Do you need to implement layers of authorization for different roles in the company? Do you want a different layer of data available to the companies you supply parts and goods to? Human workflow is just as important as machine workflow. How do you intend for humans and machines to interact in terms of your RFID system? These are the kinds of questions consultants will ask you, before they even consider RFID solutions for implementation.

I know I'm being a bit vague here, but your company needs will vary by industry. I'll try to get into specific case studies in the future. For now, you can write out your intended workflow details, sketch out rough diagrams, and most certainly make a list of any questions that occur. If you can think of your own "penetration testing" test suite items, jot them down as well. There's a lot to consider here, but assessing your workflow ahead of time, before bringing in any consultants, helps you to be prepared with questions to ask. Knowing potential vulnerabilities ahead of time will help ease you through future hiccups.

Given all the concern about RFID in terms of security and privacy issues, it's not surprising that the Australian DHS (Dept of Human Services) hire the law firm of Minter Ellison to act as a legal advisor for the planned smartcard project. Under this new program, to start in 2008, citizens will have access to health and social services. The firm has previous experience with technology projects. [via Web Wereld] While there's no issue of implantation of RFID chips, this is still a good idea.

This is something that all young wanna-be lawyers should note. While articles from 2004 indicate that US alone will have 4 million lost jobs due to RFID, there will be new jobs created. One area will be in the area of technology law in the near future - and I wouldn't doubt, patent law, civil liberties, etc. This includes both RFID (radio frequency identification) and VoIP (Voice over Internet Protocol) technologies. I'm predicting this not only because I write a lot about technology, but my research shows that there will be a severe shortage of skilled workers in RFID.

The result of this, I feel, is that many companies will rush into implementation with out an appropriate project analysis phase, and without skilled consultants. Result? Lawsuits in the area of privacy and security, in particular. Unfortunate but very likely.

For more information about law and RFID, I'll recommend RFID Law Blog.

Here's an interesting mashup of two relatively new technologies, VoIP and RFID. Japanese department store giant Mitsukoshi has set up a system in their dressing rooms that makes use of both technologies in an innovative way, using a special Cisco VoIP/ RFID phone.

Customers use the dressing room phone's reader to scan the clothing item's RFID tag, then use the phone to talk to an employee. The employee can use their Cisco phone, which has a large display, to see what similar items are in stock, retrieve the items, and take them to the correct dressing room.[ Storefront Backtalk via The VoIP Weblog]

Now is this a brilliant use of technology or what? Mitsukoshi is not the only retailer to use RFID tagging, but they're one of the first I've heard of who have combined it with VoIP. Not only does this setup save the retailer lost wages from the employee standing around outside the dressing room, but the customer's happy because the employee is bringing similar items with minimal effort - and probably in the right size.

Of course, there's one huge drawback with the way things are set up: all those grubby hands and ears touching the dressing room phones. Still, this is a novel use of technology, hygiene issues aside, and certainly a scenario where upper-end IP phones with a display panel are worth it to the business.

For your convenience, here are links to articles posted here this week:

1. RFID Industry Teamups: Sybase and Intermec
2. RFID Roundup - Mon Aug 21/06
3. US Government Inconsistent About The Use Of RFID?
4. Mississippi Blood Services RFID Trial
5. I Am Not A Number - Tracking Australian Prisoners With Wearable RFID Tech
6. RFID Industry Teamups: DSI + Lawson
7. Persistent VeriChip Wants To RFID-Tag US Soldiers
8. Positive Side Effects Of Learning About RFID
9. RFID Roundup - Wed Aug 23/06
10. RFID More Widespread Than You Think?
11. Milk Cow-Tracking Blues
12. RFID Roundup - Thur Aug 24/06
13. RFID Roundup - Fri Aug 25/06
14. Try Before You Buy (Into) RFID

RFID Journal reports that New Balance, a shoes and sports apparel maker, is taking a positive approach to RFID, and conducting their own tech trials before diving in - whereas a lot of other companies are rushing to tag their products to meet retailers' demands and not making themselves aware of implementation issues before the fact. Another clothing and outerwear maker, Walls Industries, is also expecting to benefit from RFID technology, which they are using to comply with Wal-Mart mandates, as welll as to monitor their shipping process. Clothing makers have been using RFID in their products since at least last summer.

Trying before you buy into RFID is wise advice for any company finding themselves faced with either having to implement RFID technology or who think they may have to eventually. As much as some people would like it to, I don't think radio frequency technology is going away, despite concerns of security and privacy. And in it's current applications, there is still a lot to be learned.

Any sort of manufacturing company in an industry moving to RFID for asset tracking and supply chain management now has the task of hiring someone knowledgeable enough about the technology and its uses to even assess their needs, let alone try. It's much easier to blindly hire a consultant and hope for the best. But understanding and planning for RFID implementation is crucial, to reduce the chances of costly setbacks down the road.