- How Inexpensive RFID Is Revolutionizing the Supply ChainInnovations Case Narrative: The Electronic Product Code
Like the electric, water, and information networks most of modern society relies on, there is another network, one far less visible, that makes modern life possible: the global supply chain. Almost every physical product that is grown, manufactured, or packaged arrives at a store or at our home through a series of transfers involving ships, planes, trains, and trucks. In between, products may be aggregated into pallets and containers; moved with cranes or forklifts; stored in ports, warehouses, or on shelves; kept secure in armored vehicles or vaults; kept fresh in refrigerated storage or “reefer” transportation units; and packaged, repackaged, or finished before they get into our hands. Supply-chain management, which involves everything from the sourcing and procurement of materials to logistics, is a major part of the U.S. economy. In 2011, U.S. business logistics costs totaled $1.28 trillion and accounted for 8.5 percent of the GDP.1
I am one of the developers of a new suite of technologies and standards for the supply chain that is based on low-cost, ubiquitous radio frequency identification (RFID). Our system, which is called the Electronic Product Code (EPC), consists of protocols for communication between readers and tags, and standards for storing and sharing data across companies. The project started at MIT in 1998, and by 2003, engineers from more than one hundred companies and faculty and students from five universities were collaborating to flesh out the system, build prototypes, and conduct field trials. About 2.5 billion EPC tags will be produced and deployed worldwide in 2012, and companies including Walmart, Airbus, JCPenney, and Inditex are in the midst of rollouts. [End Page 35]
A Primer on RFID
RFID systems consist of readers and tags. The reader puts out an RF signal and “illuminates” the tag, which consists of a chip and an antenna. A passive RFID tag doesn’t have batteries; it absorbs some of the energy coming in from the RF signal to power up its chip and then reflects a signal back to the reader, in which its identity and other information are encoded. RFID systems can operate at different frequencies. National governments own the frequency spectrum in their territories and they license frequency bands to private and public customers, such as television stations, mobile phone companies, and military services. Each license specifies not just the frequency range but also the power or field strength the licensee can emit from its devices. Some frequency bands are kept “open” for general use, and RFID generally operates in these open bands. In 1998, most passive RFID was in the low-frequency (LF) and high-frequency (HF) bands. Performance at these bands is limited to a range of a few feet for a reasonably sized antenna. Ultra-high frequency offered the promise of a higher range, but the products available in 1998 did not provide the right price-to-performance ratio to take advantage of them.
When a reader starts reading tags, the tags must not respond all at once. The reader needs to space out the tags so it can hear each individually. This is called anti-collision, and it is a central factor not just in RFID but in all computer networking. Once a tag has been identified, the reader talks to each tag. The communication between reader and tags occurs by modulating the amplitude or frequency of the signal at the allocated frequency. The reader looks for these perturbations and extracts an encoded stream of bits—ones and zeros—to get data from the tag. The reader and tag need to have an agreed upon format for storing data: where the ID starts in the string, where it ends, what other data the tag may want to convey, etc. Together, the anti-collision scheme, the modulation scheme, the encoding scheme, and the data format are referred to as the protocol for communication between readers and tags.
The Supply Chain
Supply chains such as the caravans traveling the ancient Silk Road have spanned international borders for centuries. What has changed in recent history is the extent...