Tuesday, July 26, 2005

RFID in Rochester

What is the current state of RFID deployment in Rochester?

In general, local companies describe a high degree of interest, but only a modest level of integration.

Why the discrepancy between what local companies want to do with RFID and what they are actually doing? I spoke with some of Rochester’s early adopters to put a local face on track-and-trace.

Leading folding carton manufacturer Diamond Packaging (Henrietta, NY) is currently evaluating available technologies for in-line applications of RFID tags. “Without question, RFID is one of the hottest topics in packaging”, says Dennis Bacchetta, Marketing Manager at Diamond. “Companies are moving from ‘Does it make sense?’ to ‘How can we implement RFID?’ ”

Indeed, RFID seems to make sense to many of the markets Diamond serves. Interest in item-level RFID tagging has been driven primarily by the pharmaceutical, personal care and cosmetic industries, which are particularly vulnerable to theft and counterfeiting. RFID tags are virtually incorruptible and almost impossible to counterfeit. Other obvious benefits include impeccable accountability from the point of manufacture to the point of sale, and precise, real-time inventory control.

If a company decides that RFID makes sense for them, what are some of the implementation issues they may deal with? According to Bacchetta, “The primary challenge is ensuring compatibility with various vendors in the supply chain.”

RFID technology is so diverse in form and function that what might later be a strength is actually a limitation right now. Rick Howe, VP of Sales and Marketing at Hover-Davis, agrees. “RFID is evolving differently than a lot of people expected. There are dozens of different technologies. There are dozens of different markets, each with different needs.”

Howe is certainly in a position to make that assessment. Hover-Davis is a Rochester-based company that produces world class feeding systems for silicon wafers, including those used in RFID tags.

Although RFID applications currently represent less than 1% of Hover-Davis’s market, Howe sees significant growth potential once RFID integration is purified. “RFID is evolving in a step function like a lot of disruptive technologies do. There needs to be a lot more maturation of technologies before item-level tagging can happen.”

In order to advance business interests in balance with consumer concerns, EPCglobal developed and published their Guidelines on EPC for Consumer Products, designed “to allow EPC to realize its potential for consumers, retailers and suppliers, by addressing privacy concerns prompted by the current state of the technology while establishing principles for dealing with its evolution and implementation.”

Rochester’s own Wegmans Food Markets is well-known for demonstrating strong principles of community involvement. In addition to exploring internal applications for RFID, Wegmans continues to support the larger community by taking an active role in developing RFID standards.

Marianne Timmons is the director of Business to Business at Wegmans. “Wegmans is a member of EPCglobal and is exploring opportunities for a future implementation. Today Wegmans is focused on building a solid foundation for the future of EPC through their Data Synchronization efforts.”

Interroperability may be the primary challenge of wide-scale RFID deployment, but it certainly isn’t the only one. Bacchetta identified two others: “A secondary concern is cost implications and the ability to ensure ROI. Finally, considerable work needs to be done to assess and compare the various tag technologies currently available.”

Howe agrees that cost and technology diversity have caused people to redefine their understanding of RFID, and shift the benefit expectation from an item-level intervention to a middle-market tool, at least for now. “Many people thought that item-level tagging was going to become the utopia of the RFID industry. It’s actually going much more in the direction of middle-market segments—pets, airline and ship cargo—seeping into middle-volume markets. RFID is not going to go from infancy to soup cans overnight.”

Birds Eye Foods, the nation’s leader in frozen vegetables, is a Rochester-based company actively using RFID in their supply chain management. As local market experience continues to grow, we can expect to find more companies following suit.

Rochester is far from the brink of an RFID revolution, but everyone I spoke with for this article are optimistic about the future of RFID. “These are all challenges that are typical of any emerging technology”, Bacchetta remarked. “None are insurmountable, and I expect that all will be resolved within the next few years.”

Sally Bacchetta - Freelance Writer