Radio Frequency Identification automated Technology

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Radio Frequency Identification automated Technology


RFID or Radio Frequency Identification is a contactless automated technology that makes the use of radio waves to identify physical objects. It is grouped under the broad category of automatic identification technologies which also include bar codes, optical character readers and some biometric technologies, such as retinal scans. All these technologies are used to reduce the amount of time and labor needed to input data manually and to improve data accuracy. While some of the auto-ID technologies, like bar code systems, often require a person to manually scan a label or tag, RFID captures data on tags and transmits it to a computer system without needing a person to be involved.

The RFID[1] system consists of a tag which is made up of a microchip with a coiled antenna fixed to an object and a reader or interrogator with an antenna. The microchip in the tag has an integrated circuit for storing and processing information, modulating and demodulating a radio-frequency signal. The chip can store as much as 2 kilobytes of data. The purpose of antenna is to receive and transmit the signal. The reader is needed to retrieve the data stored on RFID tag. It has one or more antennas that emit radio waves and receive signals back from the tag. This information is then passed in digital form to a computer system by the reader.

There are three types of RFID Tags- active, passive or semi-passive. While active RFID tags use a battery to power the microchip's circuitry and broadcast signals to the reader, passive tags are powered by the electromagnetic waves sent out by the reader. The third type i.e. semi-passive uses both their own batteries and waves from the reader. Since active and semi-passive tags are more expensive, they are typically used for higher-value goods that are scanned over longer distances.

Though several companies have been using RFID[2] for more than a decade, its cost had limited its use in the past. For many applications, such as tracking parts for just-in-time manufacturing, companies could justify the cost of tags- a dollar or more per tag- by the savings an RFID system generates. Also when RFID was used to track assets or reusable containers within the company's own premises, the tags could be reused making it cost effective. But the high cost prevented its large scale use in open supply chains for tracking goods. In these cases, RFID tags are put on cases and pallets of products by one company and read by another, due to which they can't be reused. However, in recent times due to cost efficient production, RFID has started to be used in Retail industry to eliminate long customer billing queues, aircraft industry for baggage management and so on.


RFID Technology has been around for a long time almost from the early decades of the eighteenth century - its origin can be roughly traced to around 1920. It was developed in MIT[3] as a means of communication between robots.

The popular predecessors of RFID could be argued to the following two instances:

§ Radio frequency was used for identification purposes in the IFF transponder installed in aircraft. The IFF[4] meaning Identification, Friend or Foe - was used to identify if the flying aircraft was a friend or a foe. This application was used in World War II by the British to distinguish between returning flights as enemy occupied the territory which was less than 25 miles away. This technology is used till date in commercial aircraft.

§ In 1945, Leon Theremin, created an espionage tool for the Soviet Union. Though this invention carried no tag as in RFID, it retransmitted radio frequency with audio information.

In 1948, a paper by Harry Stockman titled "Communication by Means of Reflected Power" (Proceedings of the IRE, pp 1196-1204, October 1948) explored the usage of RFID. Stockman predicted that "... considerable research and development work has to be done before the remaining basic problems in reflected-power communication are solved, and before the field of useful applications is explored.”[5]

With Uranium and nuclear technology gaining importance in the sixties, the deadly nature of Uranium led to safety concerns. So employees and equipments were tagged to mitigate such concerns and RFID came into picture thus. This was done in Los Alamos National Laboratory (LANL) on the request of Energy department of U.S. Government. Transponders were installed in trucks and readers at the gates. The gate antenna would wake up the transponder in the truck, which would respond with an ID and potentially other data, such as the driver's ID.

In the fifties and sixties, RF technology was researched extensively. Scientists from various nations demonstrated how remote objects could be identified. This was used in electronic surveillance - this is in use even today. Objects carry a 1-bit tag which is turned on or off depending on whether the customer has paid or not.

The first patent to RFID technology as used today was registered in 1973 by Mario Cardullo's. Details of the patent are as follows: U.S. Patent 3,713,148 on January 23, 1973. The patented product was a passive radio transponder with memory, powered by the interrogating signal. It was demonstrated in 1971 to the New York Port. It consisted of a transponder with 16 bit memory for use as a toll device. The basic Cardullo patent covers the use of RF, sound and light as transmission media. The tag used had rewritable memory.

In 1973, Los Alamos National Laboratory (LANL) demonstrated the use of passive and semi-passive RFID tags. Around 1977, the technology was leveraged for civilian purposes from LANL - the transferred to two companies - Amtech in New Mexico and Identronix Research in Santa Cruz, California. Thus, various uses started getting explored. One of the few experiments carried out was installing a RFID transponder in a diary cow to monitor ID and temperature. This would help in studying the cow's health and prevent overfeeding.

Railroads shifted to RFID after unsuccessful usage of Bar code to keep track of rolling stock.

By the eighties, usage of RFID shifted to process improvement. Cost reduction & size reduction were certain examples.

Over years, these devices were commercialized and companies moved to higher frequency range- which offered faster transfer rates. Today, 13.56 MHz RFID systems are used for access control, payment system and smart cards. In the early 1990s, engineers from IBM patented an ultra-high frequency RFID system. UHF offered longer read range and faster data transfer.

Wide scale roll out was initiated by the Army personnel - the largest deployment of active RFID was seen in the US Department of Defense. They use active tags on more than a million shipping containers that travel outside the country.


Components and Process

The basic RFID technology makes use of the following components[6]:

1. Active tags - Active tags require a power source. They are either connected to a powered infrastructure or use energy stored in an integrated battery.

2. Passive tags - The lifetime of a passive tag is limited by the stored energy, balanced against the number of read operations the device must undergo. Passive RFID is of interest because the tags don't require batteries or maintenance. The tags also have an indefinite operational life and are small enough to fit into a practical adhesive label.

3. Tag reader

* The tag reader is responsible for powering and communicating with a tag

* The reader emits radio waves in ranges of anywhere from one inch to 100 feet or more, depending upon its power output and the radio frequency used.

* When an RFID tag passes through the electromagnetic zone, it detects the reader's activation signal.

* The reader also decodes the data encoded in the tag's integrated circuit (silicon chip) and the data is passed to the host computer for processing.

4. Tag Antenna

* The antenna emits radio signals to activate the tag and to read and write data to it.

* It captures energy and transfers the tag's ID.

* The encapsulation maintains the tag's integrity and protects the antenna and chip from environmental conditions or reagents. The encapsulation could be a small glass vial or a laminar plastic substrate with adhesive on one side to enable easy attachment to goods.

RFID vs Barcode



RFID Benefit Example

Line of sight


Not Required

No need to orientate scanned items

Number of items that can be scanned



Very fast inventory count

Automation and Accuracy

Multiple read errors and prone to miss caning

Fully automated and highly accurate

Error free inventory count


Only series or type

Unique item level

Targeted recall

Data Storage

Only a meaningless code

Upto several kb

Real time data access in any location

RFID Standards

When an organisation trades globally and intends using RFID systems across national boundaries, standards and regulations are more important to ensure safety and the interoperability of tags and readers between trading partners. Where an orgainisation wishes to operate a 'closed-loop' system which is solely intended for internal use within the one organisation - then it is relatively easier to select and optimise a system for those specific internal requirements.

RFID is not regulated by one trade body - however it is in fact influenced by a number of official bodies for different aspects. Frequencies, power levels and operating cycles are regulated in Europe by the European Telecommunications Standards Institute ( ETSI ) and in the UK by OFCOM.

Protocols for communication between tags and readers are proposed by a number bodies and equipment manufacturers. An organisation that is new to the subject of RFID often believes that there is one standard technology called 'RFID' when in fact there are various frequencies, standards, power levels, protocols, tag types and architectures with differing operational and performance characteristics.


· ʺLine of sightʺ[7]is not required to read a RFID tag as against a barcode. RFID tagged items can be read even if they are behind other items. There is no need for physical contact between the data carrier and the communication device.

· Because line-of-sight is not required to read RFID tags, inventory can be performed in a highly efficient method. For example, pallets in a warehouse can be read, inventoried, and their location can be determined no matter where the tag is placed on the pallet. This is because the radio waves from the reader are strong enough for the tag to respond regardless of location.

· Line of sight requirements also limit theruggedness of barcodesas well as thereusability of barcodes. (Since line of sight is required for barcodes, the printed barcode must be exposed on the outside of the product, where it is subject to greater wear and tear.) RFID tags can also be implanted within the product itself, guaranteeing greater ruggedness and reusability.

· The readability of barcodes can be impaired by dirt, moisture, abrasion, or packaging contours. RFID tags are not affected by those conditions.

· RFID tags are very simple to install/inject inside the body of animals, thus helping to keep a track on them. This is useful in animal husbandry and on poultry farms. The installed RFID tags give information about the age, vaccinations and health of the animals.

· Barcode[8] scannershave repeatedly failed in providing security to gems and jewelleries in shops. But nowadays, RFID tags are placed inside jewellery items and an alarm is installed at the exit doors.

· Barcodes have no read/write capability; that is, you cannot add to the information written on a printed barcode. RFID tags, however, can be read/write devices; the RFID reader can communicate with the tag, and alter as much of the information as the tag design will allow. The RFID tags can store data up to 2 KB whereas; the bar code has the ability to read just 10-12 digits.

· An RFID tag could identify the item (not just its manufacturer and category). Bar codes only provide a manufacturer and product type. They don't identify unique items.

· RFID technology is better than bar codes as it cannot be easily replicated and therefore, it increases the security of the product.

· Human intervention is required to scan a barcode, whereas in most applications an RFID tag can be detected ʺhands off.ʺ

· RFID technology is a labor-saving technology. This translates to cost savings. Using bar code technology costs, on average, 7 cents in human labor to scan a bar code. In addition, labor is required to put each label correctly on each plastic crate holder or panel. Add a cost for label changes and replacements for "non readable" codes. And add another for administrative costs for labels that aren't read properly, which causes inventory errors and non-compliant returns and penalties.

· Tags are available in a great range of types, sizes and materials

· [9]Relatively low maintenance cost

· Extremely low error rate


· Dead areas and orientation problems- RFID works similar to the way a cell phone or wireless network does. Like these technologies, there may be certain areas that have weaker signals or interference. In addition, poor read rates are sometimes a problem when the tag is rotated into an orientation that does not align well with the reader. These issues are usually minimized by proper implementation of multiple readers and use of tags with multiple axis antennas.

· Since RFID systems make use of the electromagnetic spectrum (like WiFi networks or cellphones), they are relatively easy to jam using energy at the right frequency. This could be disastrous in environments like hospitals or in the military in the field. Also, active RFID tags (those that use a battery to increase the range of the system) can be repeatedly interrogated to wear the battery down, thereby disrupting the system.

· Interference [10]has been observed if devices such as forklifts and walkie-talkies are in the vicinity of the distribution centers. The presence of mobile phone towers has been found to interfere with RFID radio waves. Wal-Mart, the retail sector giant, has installed billions of RFID tags in their products throughout the world and they have encountered such problems.

· Security concerns- Because RFID is not a line-of-sight technology like bar-coding, new security issues could develop. For example, a competitor could set up a high-gain directional antenna to scan tags in trucks going to a warehouse. From the data received, this competitor could determine flow rates of various products. Additionally, when RFID is used for high-security operations such as payment methods, fraud is always a possibility.

· Ghost tags[11]- In rare cases, if multiple tags are read at the same time the reader will sometimes read a tag that does not exist. Therefore, some type of read verification, such as a CRC, should be implemented in either the tag, the reader or the data read from the tag.

· Proximity issues[12]- RFID tags cannot be read well when placed on metal or liquid objects or when these objects are between the reader and the tag. Nearly any object that is between the reader and the tag reduces the distance the tag can be read from.

· High cost- Because this technology is still new, the components and tags are expensive compared to barcodes. In addition, software and support personnel needed to install and operate the RFID reading systems (in a warehouse for example) may be more costly to employ.

· Unread tags- When reading multiple tags at the same time, it is possible that some tags will not be read and there is no sure method of determining this when the objects are not in sight. This problem does not occur with barcodes, because when the barcode is scanned, it is instantly verified when read by a beep from the scanner and the data can then be entered manually if it does not scan.

· Vulnerable to damage- Water, static discharge or high-powered magnetic surges (such as lightning strike) may damage the tags.

· Global Standards: RFID has been implemented in different ways by different manufacturers. There still does not exist a single global standard.

· Consumers may also have problems with RFID standards. For example, ExxonMobil's SpeedPass system is a proprietary RFID system. If another company wanted to use the convenient SpeedPass they would have to pay to access it. On the other hand, if every company had their own "SpeedPass" system, a consumer would need to carry many different devices with them.



Retail is one area where RFID has been used extensively. It helps in reducing cost, increasing revenue and leads to increased customer satisfaction. Increased and accurate information leads to lesser inventory and inventory cost as a result goes down. Other than electronic surveillance, inventory tracking, RFID is used for Brand authentication as well which ensure that cheap substitutes are not sold to customers thus ensuring customer satisfactions. Another application of RFID in retail sector is Promotional display deployment. This was a surrogate to studying marketing impact. Asset tracking applications were also possible through RFID in retail sector.

It is used in the following applications:

In-store inventory Management:

Physical inventory is time consuming - employing RFID to take stock of inventory reduces time taken by physical stock taking by 90%. This is more accurate and stock taking can be done several times a day. Thus, cost is greatly reduced.

Brand Authentication:

This is used to check counterfeiting of high-value cosmetics, electronics, apparel and pharmaceuticals. This helps in protecting brand integrity by avoiding cheap duplicates. It enhances customer satisfaction by ensuring quality and retaining confidence.

Asset Tracking:

This is used to find lost assets and track assets - this would help in more efficient utilisation of assets. This would lead to supporting business processed with lesser number of assets.

Inventory Visibility in the Supply Chain:

The prompt inventory tracking prevents stock outs and loss of customer satisfaction. This provides vendors with real-time visibility of inventory in the supply chain, improving forecast accuracy and damping the inventory whipsaw effect.[13]

Case study of WAL-MART

Wal-Mart and U.S. Department of Defence are the main drivers of RFID technology. Wal-Mart could drive this technology to almost everyone who did business with them due to huge scale of operations and very high bargaining power. The retail chain gave a deadline to all its suppliers to become RFID enabled by 2005. The vibration of this move was seen in India and software companies in India gained from this move as they got a slew of projects. RFID don't seem to be as popular in India because RFID can survive in organised retail sector and unorganised retail seems the order of the day in this country.

How RFID helped:

Wal-Mart implemented RFID in 2005 initially in seven stores.

“The company has installed RFID readers at the receiving docks at the back of the building, near the trash compactors and between the back room and the retail floor. For the cases of goods that are shipped to the stores with RFID tags, Wal-Mart records their arrival by reading the tag on each case and then reads the tags again before the cases are brought out to the sales floor. By using sales data from its existing point-of-sales system, which is not using RFID, Wal-Mart subtracts the number of cases of a particular item that are sold to customers from the number of cases brought out to the sales floor. Software monitors which items will soon be depleted from the shelves. It automatically generates a list of items that need to be picked from the back room in order to replenish the store shelves. By reading the tags on the cases that are brought out from the back room, we're able to see what items have actually been replenished[14]" says Langford, head RFID technology Wal-Mart

Supply chain is also efficiently managed with RFID technology - Once the customer picks the data, the supplier is informed about the purchase. This helps reduce BULLWHIP EFFECT. This is achieved through Wal-Mart's Retail Link extranet.

Retail employs huge manpower in In-Store Receiving, Stocking, check out and taking inventory. This can be freed with employment of RFID. It would reduce instances of Fraud, stock-outs. It improves supplier-retailer relationship, customer service & asset management - “The right products are available at the right stores at the right time”


Freightliner-Western Star Trucks is the leading heavy-duty truck manufacturer headquartered in Portland, USA. The production facilities span across united States, which produce a wide range of heavy duty construction and utility trucks, long haul highway tractors, mid range trucks for distribution and service, and emergency service apparatus and recreational haulers.

Problems faced[15]:

Freightliner was facing problems in terms of increasing costs. It thus wanted to improve efficiency and accuracy of its resources handling in order to better control manufacturing costs. It wanted to trace the movement of various parts right from inventory to the factory floor in Portland plant. It wanted to achieve a tracking system that has the following features:

* It should be automatic, so that labour costs associated with inventory handling and tracking could be reduced

* It has to be accurate and efficient, so that expensive delays caused by misdirected and erroneous parts handling could be eliminated

* It should be easily integrable with existing asset management databases, in order to further streamline inventory replenishment and resource management

* It should be scalable in order to enable enterprise-wide extension after it is proven in Portland

Integration of the existing processes into the new system was their major problem. This called for parts needed on the production line to be put into inventory totes, placed on mobile tugs and then transferred onto the shop floor. The empty totes were then returned to the warehouse. The Portland facility used approximately 750 totes of different sizes.

How RFID helped[16]:

RFID was implemented to solve the above problem. RFID tags were attached to the tugs. The tags were encoded with the GRAI format that is intended for assignment to individual objects and is the corporate standard for tote identification.

The new system identified each tote and tug with RFID tags. Tote and tug movement was then tracked as each passed through one of the two dock door portals equipped with RFID readers and antennas. A transaction receipt was then automatically generated and sent to the database on the corporate server. The receipt details the location, date and time the transaction occurred, as well as the tote and tug information. The complete parts tracking solution delivered the needed efficiency, accuracy and ability to trim labour costs.

This solution immediately paid off. It reduced labor costs significantly. Inventory pick errors reduced in number and, mis-ships and production lines started receiving timely and correct parts.

Problems faced:

Most navies in the US previously employed some type of a decoy-launching system, which had been available for many decades. The ALEX (Automated Launch of Expendables) systems were designed to counter inbound enemy anti-ship missiles. When it determined that an anti-ship missile is headed its way, based on cues from shipboard sensors, the decoys were fired accordingly. Decoys deploy material such as chaff—aluminum-coated strands of glass or other material that emit infrared waves—thus creating false targets to confuse or counter approaching ASMs, and divert them from their intended target. One problem navies faced is how to ensure the correct decoy is fired to counter a specific missile threat under battle conditions. Because there are many types of decoy cartridges, all of a similar size and shape, there is a potential for mistakes being made during the process of loading a launcher. Typically, the crew of the combat information center (CIC) room relied on data provided on paper, or over a voice link with the decoy loading crew.

How RFID helped:

The RFID technology offered ship's personnel real-time visibility into which types of decoys were deployed, as well as which barrels they were installed in, and helped ensure that the proper round is fired off, potentially in a split-second decision, while the vessel is under attack. The RFID-enabled automatic round-identification system (ARID) had been successful with the navies of some nations, prompting Lockheed Martin to provide the same feature to all of its customers throughout the world. Mounted onboard the navy's combatant vessels, the decoy launchers, provided by Lockheed Martin, were outfitted with RFID readers, and decoy cartridges were fitted with RFID tags.

Each Lockheed Martin decoy launcher (typically two, four or six launchers per combatant, depending on ship size) had a set of six tubes, allowing 12, 24 or 36 decoys per ship to be loaded and fired. Each launcher contained a low-frequency RFID reader with six channel options for redundancy. The reader was wired to six antennas, one at the base of each barrel. Naval personnel attach a small disk-shaped tag, compliant with the ISO 11784/5 standards and encoded with a unique ID number, to the bottom of each decoy cartridge. Sailors could then use a handheld interrogator to read the tag's ID number and link it to the type of decoy to which that tag is attached. When the tagged cartridge is loaded in the launch barrel, the reader identifies the tag's unique ID number and transmits that information to the ALEX system.

“To ensure the RFID system would operate properly in the rigorous environment of a vessel at sea, Lockheed Martin put the system through heavy testing”, Porter(Chief Engineer) says. “This included vibration, shock, temperature and moisture exposure, as well as testing for electromagnetic interference (EMI) with other systems on a ship. The maritime environment is very rugged, so the testing had to be quite rigorous," he adds.


picture_rfid_technology.jpgMunich Airport, the seventh busiest in Europe, served more than 15 million passengers and moved more than 100,000 metric tons of freight in the first half of 2009.

In July 2009, the airport began a test using Aero Scout's T6 GPS-enabled Wi-Fi active RFID tags to track freight dollies, and to integrate that information into its airport process management (APM) software. The goal was to enable managers to locate dollies instantly, and to know immediately which were available for use.

After getting positive results from a current pilot project employing radio frequency identification to track cargo and passenger baggage dollies as they move about its outdoor ramp, apron and gate areas, Munich Airport has decided to continue using the technology after the pilot ends in December 2009.

The test showed that tracking freight dollies prevents delays or interruptions due to misplaced or lost dollies, improves asset management—by enabling the airport to plan in advance for the dollies' use, as well as make sure they are in the right place at the time they are needed—and optimizes inventory and maintenance processes by eliminating lengthy searches for dollies that need to be repaired or inspected due to regulatory requirements. In addition, the airport will also be able to charge cargo companies more accurately, based on their use of rented dollies.

As part of its test, the airport outfitted approximately 80 freight dollies with RFID tags. In addition, it attached tags to 10 dollies for LD-2 containers, which are used to store up to 120 cubic feet of cargo, and to two baggage dollies. The tags were attached to a dolly's frame or to the hitch used to connect one dolly to another.
The battery-operated tags include GPS modules for determining a dolly's location outdoors. This GPS data is transferred to the central database by the airport's existing Wi-Fi network, which covers 15 million square meters of the facility, including the terminals, aprons, gates, hangers and runway edges.

If a dolly is inside the facility, its tag detects this, and the system switches modes to calculate the asset's location, based on the specific Wi-Fi access points that receive the tag's signal.


Southeastern Container was formed in 1982 as a privately owned company under the ownership of a group of Coca-Cola® Bottling companies. Today the company operates as a manufacturing co-op with ten manufacturing locations producing plastic bottles. Southeastern Container handles nearly 70 percent of the bottle production for Coca-Cola in the U.S. and also works with bottle manufacturers outside of the co-op. The company keeps quality and service high with a focus on continuous improvement.

Problems faced:

With roots in the southeastern U.S., Southeastern Container now has ten manufacturing facilities across the East Coast, Illinois and Wisconsin. At the company's three injection molding facilities, bottle blanks called preforms are manufactured. The plastic preforms are blown into bottles at Southeastern Container's blow-molding facilities and at bottle manufacturers outside of the co-op.

The preforms are shipped to bottle manufacturing plants in cardboard containers or existing plastic bins. Ideally, these containers are returned empty to the injection molding facilities to repeat the cycle. However, problems with this return process were costing Southeastern Container thousands of dollars each year.

Some containers are lost or damaged in transit and must be replaced. In addition, the design of the existing containers prohibits Southeastern Container from maximizing the capacity of shipping trailers, resulting in the company paying to ship “air” for each load. Finally, cardboard containers are often pre-assembled to save time, and the fully assembled containers take up warehouse floor space. In the process of shipping billions of preforms, these issues add up.

How RFID helped:

Southeastern Container planned to address these problems by replacing the existing containers with a new version— a specialized returnable plastic bin. While the new folding bins were designed to significantly reduce costs and increase efficiency, each of them is nearly ten times the cost of a cardboard container. Thus, cycle counting was introduced to track bin lifetimes against the number of cycles guaranteed by the manufacturer.

“We decided to cycle count for inventory control, traceability, and to validate bin lifetime, and we chose RFID tracking as the most effective method,” said John Underwood, Engineering Manager, Southeastern Container, Inc. “We already use barcoding extensively, and have looked at RFID on a number of occasions during the years. RFID was the right choice now because it's affordable and the technology is at a point where it can provide the reliability and accuracy we need,” he explained.

Southeastern Container worked with its partner, Decision Point systems, to architect an entire end-to-end solution to tackle this challenge. The system implementation started with a pilot RFID system for cycle counting the new bins. The solution includes Motorola fixed RFID readers, Motorola RFID antennas, Motorola RFID rugged handheld readers, and OAT Systems' Oat Asset Track software. In addition, Southeastern Container relies on the Motorola Service from the Start program for repair coverage for its Motorola RFID handheld readers. “We worked very hard to analyze the RFID tag selection with the Motorola devices to maximize successful reads for both full and empty bins,” said Gary Lemay Senior Solutions Architect for Decision Point systems. “We also had great success customizing the Oat Systems software to update both the SQL Server database and provide a web service connection to Southeastern Container's warehouse system.”

The pilot at one injection-molding facility was very successful, and Southeastern Container is proceeding with a phased rollout across its operations. When the system was fully deployed, each of the approximately 30,000 bins were permanently identified with an RFID tag and tracked using Motorola XR440 fixed RFID readers.

In addition to using the handheld RFID reader at Southeastern Container, the company also supplies them to the bin manufacturer. As bins were produced, the manufacturer captured the barcode and RFID tag information for each one, enabling Southeastern Container to link the two for warranty tracking and vendor certification.

“The pilot was very smooth, and the system has proved to be reliable. Once this was fully rolled out, the ROI improved in less than two years,” Underwood said.

The benefits included:

• Saving thousands of dollars a year in transportation costs

• Reducing container loss and ensuring traceability

• Achieving ROI within two years of full implementation

• Providing accurate data on bin lifetimes for warranty contracts

• Establishing a successful use-case with RFID technology to leverage with a wide range of future warehouse and inventory control efforts

Looking ahead, they are even planning to consider a similar RFID system for real-time tracking of outbound shipments.

Problems faced:

Saipem is an Italian engineering and construction company for subsea oil and gas production. It began seeking a solution to reduce labor hours spent searching for missing items, as well as to decrease the incidence of delays caused by equipment not arriving at the correct location at the proper time, or going missing entirely. The other challenge Saipem wanted to address was safety. The company wanted to find a system that would eliminate the need for field operators to climb onto equipment in order to visually locate a serial number on an item, which they would then have to manually record.

How RFID helped:

The firm chose an RFID solution that would enable its management to know the location of equipment on offshore sites throughout the world, as well as allow employees to safely identify equipment. The solution, installed by Milan systems integrator ACM-e, includes passive ultrahigh-frequency (UHF) tags provided by Omni-ID, which can be read from a distance of 8 meters (26 feet) or more. The tags needed to be tough, so that they could not only be read in the presence of steel and water, but also withstand temperatures ranging from -60 degrees to +50 degrees Celsius. Therefore, the tags were enclosed in an impact- and crush-resistant proprietary material specifically chosen for this application.

Saipem fastened Omni-ID Max tags to its own assets, first tagging its steel items, then placing tags on floaters and buoys. When a piece of equipment was found without a tag, operators could program a new one, inputting data regarding the item to be linked to the tag's unique ID number—such as its serial number, description and manufacturer—and then bolting or welding it to the asset. The data related to that item is stored in Saipem's own proprietary logistics support software, known as NAMASTE.

Saipem's staff used a Motorola handheld computer with a built-in RFID interrogator around the work site, to locate missing items and to determine which items the company had on site. Using the handhelds, workers were able to identity items without climbing onto piles of equipment, or the vehicles onto which they are loaded.

When a piece of equipment was needed, it was first requested from its storage location (based on inventory data maintained in the NAMASTE software), where its tag is scanned with a handheld reader to create a record of its shipment. When that item reached the shore of the drilling site, the asset was again scanned to produce a record of which items have been sent to the offshore site. Once an asset was returned to storage, that same process is carried out, with the tags being scanned as they reach shore, and once more when they are placed in one of Saipem's storage facilities. The Motorola handheld computer could store the read data, which was then uploaded to a PC at the end of a day via a USB connection.
Saipem's employees could log into the NAMASTE system to view what had been shipped out of storage or to the offshore site, and when. The system could also alert users if a requested item had not been shipped, or if a piece of equipment destined for one location was received at a different one.
The tags were also scanned when assets were certified by an inspector as safe for use, and recertified once they leave the drill site and are again inspected. In this way, the company's management knows when each piece of equipment was last certified, and can provide that record for insurance purposes, if necessary.

The RFID system went live in November 2009, with the intention of tracking 20,000 items, including offshore vessels (used to access oil drilling site), as well as cranes, drilling rigs, steel pipe, slings, shackles and buoys. Approximately 1,000 items have been tagged.

Saipem expects the RFID system to reduce the practice of acquiring excess inventory due to items ending up missing. The company also expects the system will decrease the amount of waste it generates. Without an RFID-based tracking system, assets often had to be scrapped, because it was impossible to trace how old they were, or when they had been inspected and certified.

The RFID solution, using Omni-ID tags, improved safety and security, and helped the employees better perform their jobs in a dangerous environment. That was the biggest benefit gained by Saipem.















[15] MIKOH Corp.(2007), “RFID Case Profiles”



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