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RFID: Are These New Tracking Tags the Next Big Thing?

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About a year ago, when occasional comments about Radio FrequencyIDentification began to appear, I had a little trouble working out the meaning of the acronym. Then I came to understand it and its supply chain uses at a general level: this is a tagging and identification technology; Wal-Mart was going to require that their suppliers deploy it by 2005; Gillette was going to put RFID tags on packages of razor blades in a pilot project; RFID was still too expensive for the book industry, but . . . in a few years, would it become the Next Big Thing?

It could happen.

As you may have read, the Gillette pilot was put off due to fears about privacy. (In this era of the Patriot Act and the gentle attorney general, who wants to walk around with little gizmos that are silently beaming what we’re reading or buying?) But technological solutions to privacy problems are already in development, and privacy or no, the RFID train has already left the station.

Like other technologies–such as automobiles, television, or radio itself–RFID has taken three or four decades to come into its own. The combination of computer chips and radio broadcasting technologies, which has been in use since World War II, makes it possible to implant “information + communication” on an individual physical thing, like a submarine or airplane (or book) and to broadcast “what” the thing is to “reading devices” (namely, radio broadcaster/receivers)stationed strategically in a factory or harbor (or bookstore) so that you also know “where” the thing is and, by deduction, what’s happening to it. Originally, RFID was a secret technique used to help pierce the “fog of war” by distinguishing whether air or naval craft were friend or foe.

What has changed, of course, is the degree of miniaturization (astounding), plus computer and memory power (even more astounding) and the cost of production (dropping). Currently an RFID “tag”–a computer chip plus tiny antenna–costs about 50 cents. If you have an E-ZPass or any other windshield device that allows you to pay your highway toll as you roll by the booth, you are using RFID. What’s happening is that a little chip in that plastic container is being “read” by a mechanismat the booth which is passing the information along to the transit authority computer which links it to your account, etc., etc.

A Whole New Approach to Product Identification

According to James Surowiecki, writing in the September 8, 2003, issue of The New Yorker, the first bar code ever used in America was on a package of gum sold in Ohio in 1974. (The gum is in the Smithsonian. You could look it up.) Bar codes are now universal; some 5 billion are scanned every day. But there are problems with bar codes, useful as they are. Number one is line of sight. The code has to be positioned in such a way that a physical reading device can see it unobstructed. Moreover, every bottle of Coke, or every copy of Moby Dick published by Whale Publishing Company in 2003, has the same bar code, or ISBN, as every other bottle, or copy, no matter how many digits are used for the identifier.

Enter RFID. What if it’s a radio signal, not an optically read code, and it will go through walls, cardboard, or clothing? What if the amount of information you can put on the chip is so large that you can identify each individual carton, bottle, book–every single one? What if each of these tiny, flexible little chips with its little antenna can broadcast by itself without being activated by a reader? What if you could send all the data globally thanks to the Internet (which of course you can)? And what if each chip costs a nickel or less?

Now it gets interesting.

With computer systems managing and analyzing the data they pass along, you could know where any individual copy of one of your books is in the value chain at any time, in real time, or where all your books are, all the time–individually and/or collectively, slice and dice as you will, by title, by author, by geography, by location–in the warehouse, in the store, on the truck, in a thief’s bookbag, back in the store as a return, at point of sale, being checked out of a library, sitting on the library shelf beaming that it has been misfiled, sitting on the bookstore shelf as the last copy and letting the retailer know to order more, the distributor know to send more, the publisher know to print more, the editor know to acquire more, the author know to write more.

And if all that hasn’t made you too dizzy, think about the automatic advisories that can be generated as pallets or boxes or individual books pass key spots in the distribution chain or “fall off the truck.”

In sum, RFID could raise efficiency levels within the supply chain so much that it would change the economics of the business.

The Devil Is in the Details

As always, though, the devil lurks in the details. Publishers who were burned a decade ago by hype about the market for CD-ROMs and just a few years ago by hype about the speed at which electronic content would enter the marketplace would be wise to be cautious.

Speed bumps on the meandering road of technology innovation include, in this case:

  • the price of individual tags, which may be one of the smaller problems
  • creating and integrating the software needed to manage an RFID system into the many different systems currently used by publishers, manufacturers, distributors, and retailers
  • managing and analyzing the deluge of data that will stream out from all those moving skids, cartons, and books.


In a Library Near You

Complex as RFID problems are, the library segment in the publishing value chain is already enjoying the benefits of the technology. Because books enter and exit their establishments time and again over a period of years (unlike a one-time retail transaction), a small but growing number of libraries in the United States and Canada have already implemented RFID systems with success, thanks to vendors like VTLS, a solutions provider for library automation, resource-sharing networks, and digital libraries based in Blacksburg, Virginia.

Patrons can check out or return a batch of books all at once, just by carrying their books past the reader post, or by dropping the books down a reader-enabled return chute. Inventory management means simply passing a wand along the shelf, and some systems allow identification of shelving mistakes. The tags also activate a warning if somebody tries to remove a volume improperly.

Not surprisingly, major book retail chains are looking at RFID carefully, at least for use with supply-chain trading partners, and even publishers are beginning to open one eye. In the past six months, RFID has appeared on the radar screens of the major publishing associations.

Coming Soon from Your Buyers?

While libraries will continue to adopt RFID, it is going to be at least five years before tags are used on individual books for sale to consumers in any appreciable number. However, it’s likely that they will be used within the next couple of years on book pallets or cartons. Because the price point for tags and readers is already reasonable for this use, it is now a reality in many industries, supported by multimillion-dollar service companies. CHEP, for instance, provides 200 million tag-enabled reusable pallets for a huge range of retail operations in 38 countries (check out www.chep.com).

The installation of “portal readers” at key places in warehouses and shipping docks to monitor the arrival and departure of pallets or boxes of goods is far less onerous than full deployment of tags on individual products in retail establishments like bookstores–and it raises no privacy issues. But because RFID may be a reality at the consumer level by the end of the decade, publishers large and small need to begin now to understand how RFID technology works, and to put it into their longer-range strategic plans. If you have seen the television ads depicting (without explaining) walk-out checkout in supermarkets, you can begin to understand how RFID use may become a question of do or die, use it or lose your position in the marketplace.

Cutting Edge RFID Info

Those who are interested in delving further into RFID are encouraged to visit the excellent Web site put up by the Auto-ID Center at MIT (www.autoidcenter.org), an association of about 100 major companies and universities that is taking the lead in solving the problems noted above. And those who already have a deeper interest in this subject may want to subscribe to the free weekly online RFID Journal (www.rfidjournal.com).

James Lichtenberg, chair of the Book Industry Study Group’s New Technology Interest Group, has worked with and written about the publishing industry for almost 15 years. He is a regular contributor on technology to industry publications, and his consulting firm. Lightspeed, LLC, specializes in business development, marketing, and e-business strategy in publishing and the corporate world. E-mail him at jameslichtenberg@att.net.

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