RFID: An I.Q. Boost for Flexible Packaging

February 1, 2002

Today's generation of RFID smart tags go above and beyond barcoding. Can converters of flexible packaging successfully apply this technology to their manufacturing and distribution operations?

When imbedded into flexible packaging, RFID smart tags will allow converters, distributors, and retailers to "talk to" their products from the beginning to the end of the supply chain.

Emerging from the lab as a promising technology only a dozen years ago, RFID, which means radio frequency-based identification, was initially used to track livestock and follow pallets through warehouses. Today, RFID is reducing car theft and insurance premiums for as many as 100 million motorists worldwide. It is providing faster gas and convenience store purchases for millions of drivers, is tracking hundreds of millions of dollars worth of commerce each day from containerized freight yards and warehouses right to the retailer's doors, and is helping slash billions of dollars annually in theft and counterfeiting losses.

According to RFID News, the International Newsletter of the Texas Instruments RFID Group, the company's Tag-it™ 13.56 MHz smart label technology has revolutionized baggage service at London's Heathrow Airport. This system uses smart labels to track and route passenger's luggage from the airport to the hotel, freeing passengers from all of the hassles typically associated with baggage transport. Passengers can use the Internet to check on the whereabouts of their luggage at every stage and verify its final delivery. It is even planned to equip top London hotels with RFID readers that will automatically trigger a text message to the passenger's mobile phone via the Internet telling them that their baggage has safely arrived at the hotel.

RFID technology does not require line-of-sight. The chip can be hidden under the label, or in the case of flexible packaging, laminated between layers of film.

The tiny RFID tag is relatively inexpensive, anywhere from $1 to 35-cents each. What's so compelling about passive RFID technology is that the chip is not self-powered. It's the reader broadcasting a signal that charges the chip with enough energy to send back a return signal. Put a tiny battery on it and you get an active tag with 30-ft read ranges.

The point is RFID is not a potential technology; RFID already is proven technology. Smart packages ensure product security, offer product authentication, and provide consumers with added value in a range of interactive ways. The question is, How can converters of flexible packaging successfully apply this technology to their manufacturing and distribution operations?

Supply chain management

According to Keith Krenz, an RFID applications specialist and chief technology officer for VerdaSee Solutions, if one looks at the evolution of manufacturing, it has become a system of suppliers feeding suppliers who in turn are feeding the end customer. This is what manufacturers commonly refer to as the supply chain, and this is where the latest generation of RFID tags are set to make their impact felt.

The problem, he says, is that during the past 20 years we've cut the fat and leaned-out our supply chains to such a degree that there is very little inefficiency left to cut. Can we lean-out the supply chain more and reach even higher levels of performance and productivity? Krenz says we can, but not with a barcode.

"Oracle, I2 Technologies, SAP, and Manugistics all offer excellent supply chain management software, but the problem is that they are limited by the data that feeds them," he explains. "The principal data stream, not the only one, but the principal one is status of inventory or work in process within the supply chain. So, the ability to perform effective supply chain management, the ability to further lean out the supply chain is becoming directly dependent upon the accuracy and timeliness of the status of process materials in the supply chain."

Krenz says that barcoding is the most common data gathering system used today, but it's really designed for portal applications. As an item comes in and is received into a warehouse, or is shipped from the end of a production line, or goes from Department A within a plant to Department B, it passes through some type of portal. At this portal stands a human being who manually reads the barcode affixed to whatever is received and electronically reports, for example, that Box A has gone into Area X.

Bob Moroz, president of R.Moroz Ltd., an auto ID solutions provider and systems integrator, says that RFID technology does not require line-of-sight. The chip can be hidden, or in the case of flexible packaging, laminated between layers of the structure for protection and stealth.

"You can read multiple tags at once without seeing them. If I have a pallet with goods on it, I can read the contents of that pallet without having to remove the shrink wrap and manually touch each individual product on that pallet with the barcode reader," Moroz says.

Conversely, Krenz says that the manual process requires barcodes and portals, plus it requires human intervention. "Even after all of this, it only tells me the last time the item passed through the portal. It doesn't tell me, for example, where within Department A the item is. All we know is that it's in Department A somewhere, and Department A can be a 500,000 sq./ft warehouse.

"For me to use supply chain management effectively, to lean the process out even more, not only do I need to know it is in Department A, but before I can schedule it, I need to know exactly where in Department A it is. If I don't know where it is it's very difficult to schedule it. When it come to further leaning out the supply chain, not knowing exactly where the specific item is at any given time creates vast blind spots in the manufacturing supply chain," he says.

Removing the blind spots

RFID technology allows converters to automate, to take the human factor out of the portal environment. Krenz says that the human factor is a source of significant error rates.

"Passive RFID allows you to at least get rid of, or dramatically reduce, operator involvement and allows you to automate the portal process effectively. Secondly, it can reduce the total time it takes to process material going though a shipping or receiving portal."

Krenz says that the next step is active technology, powered RFID tags. Those tags, for all practical purposes, are on all the time, beaconing the position of the asset, or work in process, continuously.

"Either form of RFID will allow you to dramatically reduce the blind spots within the supply chain. RFID brings great visibility and great clarity to supply chains," Krenz says. "Visibility of the assets' status, in a way that doesn't require human intervention, dramatically increases supply chain accuracy. This is really what RFID is beginning to bring to the manufacturing world. You're already seeing RFID solutions specifically built for the automotive industry, specifically built for the health care delivery industry. Why couldn't there be an RFID solution developed specifically for the flexible package converting industry as well?"

Cost and practicality

One of the impediments to the wholesale adoption of RFID technology is cost. But this has not stopped the purveyors of this technology from researching and developing newer, better, and less expensive next generations.

An article in a recent issue of Food & Drug Packaging explores smart labels equipped with RFID tags such as Motorola's BiStatix or Omron's V720 RFID. These ultra-thin tags are designed to be sandwiched between layers of protective plastic or adhesive film.

The inlays, the article explains, are available in a range of sizes and shapes. The Omron V720 can be as thin as 50 microns at the antenna and 270 microns at the chip, adding minimal thickness when embedded on a package.

Bar codes must be read one at a time. A pallet-load of product labeled with RFID smart tags can be read in a second.

The BiStatix tag contains a silicon chip and an antenna. But, instead of using fragile copper cable or etched metal for the antenna, BiStatix uses a printed conductive-ink surface that can absorb information to power up the silicon memory chip. This bodes well for inline printing of tags right on the package at high speeds sometime in the near future. BiStatix tags allow the chips to be affixed to almost any non-conductive paper-based carrier. And labels equipped with the tags can be made to conform to almost any shaped container, including plastic bags or bottles.

Compared to bar codes or other RFID information carriers with brittle antennas, BiStatix or V720 tags are flexible and remain readable even if they become creased, crumpled, or damaged.

Moroz says that RFID tags, being a chip-based technology, are going to get smaller, faster, and become more powerful with more memory, not unlike the evolution of the personal computer. "In six to 12 months I expect to see a more powerful RFID tag, and soon after that there will be another one that's even better," he predicts. "We're already seeing chips that are a lot smaller. A smaller chip is not only easier to inset into a package or onto a label, but a smaller chip requires less power to charge up. The next generation of RFID chips will feature longer reading distances, more memory, and, if they have lower power demands, then they'll be faster too."

There is no doubt that the chips are getting smaller, faster, and less expensive. And it's also clear that they can be integrated into flexible packaging in an automated manner. Unfortunately, for those who expect to place a tiny RFID chip onto every package of cookies or potato chips, the price is still too high. Although this cost is already down dramatically from just a few years ago it is still too high for the majority of low cost flexible packaging applications.

Krenz says that the growth and proliferation of RFID into more and more industries will take the cost of RFID in terms of a total packaged solution and drive it down dramatically. But before that can happen, RFID technology will have to take a quantum leap into the manufacturing mainstream.

"In the real world, technology for the sake of technology doesn't go very far," explains Krenz. "On the other hand, technology that solves business problems thus generating good ROI has limitless growth potential. The evolution of RFID, I believe, will follow the evolution of most technology-based solutions. The consumer will not drive it; it will be driven by industry. As industry begins to adopt it, RFID will become less costly for two reasons: First, the learning curve. We'll learn how to do it better and less expensively. And secondly, production volumes will increase. Over time we'll drive it down to the consumer level."

Spread out the cost

RFID brings so many benefits to supply chain management that it's really a shame to have to wait for the cost of the tags to come down. A solution is to spread the cost of the tag across the entire supply and distribution chain.

Texas Instruments, a pioneer in RFID technology, offers a variety of supply chain management solutions.

Tres Wiley, manager of strategic marketing in the Texas Instruments RFID Systems Group, explains: "The problem that RFID has now is that the tag is relatively expensive relative to the value that any one user can extract from it. But, if I were to put an RFID tag on an item as a manufacturer, and then allowed that same tag to be used by the distribution channel, and then reused by the retail channel, and perhaps even by the service channel, it could very well justify the cost of the tag. When subsequent value-added elements in the chain each pay for a portion of the technology then you would see tagging reach its full potential, then you would get the massive volumes needed to drive the cost down. So far what you've seen from RFID is spot solutions for short portions of the supply chain, and that's limiting the use of the technology."

Moroz reminds us that RFID is a chip-based technology. Not only can you read from it, but, unlike a barcode, you can also write to it as well. You can segment the chip's memory into different areas. Each user/sharer of the chip can have his own space on the chip to store the information that's critical to his own process.

If you so choose, all of the information can be accessible, or just some of it, and some of the information may require a password to access.

Other emerging RFID intelligent labels have the capacity to read multiple frequencies as unique identities and can be used in support of various identification efforts. Each prescribed frequency represents a specific sector of product info-such as product type, shelf date, manufacture date, and product authentication. At different steps in the supply chain, additional data can be written to the tag. So by the time it gets to the end of the line, a dossier, as complete as it needs to be, accompanies that item.

Put a tag on the inside of the core of a roll of film and a converter will be able to monitor and record its history as subsequent layers of value are added to it. Who the customer is, what kind of ink was used, who the operator was, the date it was manufactured, materials used, humidity, temperature, whatever information you think is necessary can be written to that tiny tag. The RFID tag brings a lot of value, and when you spread the incremental cost throughout the entire supply chain it makes a lot of sense.

In this example if you add up the costs of the substrate, treating, coating, printing, slitting, and then add to that time and labor, it becomes apparent that there is a lot of value-added to that roll. If it takes a 35-cent tag to streamline and improve supply chain management, perhaps RFID is a valid investment.

"There are a lot of applications where RFID makes sense," explains Bill Allen, e-marketing manager, Texas Instruments. "But there are also applications where RFID doesn't make any sense at all. You're not going to put a 50-cent tag on a can of beans, but you might consider putting it on the pallet used to ship 10,000 of these cans."

Making sense of the future

Moroz is convinced that we're going to see that tiny, inexpensive chip very shortly. "We're going to see a chip that is easy to embed into any surface because the thickness is getting smaller, and new manufacturing techniques are going to make them more durable and suitable for virtually any environment.

"And I believe the price will go down," he continues. "I don't think we'll see a one-cent chip, or a 10-cent chip, or even a 20-cent chip in the foreseeable future. But I think it's conceivable that we will, in the future, have an inexpensive chip. It may not have all the power of some of the RF technology, but it will be more than enough for product identification purposes."

Krenz says that what he sees is the need to make the tag look like an on-all-the-time, or smart, bar code.

"It's a crude way to say it but the cheapest tag you could buy today, whether its active or passive, is one that simply has a unique serial number embedded in the silicon of the chip," he explains.

Moroz believes that the future for RFID and flexible packaging may be a chipless technology. Today, every RFID chip already comes with an embedded identification capability, a 16-bit character that makes that chip unique from any other chip. The rest of the memory, depending on the size is available for whatever other information you want. Chipless technology, on the other hand, doesn't have the ability to store vast quantities of information about the product and the manufacturing process. In fact, all it can do is give the individual package its own unique product ID number. But the key benefit for chipless is that now the price of the individual tag is low enough that we can consider implanting a chip into each and every flexible package. The more information you have to write to the tag, the more memory you'll need and the more expensive it's going to be.

"With chipless technology we're looking at prices that are probably heading towards the penny apiece territory," says Moroz.

The next generation of RFID tags will
feature longer reading distances,
more memory, and faster speeds.

Is an ID number enough?

Krenz says that a unique ID number is all the information a flexible package needs to carry and further states that rarely is there a need to write data to the typical tag, especially a tag that's placed on an inexpensive commodity item.

The Massachusetts Institute of Technology is developing a global electronic inventory system that will catalog virtually every available product in the world. Wiley says that in MIT's vision of the future you won't need memory on the tag if you have access to a central database via the Internet.

"The reader will scan the ID number from the bag of chips, and this number is unique, there is no other number like it. With that number you would go to a central database, and that database, not the tag, would tell you things such as who that product was made for, where it was made, when was it shipped, and who bought it. You can even have the name of the slitter operator on that database. In fact, you can put any kind of information on there that you consider relevant to your process. All of this would obviate the need for memory on the tag. I suspect that MIT is on the right track. I think manufacturers will ultimately align with that vision."

Krenz has a similar vision and says that the tag of the future will have very little data on it. "The reader will interrogate the tiny tag and it will say 'I'm tag number 5212,' and the reader will go to the Internet and say 'OK, tell me about tag 5212.' The database is where all the collected data on its manufacture and distribution will come from, not the tag."

In the future, and by the looks of things it very well may be the near future, each flexible package will have a tiny RFID chip with nothing more than an ID number on it. Through that ID number you will be able to access a whole world of data about that package, and you will be able to access that data from anywhere in the world. Supply chain management may never be the same again.