Section 6.4. Disadvantages of RFID and Bar Codes

6.4. Disadvantages of RFID and Bar Codes

The major disadvantages of both RFID and bar codes are as follows :

• Presence of obstacles . A bar code reader cannot read a bar code if there is any obstacle between the reader and the bar code. An RFID reader, depending on its operating frequencies and other factors, such as power and duty cycle, might not be able to read a tag if there are any RF- opaque obstacles, such as metal, or RF-absorbent material, such as water present between the reader and the tag.

• Presence of moisture . For bar code readers, the light beam might be refracted by water particles suspended in the atmosphere, resulting in focus distortion. For RFID readers operating in UHF and microwave frequencies, water particles suspended in the atmosphere might absorb RF energy, resulting in insufficient energy reaching the tags for proper data transfer.

• Speed . If the scan rate of a reader is exceeded by the speed of movement of the bar codes, a loss of reading accuracy, together with failure to read a bar code, might result. For RFID readers, if the speed of the tag is so great that the tag has insufficient time to optionally energize itself properly and transmit data back to the reader, a loss of reading accuracy, together with failure to read a tag, might result.

• Extrinsic identification schemes . A bar code or an RFID has to be applied externally to an object; these are not part of the object's physical characteristics. Therefore, if such an object is mislabeled or "mis-tagged," the object identity is in jeopardy. However, perhaps intrinsic properties could be used to uniquely identify an object. For example, a fingerprint or a retinal scan of a person can uniquely identify this person without any need to put an external identification scheme, such as a bar code or RFID tag, on the person.

You are now ready to explore what can be called the most-hyped potential of RFID in the media.

6.5. RFID Will Replace Bar Codes Soon

The short advice is this: "Forget it." Read on to understand why. For RFID to "replace bar codes soon," it must overcome the following hurdles "soon":

• Tag any item that a bar code can tag today . Such items include almost every type of physical merchandise in existence in the world economy. To do this at an acceptable cost, the following four hurdles must be overcome:

  - Cheap hardware with tags costing less than 5 . The profit margin of some of industries is razor thin and prone to cutthroat competition. Any extra cost that does not go toward the bottom line is rarely justified.
  
  

  - No consumer issues . The consumer must accept the use of RFID to tag every item that bar codes can today.
  
  

  - Technical advancement to satisfactorily tag any possible item . RFID is an emerging technology, so the capabilities of tags, readers, and antennas are all undergoing rapid changes. At this point, the capabilities are not sufficient to tag every item to which a bar code can be affixed.
  
  

  - Worldwide acceptance of common frequencies of operation . When common frequency bands for RFID operations are standardized, deployment of RFID implementations will definitely speed up. Even if these hurdles are overcome, there is still the following last hurdle , which might be the most daunting of all.
  
  

• Replace a tremendously large base of working bar code solutions . Even if RFID resolves all the preceding issues to become at par with bar codes, why should a business invest money to replace a perfectly acceptable and working bar code solution?

These hurdles are now discussed in detail in the following sections.

6.5.1. Tag Any Item That a Bar Code Can Tag Today

Clearly, if RFID is to dislodge bar code from its current status as "uber tag," it needs to tag any item that a bar code can today. This issue has three main components: economic, technical, and social. Each of these three components must be resolved before RFID can level the playing field with bar code. The next two subsections discuss the economic and social components, respectively, followed by a technical component discussion in the following two subsections.

6.5.1.1. Cheap Hardware with Tags Costing Less Than 5

To successfully par with bar codes, RFID tags need to be cost effective. The cost of producing a bar code is next to free, but the cost of an RFID tag is very expensive today when it comes to tagging low value items for which the profit margins are low. Manufacturers and retailers want to maximize their profits and any additional overhead that does not help their bottom line are almost always ruled out. Thus, for an item for which the profit margin is 10 it does not make sense to put a 20 UHF RFID tag on it, which is what an average UHF RFID tag approximately costs when purchased in large volume. As a result, the tags have to be as cheap as possible. There seems to be common consensus today that for tagging individual consumer items, the price of a tag has to fall below 5 and for several other items, the price has to go under 1 . At the same time, the price of RFID readers and antennas have to come down to below $100. These are tall orders considering the manufacturing process and cost of producing current RFID hardware. For example, in order to produce an RFID tag, several manufacturing steps are necessary, each of which adds a fixed overhead to the cost of manufacturing and hence to the final cost of the tag (see Appendix B, "Manufacturing Overview"). The tag cost can be lowered in one of two ways. The first option is to eliminate some of the processing steps, resulting in more defective (but cheaper) tags (which might or might not be acceptable to the business). The second option is to invent new manufacturing processes that consolidate a number of the steps, thus bringing down the cost while maintaining the tag quality or even improving it. This second option seems to hold the most promise. When will 5 and 1 tags appear on the market? The industry speculates that such tags are about 5 to 10 years away from being available commercially.

Tag costs do not make exciting business models for manufacturers. To build a $200 million fabrication plant making 1 billion tags at 1 each, for example, it will take 20 years to realize return on investment (ROI), assuming 0 inflation! When will sub-$100 readers and antennas appear on the market? There is no current estimate on the readers and antennas. Although rapid advances are being made in these areas, it seems safe to speculate that these are at least 3 to 5 years away from being available commercially. Again, however, the price of the tags also must come down to an acceptable level, not just the readers and antennas. Therefore, it seems that RFID still has about 5 to 10 years to be at par with bar codes in terms of cost.

6.5.1.2. No Consumer Issues

The current ongoing debates, protests of privacy-rights groups, and attempts by legislators to impose legal regulations seem just starting to take shape with regard to the use of RFID to tag individual consumer items. A consensus between the technology backers and the privacy-rights supporters does not seem near. It could be years before any conclusive decisions are reached; RFID tagging of consumer items might take a back seat until then. Therefore, even though the technology might provide sufficiently cheap tags to tag individual items five years from now, this fact alone does not imply that RFID item-level tagging will be actually put into practice at that point.

Because of the regulations and standards that might apply to RFID in the future, RFID might be used just to tag certain types of items, with bar codes used to tag the remaining items. RFID then loses its battle with bar code right there.

6.5.1.3. Technical Advancement to Satisfactorily Tag Any Possible Item

RFID technology is still in its infancy when it comes to tagging different item types. The RF properties of an item, its physical characteristics (such as shape), operations environments, and so forth all have important bearings on tag size and properties. A wide array of tags with various characteristics might be needed to satisfy these requirements. This field is experiencing fast improvements, but even so, tag technology is far from reaching a mature level (which might, in fact, take another 10 years or more).

However, bar code technology and its adoption rate is not going to stand still for the next 5 to 10 years. For example, the UCC (the overseer of the most popular bar code, UPC) has mandated through its 2005 Sunrise program in 1997 that by January 1, 2005, all U.S. and Canadian businesses must be able to scan and process EAN-8 and EAN-13, besides 12-digit UPC symbols, at the point of sale. This program is aimed at promoting global commerce and facilitating commerce efficiency. While not every company in the U.S. and Canada complied with this mandate , it shows that the bar code industry is quite active and innovative.

6.5.1.4. Worldwide Acceptance of Common Frequencies of Operation

A common worldwide standard of RFID frequency (UHF in particular) will act as an accelerator of acceptance of the technology. With this, a single RFID system implemented for a particular business application can be deployed worldwide without any costly changes to suit country- specific regulations. This standardization will reduce the maintenance efforts of the solutions and might allow the solutions to be standardized for a particular application. RFID solutions, which can then be bought virtually off the shelf and put into use in any part of the world, will act as a strong catalyst for acceptance. Note that to bypass this issue, vendors are bringing out readers that can operate on multiple frequencies, which might offer a solution to this issue.

However, such a common, worldwide acceptance, assuming it happens, is years away. Ten years could be insufficient for this purpose because the technology has to be mature enough in the first place to convince world governments that it makes sense to invest their resources on an effort.

6.5.2. Replace a Tremendously Large Base of Working Bar Code Solutions

So far, this chapter has discussed how RFID technology can overcome its acceptance hurdles. Assuming that RFID does just that, however, which is an extremely big assumption, does it guarantee a replacement of bar codes? Well, not really! The reason is chiefly economicalwhat are the business drivers to shut down perfectly working bar code solutions used by an extremely wide range of large, medium, and small businesses and replace these with RFID? When the item moves from large manufacturers to retailers to small businesses, the chances of gaining huge productivity gains seem far away, because the volume of handled goods also decreases substantially (resulting in a tighter room for improvement). In addition, the cost of implementation and maintenance of an RFID system has to be less than the maintenance cost of the existing bar code systems unless strong business drivers exist to offset the cost difference with productivity gains. That RFID can do this for every existing bar code system in the world is difficult, if not impossible , to anticipate.

From the analysis in this chapter, you can understand that there is little possibility of RFID replacing bar codes completely in the long run, let alone "soon." Both RFID and bar codes will coexist as complementary technologies for years to come. This conclusion might lead you to think that RFID is not a useful technology after all. Don't despair yet, however; the next section will convince you otherwise .