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Smart Packaging: Riding the tidal wave of the RFID deadline

With the January 1, 2005, radio frequency identification (RFID) compliance deadlines looming, when retail giant Wal-Mart asks its suppliers to jump, they better ask, "How high?" But does a packager or a supplier simply "slap and ship" on an RFID tag as is the standard application protocol to meet the basic requirements, or move forward with a comprehensive RFID solution for their supply chain?

While ever-powerful Wal-Mart is mandating that cases and pallets coming from its Top 100 Suppliers adopt RFID chips by the January 2005, deadline, and that the rest of its suppliers comply by January 2006, other consumer packaged goods companies such as Procter & Gamble and Albertsons, and organizations like the U.S. Department of Defense are following suit, also committing to the use of RFID technology in open supply chains. In February, Target, the fourth-largest U.S. retailer, implemented a supplier RFID mandate plan, continuing the worldwide RFID supply chain adoption push and furthering RFID's move into supply chain initiatives. It also may be a signal to consumer packaged goods suppliers that are reconsidering short-term compliance efforts in favor of other alternatives or more comprehensive approaches, according to some industry consultants. Thus, packager and supplier goals will likely move quickly from pilot (or predeployment) RFID programs to actual deployments.

At breakneck speed, RFID is becoming the fastest-growing technology in the automatic data collection industry. But at what cost? And with what sacrifices to privacy? After all, while bar codes are scanned up until a product is purchased at the store level, that's where the tracking usually ends. Not with RFID tags. While some manufacturers may tag just their packaging, others could tag the products themselves. Could the tag and its ability to track the product remain with the product forever?

Partnerships are critical
So how do packagers' stack up at this point in determining their RFID/electronic product code (EPC) implementation strategies? Will they be able to comply with Wal-Mart's requests that all of its incoming pallets be tagged and that all of the tags be readable without slowing existing operations?

"Many companies will need to leverage partnerships," says Matt Ream, senior product manager for RFID Systems, at RFID technology/standards developer and bar-code labeling equipment supplier Zebra Technologies, during an interview at a recent RFID conference. "There will be a lot of collaborations. And packaging itself will change in order to address issues with tags, metal and moisture. Some tags will also have to be specially designed to prevent problems with particular products and packages."

Ream, and his colleague Christopher Hook, director of RFID market development at Zebra, both indicate that because RFID is a very enabling technology, when considering an RFID application, companies should establish clear objectives when matching the technology to their operations. "It's good to review how the business is done today and determine exactly what's needed before laying out a future program," Hook says. "Try to determine what you're trying to do with this technology, and remember that attention to detail is crucial. It's also best try to understand the business's issues and determine if RFID would really be a benefit to the business [for more details, visit Zebra Technologies at www.zebra.com]."

One recently implemented RFID program, headed by Steve Van Fleet, International Paper's director of Smart Packaging, has been a successful venture. Discussing the business case and implementation program, which began in June 2003, Van Fleet says during the same conference that IP deployed an RFID system at the shipping level for massive paper rolls within its Texarkana paper manufacturing facility. Quickly reaping a 30-percent return on its investment in benefits, the system may be deployed at other IP warehouses, Van Fleet says, adding that the three-year deployment experience required education within and outside the company.

The program started out experiencing some problems in methodology, he says. "But we kept our eyes on the ball. It's a different way to run a warehouse," Van Fleet says. Today, the facility has a forklift-based roll-tracking system that eliminates the need for portals and dock doors and can adjust process and inventory rules without changing or moving stationary RFID readers. It also locates 100 percent of the rolls produced and can read a tag through about a 75-in.-dia roll measuring 115 in. wide. The plant also sees no mortality rate on RFID tags and can identify and report unique roll identifications within five seconds.

"One important factor we learned was that these systems (and components such as antennas) need to be very robust in order to hold up to the everyday wear and tear in the plant," says Van Fleet. "Make sure the RFID system you choose will work for you first before getting too heavily involved, and try to keep things as simple as possible."

More information is available:
RFID technology: Zebra Technologies, 800/423-0422. www.zebra.com. Circle No. 219.

RFID-enabled warehouse: International Paper, 203/541-8000. www.internationalpaper.com. Circle No. 220.

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