Imagine a distribution warehouse where shipping and receiving cases of merchandise does not involve a tightly monitored inventory department. Where pallets of products are loaded and unloaded without concern for accountability. Where high efficiency is no longer a goal, but a familiar routine.
Not only is this scenario possible, it is reality with the technology of radio frequency identification (RFID).
Miles Data Technologies, Pewaukee, is one local company already implementing RFID for Wisconsin and Midwest manufacturers.
With the technology of RFID, manufacturing and retail industries are able to track products and merchandise through a data chip, an antenna (termed a transponder) and a receiver (interrogator), instead of or complementary to the traditional manual scanner and bar code system.
Miles Data Technologies helps companies with inventory management and the shipping/receiving process as a systems integrator, according to Robert Ladd, president of Miles Data Technologies.
Currently, major corporations are jumping on board to reduce the occurrence of human error, the troubles of lost merchandise and to increase accuracy and security.
Miles Data consults with companies considering RFID, implements a system that fits the client and provides on-site service after the implementation.
"We have found ourselves going out to manufacturers for presentations on RFID to determine if the company could use the program in certain areas of its warehouse," Ladd said. "There is definitely an awareness in the marketplace about RFID that is a concern for companies investing in bar codes."
Miles Data Technologies has been educating companies on bar code technology and laser scanning since it was started by Ladd’s father-in-law, Bill Miles, in 1982, as William Miles & Associates, Vernon Hills, Ill. Ladd joined the company in 1992 and opened the Pewaukee office as Miles Data Technologies in 2000.
"We expanded from educating customers on bar code technology and laser scanning to the thermal high-speed printing of bar codes," said Ladd. "As part of our business changes from bar codes to RFID technology, we are following a similar path with education and then encoding data onto RFID tags."
Miles Data also tries to predict potential problems with RFID and create programs to prevent them.
Gary Jahnke, vice president of Miles Data, directs a satellite office in Appleton, where an RFID testing lab is located along with sales and distribution. The lab tests systems Miles Data has created, the labeling and printing process and the durability of the programs and technology.
As the premier partner of Zebra Technologies, Vernon Hills, Ill., a bar code and RFID printing company, Miles Data Technologies encodes RFID antennas on bar codes and sells Zebra Technologies equipment.
Ladd does not think bar codes will be completely replaced by RFID labels and tags. However, in terms of efficiency and product inventory, a warehouse could have a fixed interrogator, or reading center, on a storage rack, and every item on the rack could be scanned at once.
If placed on every rack in the warehouse, Ladd said, a company would be able to take instant inventory.
"The next step is to have bar code and RFID technology coexist. For instance, having a scanner that can read both a bar code label and an RFID tag, which is already being produced by technology companies," said Ladd.
According to Jahnke, the difference between an RFID tag and a bar code is basically a technological enhancement.
"With RFID tags, there is no need for a line of sight or specific orientation. Where bar codes need to be positioned to be scanned, RFID tags can always be read and simultaneously processed," said Jahnke. "We can now read in whole pallets of products by driving under a gate antenna. RFID also has a large data capacity that can read and write."
According to Ladd, bar codes can contain between 8 and 30 characters, while RFID can contain hundreds, even thousands, of bits of data.
"Now a product can contain information like the price, batch number, even weight," said Ladd.
Both Ladd and Jahnke said the main reason companies are hesitant to invest in RFID is the cost. According to Ladd, a bar code can cost from 1 cent to 3 cents to make. RFID is printed virtually in the same process, but costs 30 cents to 50 cents, plus the price of a new high-tech printing machine.
"It is expensive now, but the more RFID tags are produced, the more the price will go down," said Jahnke. "When product manufacturers were first asked to use bar codes, they said they would because they found efficiencies and embraced the idea in work-in-progress and chipping/receiving. Once they are exposed to the RFID technology, they will become comfortable and able to employ RFID into different areas of their business."
Ladd said RFID labels and tags are being driven through the retail and manufacturing markets in the same way bar codes were, and as the price of production drops from 50 cents to 5 cents, consumers will see it on more items.
Companies are beginning to see RFID as a smart investment, Ladd said. Miles Data has experienced 30% growth in revenues each year for the past two years, and in 2004 he expects the firm’s annual revenue to exceed $6 million.
"We are seeing a very similar evolution with bar codes and RFID," said Ladd. "There is always hesitation to jump in and implement something new when it comes at a cost and you are not quite sure if it will survive. But we know that the technology is solid, simple and proven. We are not skeptical. The industry is just waiting for someone to go first."
Feb. 20, 2004 Small Business Times, Milwaukee
