Life in the RFID Industry Is Getting Better

As we head into mid-2006, we embrace the many positive changes in the smart label industry. The ratification of the Class 1 Generation 2 ultra-high frequency (UHF) protocol has provided a long-awaited UHF stateside standard. As the EPCglobal organization is progressing to make this a global standard, there are now only a few countries left that have yet to adopt this standard.

In the past year, major progress has been made to overcome the RFID issues, which fluids and metals have caused. This will accelerate the ability to implement RFID into these products and increase the demand for high volumes of smart labels.

High yields of high frequency (HF) transponders have been delivered for years. However, high yields of UHF tranponders are a result of the past 18 months. This is now making the converting and “clean-up” process easier for label converters.

Since last fall, huge leaps have been made to reduce the cost of manufacturing smart labels, tickets, and cards. With the transponder being the most costly component of a smart product, the 66 percent reduction in price of UHF tranponders over the last nine months has opened the doors to wider-spread use of smart labels, tickets, and cards. Furthermore, with pressure-sensitive transponders having been typically more expensive than dry, today some transponder manufacturers are offering both for the same price. We all hope that this will remain the case over time for it takes the tasks of applying adhesion and cutting the transponders from one another away from the converter.

Item-level tagging is being discussed more than ever. Even here, a lack of standards and lack of aggreement between parties is still apparent. During the recent Smart Label Summit in Miami, a major ­retailer stated that it has chosen the path to place UHF smart labels on individual items. According to the company, it would not make sense to introduce yet another type of smart label into the chain. At the same time, the pharmaceutical industry’s implementation of HF smart labels onto individual items is well under way. Ideally, these industries would come to an agreement for item-level tagging. This will take time as each design has its own advantages and disadvantages.

The use of smart tickets in industries ranging from transportation to sporting events is exploding. A converter commited to producing smart labels should definitely look into tapping these markets. Just think about the potential when every professional game ticket, every train ticket, and ski lift ticket, just to name a few, will need to be replenished on a regular basis. This makes for a huge consumable.

So let’s talk about the tools which a converter needs to get into this market. Every converter is concerned about the ROI he will be getting on any new equipment. Although many factors play a role in this calculation, one important factor is the assurance that today’s capital investment won’t be next year’s boat anchor. This can be avoided by purchasing equipment with the flexibility to accommodate today’s conventional smart product designs and the modularity to accommodate future smart product designs.

In closing, new applications continue to be discovered for smart labels, tickets, and cards. This is due to the advantages of RFID, the declining cost to produce these products, the ability to overcome problems caused by difficult materials such as metals and fluids, and the improved performance of the transponders used in smart products.