By Eileen Yu, CNETAsia
April 14, 2005

Where should the tag be placed? Should it go on top or on the side of the box? Is it 'noisy' enough in the trial lab? Should there be more forklifts moving around the test site? Can this box be made of paper instead of metal?

Strange as they may sound, these were just some of the questions early RFID adopters frequently found themselves asking.

Wal-Mart, for example, spent time experimenting with how it attached RFID tags on carton boxes so the best and most accurate read rates can be achieved. If a tag is placed in the wrong place, the reader could fail to detect and retrieve data from it, noted Simon Langford, Wal-Mart's chief RFID strategist.

"We can now deploy 22 read points in less than 2 hours, and have reduced the cost of deployment by 75 percent." Simon Langford, chief RFID strategist, Wal-Mart

One the most recognized RFID users today, the supermarket chain went live with its RFID deployment in January this year, along with eight of its biggest suppliers. The next 200 biggest suppliers are expected to go live by January 2006.

Readers have been installed at numerous points across its supply chain ranging from the doors of stores to trash compactors to warehouses. The organization has since registered over 5.6 million EPC reads and received over 24,000 tagged pallets--and the numbers continue to grow.

On the lessons Wal-Mart picked up during the months spent laboring over its RFID pilot and live projects, Langford noted that perfection comes from practical experience. "We can now deploy 22 read points in less than 2 hours, and we have reduced the cost of deployment by 75 percent," he said. The company first announced plans to adopt RFID back in 1999.

Simulated experience
Tim Wilkinson, managing principal of RFID solutions practice, consulting and integration, Hewlett-Packard Asia-Pacific and Japan, added that experience and rigorous experimenting will provide the ability to replicate workable processes as closely as possible. HP, which offers technologies and consulting services in this space, uses RFID on over 40 products within the company and across 26 sites worldwide.

Like Wal-Mart, the hardware manufacturer spent time and considerable effort in carrying out the necessary tests and experiments.

The company soon realized that no two RFID-enabled sites are the same, regardless of how closely it tries to duplicate the premises.

"It's not always repeatable because of the different environments, humidity, layout of your shelves, and so on," Wilkinson explained, noting that these elements can affect read rates. "But we now know what to look out for and this has allowed us to replicate sites more quickly."

He added that read rates can be improved by trying out different positions in which tags and antennas are placed on the products and the grounds of production plants.

HP also operates what it calls, "noisy" labs, to recreate the surroundings and simulate "the real working environment" of a test site, he said.

"The lab has things like metal shelving and forklifts and other machineries moving around the lab, just like you would in a typical production factory or plant," he added. Similar labs are currently under construction in the Asia-Pacific region and will be opened soon. "The objective is to use these labs to test our products such as trying out the best placements of antennas and tags, and also to help our customers set up their RFID infrastructure."

An EPCglobal survey revealed that 69 percent of customer switch brands if a product they need is out of stock.

Another early adopter, The Gillette Company, also found that placing RFID tags on certain materials can be challenging. It began pilot projects in the first half of last year, and currently uses RFID to track all of its Venus razor cartridges within the supply chain.

Subas Visalingam, the company's fulfillment manager of Asia-Pacific value chain, said that products which contain metal, liquids or other dense material, have proven tough to tag as they can affect the percentage of successful readings.

"We also found that a 100 percent read rate of cases (placed) on pallets wasn't achievable, while it is achievable on individual cases," he said.

Gillette then drew up a methodology chart which labeled items according to how receptive they are to RFID. For example, an Oral B toothbrush is categorized under "easy" and described as "RFID-friendly" while a Duracell battery is classified as "extremely challenging". This allows employees to quickly identify how they need to handle and tag the company's various products.

Useful data
RFID, Gillette hopes, can eventually help eradicate some of the problems it currently faces. "Our staff don't know when our shelves are empty and they can't find the relevant stock in the storerooms," Visalingam said.

His company had determined that 15 percent of its items are unavailable on store shelves on a Saturday afternoon. This figure climbs to 18 percent by Saturday midnight.

He cited findings from an EPC survey that revealed 69 percent of customer switch brands if a product they need is out of stock.

"As a retailer, if you think your shoppers will be better satisfied and more loyal if they find what they're looking for on the shelf, then you have a business case (for RFID)," he said.

Wal-Mart's Langford also espoused the importance of data that is collected by the tags and understanding how this can be used to improve operational efficiencies.

The implementation has helped the company identify potential inefficiencies in restocking store shelves which it can now rectify, he said. Using RFID, for example, Wal-Mart was able to determine that only 1 out of 12 out-of-stock items get replenished on a busy Saturday.

"A fairly large supplier of ours, as they started tagging, could see a product's end-points and 'dwell' points which lasted as long as hours at a time," Langford said. "We found that on average, there are between 30 and 35 unnecessary cases sitting on sales floors."

"Today, we know how many cases (of a product item) we have in our stores but don't know where they are. With the RFID readers, we will be able to know how many have gone past the back-room door or the box crusher."

The system is then able to automatically locate products and feed that information, so Wal-Mart employees know immediately where a particular item is. That provides a speedier shopping experience for customers and increased product availability on store shelves, he noted.

For the company, it also means improved productivity and better proactive information. There is less freight to handle, and store assistants have more time to focus on servicing customers, he said.