Warning on False Assumptions

Meta Group analyst John Brand warns that RFID in its simplest form simply replaces current identification methods (that is, barcodes) but increases the cost. Brand says to achieve additional business value, RFID use must automate business processes for stock identification.

"While this sounds trivial, the act of automating information collected from stock movements requires considerable additional business logic and analytics," Brand warns. "For example, the reading of an RFID 'event' is non-directional. That is, the read event gives no indication as to whether the stock is moving 'out' or 'in'. Without the use of multiple readers and the analysis of previous read events, directionality of stock movements cannot be assumed." [See "The Supply Chain's Missing Link", page 90 for an instance where not having internal controls had dire consequences.]

Teradata vice president for India, South-East Asia, Australia and New Zealand Julian Beavis points out that use of RFID tags is likely to create extensive amounts of duplicate and dirty data that will need to be cleansed to ensure only the most critical information makes it back to the core enterprise information systems operated by those in the supply chain. "In order for data to be used to improve the management decision-making process and ultimately the bottom line, it must be accurately collected, securely stored and made readily available for analytical applications," Beavis says.

RFID and active data warehouse technology fit together naturally. Collecting product data in and of itself is not a valuable business pursuit unless that data is stored for use in analysing business conditions. Beavis says the data warehouse not only gives context to the information collected via an RFID system, it allows for that data to be wed with external information to further optimize the decision-making process (see "Silent Might", page 32).

Sun's McDonald points out that other obstacles to local take-up of the technology include infrastructure requirements, business practices in general, the paucity of technology organizations available to assist in deployment and a potential landslide of organizations wanting to deploy.

"The other major impediment, which has not surfaced here yet but may, is the potential for public disquiet about the 'privacy issues' some perceive around RFID," McDonald says. "Will the burglar of the future be able to stocktake your house from the nature strip and decide whether it is worth coming back for?"

McDonald believes not, and labels consumer privacy campaigns against RFID an unfortunate overreaction and misunderstanding of the technology that demonstrates the need for technologists and technology organizations to "demystify" the technology for the public and to develop the protections against these issues and highlight the potential benefits to be gained.

However, those campaigns have already had an impact. Last July, reports US Network World, privacy advocates crowed when Wal-Mart and The Gillette Company cancelled a planned trial of "smart shelves", which inform the supply chain when (and with what) they need to be restocked. Wal-Mart has now chosen to give its customers the option to remove the tags from its products, while Benetton has reportedly ditched plans to embed tags in its clothes after news of its trial leaked.

The ARA's Gates says to overcome such concerns the ARA and EAN Australia have been proactive on the privacy issue, and have already devised an RFID code of practice for the industry, as well as guidelines for the acceptable use of RFID tags on products.

A report from RSA Security Laboratories proposes the use of "selective blocking" by "blocker tags" as a way of protecting consumers from unwanted scanning of RFID tags attached to items they may be carrying or wearing. RSA Security asserts that when used with appropriate care, blocker tags provide an attractive alternative for addressing privacy concerns raised by the potential (and likely) widespread use of RFID tags in consumer products.