The first has to do with the inconspicuous nature of RFID technology. The smallest RFID tags are paper-thin and have a height and width of a fraction of a millimeter. RFID readers can be smaller than a dime. Unlike bar-code technology, line-of-sight is not required for tags to be read. Given these characteristics, consumers may not always know they are carrying RFID tags or that someone else is reading information from the tags
A second challenge involves the fact that an RFID tag can identify an item uniquely. A bar code, in contrast, identifies an item as a particular type of product but doesn’t distinguish it from identical products on the store shelf. This means that when a customer walks out of a store with a pair of RFID-tagged shoes, the tag (if not removed or disabled) could forever identify those shoes as being a particular brand from a particular store purchased for a particular price.
The third challenge has to do with RFID enabling specific customer profiling, since businesses can use RFID tags to link customers to the items that they buy or place in their shopping cart. This could allow businesses to target customers with custom advertisements as they walk through a store. You and your items could also be tracked after you’ve bought them, as you carry your shopping bag into another section of a department store or to a different store owned by the same conglomerate (for instance, if you leave The Gap and go to Old Navy).
RFID applications can be divided into four categories:
1. Electronic article survey system which is used in retail stores to sense the absence of a certain product. It also provides specifics such as color, date of purchase, expiry and price.
The applications pose a serious threat to personal privacy because a device can be as small as pencil lead and often, RFID tags remain functional even after the product is taken home, which leaves chances of surveillance and poses a threat to privacy. The personal information becomes vulnerable. Organizations can easily gain information regarding your specific tastes and preferences. RFID tags on car are a sign of where you’ve been.
Also, RFID on consumer loyalty cards can track movement as well. However the threat of loss of privacy is not that serious because of a variety of reason.
1. The information that consumers fear will be leaked into the open is already available. The loss of privacy exists without RFID.
2. Issues of privacy are being addressed.
Determining the cost of deploying and maintaining a radio frequency identification (RFID) application is not a trivial matter, as the magnitude of your investment will depend on several factors that may or may not influence the cost of other components within the system.
The RFID application's "system" consists of both the RFID network itself (hardware, software, tags, etc.) and everything that needs to accommodate the RFID network: personnel, IT infrastructure, business processes, and the facilities in which the application will be installed.
Because there are so many system variables that in turn vary according to industry, it's difficult to provide a definitive cost breakdown for implementing an RFID solution. Therefore, the purpose of this article is to make you aware of the major variables that should be considered when assessing the total cost of ownership (TCO) of your RFID application:
RFID Hardware, Middleware, and Software
RFID hardware includes devices such as antennas, hand-held RFID readers, fixed RFID readers, mobile RFID readers, RFID portals, and RFID printers. RFID middleware facilitates the flow of data from where it is captured (the reader) to where it will be stored and analyzed (the database and related software). As you might infer from the assortment of readers alone, the type of hardware that you choose will depend not only on your budget, but also your business processes. Will you be placing large RFID portals at your dock doors, or would you prefer the mobility and flexibility offered by portable readers? You also need to consider the costs of the middleware and software that will communicate with the hardware. Rarely can the interface and software be used out-of-the-box; they will likely require customization to your particular application, and you may need to hire programmers to accomplish this if you lack in-house expertise.
In terms of cost, RFID equipment is usually a one-time investment. Recurring costs associated with the equipment may be incurred, though. These include licensing, upgrades, and maintenance costs.
The cost of RFID tags varies greatly depending on the type of tag and the volume purchased. Passive RFID tags, which draw power from the reader in order to transmit data, are much less expensive than active RFID tags, which have an on-board power supply (e.g., a battery). As with most items that you may purchase in bulk, you can usually negotiate volume pricing for your RFID tags. To realize a cost of about five cents per tag, however, you may be required to purchase several million tags.
Another factor to consider when evaluating the cost of RFID tags, or chips, is whether or not you plan to recycle them, which in turn depends on the application. Some applications in the automotive industry, for example, do not warrant the recycling of tags because they contain critical information that must remain "attached" to the vehicles at all times (e.g., vehicle identification numbers, or VINs). On the surface, recycling RFID tags may appear to be a money-saving activity, but that is not always the case. Additional time, and thus personnel, may be required to process the tags, and the personnel will need to be trained in order to prevent damage to the tags from improper handling. Lastly, tag recycling is better suited to business operations that are housed in one facility, as opposed to those that span multiple geographic regions.
Inevitably, the implementation of an RFID system will have some impact on your business processes. While improving efficiency is a strong motivator for many companies to adopt this promising technology, it's important to note that RFID may be initially disruptive to business processes. It takes time to put the system into place, work out the bugs, and then adapt your existing business processes to accommodate the RFID application. For example, you may need to adjust the speed of a particular conveyor belt, or perhaps the rate at which your delivery trucks are loaded. Many procedures that you have previously optimized may need to be re-optimized once the RFID system is in place. Needless to say, this process may require an investment in time and/or additional personnel.
In the long run, however, any initial disruption to your business may be worth it because simple asset management solutions based on barcode technology will become obsolete as RFID mandates become more prevalent.
By this point, you have probably realized that implementing an RFID solution is not a do-it-yourself project and that you may need to enlist the help of experienced professionals. RFID experts can make sure that your RFID readers, antennas, and controllers are connected and set up properly. This process may involve modifying your network architecture and/or building appropriate portals and structures to which the readers will be mounted. Once all of that is in place, the next step is to fine-tune the hardware setup to optimize its performance. Finally, thorough testing of this small-scale system should be done before the application is deployed on a production scale.
Training and Education
During your cost-benefit analysis, don't overlook the training/education variable. While RFID consultants can ensure that your application is properly constructed and deployed, it's a good idea to build a team of in-house experts who will have the responsibility of maintaining the system and training new and existing employees on how to use it. If and when you decide to use RFID in your business, you may want to pre-select a few such people, who can then participate in the installation and testing phases.
Maintenance
Maintaining an RFID application usually contributes the most to its total cost of ownership. This is largely due to the recurring overhead of RFID tags (even if they're recycled) and the need for spare readers, antennas, controllers, etc. to keep on hand in the event of a hardware failure. Additional expenses may include technical support from product vendors, bug fixing, and optimization of your IT infrastructure.
RFID applications should only be deployed where the long run benefits are greater then the costs. In the case of tags on consumer products, the chances of theft are reduced exponentially, along with improvement in the inventory system. RFID tags on cars help deter crime. Tags on prescription drugs eliminate the chances of counterfeit drugs infesting the market. RFID tags on people such as employees help in access and prisoners can be tracked easily as well. The applications also perform better because the issues of privacy have been addressed, for e.g. security can be increased and the tags can be de activated. Consumers can also be informed about the products that have tags.