December 2005 | Commentary | IT Matters

Can Bar Codes and RFID Co-Exist?

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Last year, Radio Frequency Identification (RFID) technology became a media favorite, spurred by Wal-Mart and U.S. Department of Defense (DoD) policies requiring suppliers to ship goods that can be tracked using RFID. Such attention makes it seem as if bar-code technology—today's standard for data collection—will become obsolete overnight.

This is not the case, however. Although RFID promises to be a more comprehensive data-collection technology, still-emerging standards and lack of RFID deployments across the total supply chain are making organizations think twice before taking the plunge.

Over the past few decades, bar codes have become the standard for identifying and tracking products in the supply chain—whether cereal boxes at the grocery store or children's books at the public library. Such a comprehensive user base makes bar codes ubiquitous in the supply chain.

Moving most suppliers past the bar- code status quo—even at the behest of a retail behemoth—will take some convincing. But as RFID's benefits are realized across a number of industries, more and more businesses will adopt the technology in conjunction with existing data-capture tools to achieve the desired benefits.

The Best of Both Worlds

Hybrid solutions that use both bar- code and RFID technology are one way suppliers can meet Wal-Mart and DoD compliance guidelines without overhauling their entire data-collection process. To deploy a hybrid solution successfully, a company must understand the differences and benefits of both technologies, and consider where each one best fits into overall operations.

RFID technology is attracting attention as a next-generation application because it increases transparency across the product-handling life cycle. Other capabilities include "hands-off" detection, or the ability to gather data without user intervention.

The RFID tags on items can be read even if they are hidden from sight. RFID systems have read/write memory capability, and the ability to store data. And tags can be placed inside packaging or embedded in products.

U.S. federal government spending on RFID technology is expected to grow 120 percent by the end of fiscal year 2009, according to TargetView: Radio Frequency Identification—DoD Drives Emerging Technology, a February 2005 report released by Reston, Va.-based analyst firm INPUT.

In addition, overall RFID spending in the United States will grow from $91.5 million in 2003 to nearly $1.3 billion in 2008 as businesses continue to invest in chip-based tags and related hardware, software, and services, finds International Data Corp.'s December 2003 report, U.S. RFID for the Retail Supply Chain Spending Forecast and Analysis, 2003-2008.

Bridging the Gap

Bar codes, however, will not disappear anytime soon. Not only are they less expensive than RFID tags, they are widely deployed with well-defined standards and operational processes.

The good news is that users don't need to switch to RFID overnight, and hybrid systems that use multiple data- capture technologies can help bridge the gap between bar codes and RFID.

By fusing legacy and leading-edge technologies, for example, suppliers can meet Wal-Mart's compliance challenge without changing their entire data-collection processes. Then, as RFID operational efficiencies are realized and documented, they can be integrated into the business at a more controlled pace. The vendor's role will be to design a way to make the technologies work together, to satisfy the user's needs.

RFID Advice

Here are four recommendations to consider when deploying RFID:

1. Learn about the capabilities of different data-capture technologies. Numerous RFID, bar-code, and imaging technologies are available, and companies must take care to choose the right ones for specific applications.

2. Purchase hardware that supports multimedia data-capture capabilities to enable hybrid systems: RFID, bar-code, and imaging technology.

3. Pick the right middleware. Because RFID data has to be managed differently than bar-code data, finding a solid middleware solution is crucial for organizing the information.

4. Find a technology provider with the right experience to design low-risk solutions.

Most of all, it is important to cut through the hype and realize that RFID will not immediately replace bar codes. The best choice for many companies is a hybrid solution that employs a range of multimedia data-capture technologies to deliver greater visibility and lower costs across the supply chain.

Incorporating today's legacy systems with tomorrow's RFID capabilities is a sound approach that leverages existing investments to provide an open, flexible approach to meeting the challenge.

Can RFID co-exist in the supply chain with other data-capture technologies such as bar codes? Absolutely.

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