An EPC RFID tag used by Wal-Mart

Radio-frequency identification (RFID) is an automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders.

An RFID tag is an object that can be applied to or incorporated into a product, animal, or person for the purpose of identification using radiowaves. Some tags can be read from several meters away and beyond the line of sight of the reader.

Most RFID tags contain at least two parts. One is an integrated circuit for storing and processing information, modulating and demodulating a (RF) signal and can also be used for other specialized functions. The second is an antenna for receiving and transmitting the signal. A technology called chipless RFID allows for discrete identification of tags without an integrated circuit, thereby allowing tags to be printed directly onto assets at lower cost than traditional tags.

Today, a significant thrust in RFID use is in enterprise supply chain management, improving the efficiency of inventory tracking and management. However, a threat is looming that the current growth and adoption in enterprise supply chain market will not be sustainable. A fair cost-sharing mechanism, rational motives and justified returns from RFID technology investments are the key ingredients to achieve long-term and sustainable RFID technology adoption.

History of RFID tags:

In 1946 Léon Theremin invented an espionage tool for the Soviet Union which retransmitted incident radio waves with audio information. Sound waves vibrated a diaphragm which slightly altered the shape of the resonator, which modulated the reflected radio frequency. Even though this device was a passive covert listening device, not an identification tag, it has been attributed as the first known device and a predecessor to RFID technology. The technology used in RFID has been around since the early 1920s according to one source (although the same source states that RFID systems have been around just since the late 1960s).

A similar technology, such as the IFF transponder invented by the United kingdom in 1939, was routinely used by the allies in World War II to identify airplanes as friend or foe. Transponders are still used by military and commercial aircraft to this day.

Another early work exploring RFID is the landmark 1948 paper by Harry Stockman, titled "Communication by Means of Reflected Power" (Proceedings of the IRE, pp 1196–1204, October 1948). Stockman predicted that "…considerable research and development work has to be done before the remaining basic problems in reflected-power communication are solved, and before the field of useful applications is explored."

Mario Cardullo's U.S. Patent 3,713,148 in 1973 was the first true ancestor of modern RFID; a passive radio transponder with memory. The initial device was passive, powered by the interrogating signal, and was demonstrated in 1971 to the New York Port Authority and other potential users and consisted of a transponder with 16 bit memory for use as a toll device. The basic Cardullo patent covers the use of RF, sound and light as transmission medium. The original business plan presented to investors in 1969 showed uses in transportation (automotive vehicle identification, automatic toll system, electronic license plate, electronic manifest, vehicle routing, vehicle performance monitoring), banking (electronic check book, electronic credit card), security (personnel identification, automatic gates, surveillance) and medical (identification, patient history).

A very early demonstration of reflected power (modulated backscatter) RFID tags, both passive and active, was done by Steven Depp, Alfred Koelle and Robert Freyman at the Los Alamos Scientific Laboratory in 1973. The portable system operated at 915 MHz and used 12 bit tags. This technique is used by the majority of today's UHF and microwave RFID tags.

The first patent to be associated with the abbreviation RFID was granted to Charles Walton in 1983 (U.S. Patent 4,384,288).

RFID tags:

RFID tags come in three general varieties: passive, active, or semi-passive (also known as battery-assisted). Passive tags require no internal power source, thus being pure passive devices (they are only active when a reader is nearby to power them), whereas semi-passive and active tags require a power source, usually a small battery.

To communicate, tags respond to queries generating signals that must not create interference with the reader's, as arriving signals can be very weak and must be told apart. Besides backscattering, load modulation techniques can be used to manipulate the reader's field. Typically, backscatter is used in the far field, whereas load modulation applies in the nearfield, within a few wavelengths from the reader.

Passive RFID tags have no internal power supply. The minute electrical current induced in the antenna by the incoming radio frequency signal provides just enough power for the CMOS integrated circuit in the tag to power up and transmit a response. Most passive tags signal by backscattering the carrier wave from the reader. This means that the antenna has to be designed to both collect power from the incoming signal and also to transmit the outbound backscatter signal. The response of a passive RFID tag is not necessarily just an ID number; the tag chip can contain non-volatile, possibly writable EEPROM for storing data.

Passive tags have practical read distances ranging from about 10 cm (4 in.) (ISO 14443) up to a few meters (Electronic Product Code (EPC) and ISO 18000-6), depending on the chosen radio frequency and antenna design/size. Due to their simplicity in design they are also suitable for manufacture with a printing process for the antennas. The lack of an onboard power supply means that the device can be quite small: commercially available products exist that can be embedded in a sticker, or under the skin in the case of low frequency RFID tags.

In 2006, Hitachi, Ltd. developed a passive device called the µ-Chip measuring 0.15×0.15 mm (not including the antenna), and thinner than a sheet of paper (7.5 micrometers).[6][7] Silicon-on-Insulator (SOI) technology is used to achieve this level of integration. The Hitachi µ-Chip can wirelessly transmit a 128-bit unique ID number which is hard coded into the chip as part of the manufacturing process. The unique ID in the chip cannot be altered, providing a high level of authenticity to the chip and ultimately to the items the chip may be permanently attached or embedded into. The Hitachi µ-Chip has a typical maximum read range of 30 cm (1 foot). In February 2007 Hitachi unveiled an even smaller RFID device measuring 0.05×0.05 mm, and thin enough to be embedded in a sheet of paper.[8] The new chips can store as much data as the older µ-chips, and the data contained on them can be extracted from as far away as a few hundred metres. The ongoing problem with all RFIDs is that they need an external antenna which is 80 times bigger than the chip in the best version thus far developed.

Alien Technology's Fluidic Self Assembly and HiSam machines, SmartCode's Flexible Area Synchronized Transfer (FAST) and Symbol Technologies' PICA process are alleged to potentially further reduce tag costs by massively parallel production[citation needed]. Alien Technology and SmartCode are currently using the processes to manufacture tags while Symbol Technologies' PICA process is still in the development phase. Symbol was acquired by Motorola in 2006. Alternative methods of production such as FAST, FSA, HiSam and PICA could potentially reduce tag costs dramatically, and due to volume capacities achievable, in turn be able to also drive the economies of scale models for various Silicon fabricators as well. Some passive RFID vendors believe that Industry benchmarks for tag costs can be achieved eventually as new low cost volume production systems are implemented more broadly.

Non-silicon tags made from polymer semiconductors are currently being developed by several companies globally. Simple laboratory printed polymer tags operating at 13.56 MHz were demonstrated in 2005 by both PolyIC (Germany) and Philips (The Netherlands). If successfully commercialized, polymer tags will be roll-printable, like a magazine, and much less expensive than silicon-based tags. The end game for most item-level tagging over the next few decades may be that RFID tags will be wholly printed – the same way a barcode is today – and be virtually free, like a barcode. However, substantial technical and economic hurdles must be surmounted to accomplish such an end: hundreds of billions of dollars have been invested over the last three decades in silicon processing, resulting in a per-feature cost which is actually less than that of conventional printing.

RFID in inventory systems:

An advanced automatic identification technology such as the Auto-ID system based on the Radio Frequency Identification (RFID) technology has two values for inventory systems. First, the visibility provided by this technology allows an accurate knowledge on the inventory level by eliminating the discrepancy between inventory record and physical inventory. In an academic study performed at Wal-Mart, RFID reduced Out of Stocks by 30 percent for products selling between 0.1 and 15 units a day. Second, the RFID technology can prevent or reduce the sources of errors. Benefits of using RFID include the reduction of labour costs, the simplification of business processes and the reduction of inventory inaccuracies.