The retail industry continues to embrace RFID technology. Sales gains, operational efficiencies and a reduction in shrink have been well documented, and 2012 is expected to be a breakthrough year as major retailers cue up the technology for deployment.
RFID in retail is expected to become ubiquitous within 12 to 36 months. As Macy’s Chief Administrative Officer Tom Cole told me during last month’s NRF Big Show, “in a few years we’ll be talking about something else, because we’ll all be doing this.” (Click here to view RFID’s coverage of the Big Show.)
With that in mind, RFID 24-7 set out to identify the next big market for RFID.
Clearly, food safety appears to be a sweet spot for the technology. Just as RFID provides increased inventory visibility for retailers, the technology can track food items in similar fashion, making food recalls easier to track and therefore limiting related illness. Big opportunities exist in the food supply chain from farm to fork, including monitoring temperature and humidity as food makes it way to retail outlets.
More than one-third of produce spoils before it reaches the shore shelf, representing an economic loss of an estimated $35 billion. RFID could put a big dent in that number.
In a sure sign of that food safety could be the next big ticket for RFID technology, retail RFID guru Bill Hardgrave recently told me that he is shifting the focus of his research to food safety.
“I’m still very much involved in retail apparel, but I think food safety is the next big frontier for RFID,” says Hardgrave, the former founder and director of the RFID Research Center at the University of Arkansas, and now Dean of the College of Business at Auburn University. “There is so much opportunity to improve on the food supply chain.”
Hardgrave noted that one major U.S. food retail chain now receives more than 300 product recall notices a year. “It’s a growing number, and RFID can help to put a stop to it,” says Hardgrave.
Insurance companies are banking on the benefits of RFID technology to open new markets in the insurance industry. Last year Hartford Ventures, a division of insurer The Hartford, entered into a strategic alliance with Intelleflex to explore insurance-related opportunities to reduce the amount of produce lost and improve the overall quality of produce during the distribution process from the grower to the retailer.
The hope is that RFID and in-transit temperature monitoring can put a major dent into the $35 billion in annual waste by allowing food shippers to automatically monitor data and make pro-active changes as simple as changing the routing destination of various pallets. The end result is that produce growers, distributors and retailers can avoid losses by utilizing actionable data.
“It’s simple, yet not a lot of people are doing it,” says Anthony Grosso, strategic alliance manager for Hartford Ventures. “The insurance industry has typically shied away from the cold chain because of the lack of data and there isn’t a heck of premium involved. And the losses can be significant, from a single e-coli breakout.
“The upside isn’t that great and the downside is huge. With new data visibility, I suspect the insurance industry would be more willing to underwrite these risks, which would only strengthen the entire supply chain.”
That was the goal of a recent pilot that tracked shipments of pork from Manitoba exporter Hylife to the Chongqing province in western China. The RFID initiative was spearheaded by CentrePort Canada as part of a broader initiative to increase exports from Canada to China.
“This project is a breakthrough on several fronts,” says Diane Gray, president and CEO of CentrePort Canada. “It establishes a new supply platform for exporting goods to China, which means more sales and market opportunities for Manitoba and Canadian producers. And it provides an efficient, cost-effective RFID-tracking system to assure Chinese consumers that our products are high-quality, authentic and safe.”
Invent IOT Technology developed the tracking technology, which includes a passive RFID tag that is placed in the container as it is locked to ensure the integrity of the cargo along the supply chain. The RFID tag, which contains critical information about the cargo, is read at origin with the captured information sent to a back-office system. The RFID tag is read again at destination and the information retrieved must match the originating information. The RFID system can be accessed through a portal on CentrePort’s website.
“This new RFID system will only help enhance Manitoba and Canada’s reputation for exporting safe, high-quality food products by providing the security and assurances that China is seeking,” Gray says, noting that product tampering, cleanliness, counterfeiting and the misuse of chemicals are some of the issues China continues to face.
Similarly, the European Commission-sponsored Farm to Fork initiative seeks to offer small to medium food producers in Europe the ability to benefit by deploying RFID. By linking RFID and sensor network technologies with a Europe wide database that contains the exact history of any food product, SMEs will be given the opportunity to optimize their own business process and maximize return.
In addition, a pan-union resource will be created which will allow producers to demonstrate unequivocally the quality and freshness of their product, which will have the effect both of increasing consumer confidence, and increasing producer margins.
With RFID technology embedded into their value chain, SMEs can benefit from improved worker productivity and efficiency, a reduction in labor costs, fast quality problems detection by monitoring environmental variables, more efficient control of the supply chain due to increased information accuracy, and a reduction of human errors from manual scanning operations.
The Farm to Fork has completed several pilots in the meat, dairy, wine and fish categories.