Sir, You report that widespread scepticism among suppliers is hampering the adoption of radio frequency identification (RFID) tags to replace bar codes ("Suppliers yet to be convinced on tagging", July 18). The technical teething problems will be resolved within the next few years, and during this period the costs of tags will also fall significantly.
However, a longer-term issue is that until RFID is adopted 100 per cent, whether in a distribution centre, retail store or supplier, the benefits of the new technology are significantly compromised. The supply chain suffers from the costs of running RFID solutions alongside existing technology (typically bar codes), and so there are several types of hardware, several alternative processes for staff to follow and multiple data sources to manage.
The most successful uses of RFID so far have overcome this problem in one of two ways. Either it is used in a closed loop, where it is possible to ensure 100 per cent compliance. Scottish Courage uses RFID to track costly aluminium beer kegs in such a supply chain.
Alternatively, RFID is used alongside other technology, in a way such that hardware, software and processes are seamlessly integrated. A trial to combat pharmaceutical fraud through authentication at the point of purchase was successfully completed by Aegate (a PA venture company). This accommodated the use of bar codes as well as RFID, allowing suppliers and retail pharmacies to gain benefits even when RFID was not fully implemented.
