Identifying the real cost of an RFID project

I have recently been able to talk to a contact in Australia about an interesting project where RFID will be able to benefit his business. During a chat around RFID, what it is and what it can do, we covered some of the things to be aware of when starting out on the journey implementing RFID, one of those is a subject I often raise with anyone thinking about adopting RFID technology and that is buying quality tags and how the real cost in your project is often not your tags but attaching them to your asset which makes it critical that the tags you use continue to work for the long term.

As a second post in my RFID Mini-Series, we will look at how to assess the real costs of your RFID project and how, making the right choices at the beginning, will likely determine the success or failure of your project.

An RFID project will have a number of components, the tags being the most obvious, RFID reader hardware, software solutions and something often missed by many, a process of attaching tags to assets. Typically, price is always a consideration for any purchase, why would it not be? However, it is critical that you assess the real costs and not just the face value of a tag or hardware.

If we put aside any costs for software, readers and antenna for a moment, lets for a moment make a hypothetical new business. Since I am an advocate of the Circular Economy our new business is a milk delivery company.

We invest in 10,000 reusable milk bottles. We are lucky, we are at the start of the journey, our bottles are sat in a warehouse in boxes. We have purchased 10,000 tags; we chose the cheapest of three suppliers at ￡0.50 per tag. The others came in at a range up to ￡0.75 per tag.

We now have the task of attaching those 10,000 tags to the bottles, clearly not a small task even with as few as 10,000, imagine for a moment projects with millions of tags. The process of attaching the tags is often an area underestimated. However, it is something that can be made much easier with automation and best practice, something we can discuss in a later article.

Not only does the tag have to be attached to the bottle, but we will, inevitably also need to register that bottle in our app or software systems database.

The process would probably look something like this, moving boxes of untagged bottles, cleaning the bottle, applying the glue, applying the tag and registering the bottle and replacing it in the box, which is then taken back to storage.

This takes time.

If you are organised with military precision, let us say it takes 1 minute for each bottle to go from and untagged bottle to a tagged bottle, not an unreasonable estimate given staff take breaks, lose concentration and inevitably slow down the longer the task takes.

In our example we are paying wages for 10,000 minutes, that works out at over 166 hours or 20 days, not an insignificant investment in time.

Once we have them all tagged, we get the bottles out into the market and seemingly our system is working well, assets are being tracked, we know our customers and it all looks good. However, soon we find out that tags are failing, fall off or stopping scanning and we are only 3 months in to the project. We do a quick calculation and it seems we have a 25% failure rate.

You may look at this and say “we will never have such a high failure rate in our project” however, I have seen projects which have had near 100% failure rate, due to tag quality and tag faults, while I am not going to name them here, however, you can easily do a Google search and find examples of RFID projects that have failed. ?

In our made up scenario, this means that very 3 months we would be ‘re-tagging’ 25% of the bottles, lets set-aside the fact that we will inevitably now have loss in the system with untracked items and the cost associated with that, we not only have to buy an extra 2500 tags each 3 months, but also have the cost of retagging, a process which is now not efficient as it was because the failed units are dripping in as the supply chain brings them back, but let’s assume it is still 1 minute per asset, we have wages for 1 week every 3 months simply to keep your assets tagged.

The desire is to tag once, and for that tag remain with the asset for the life of that asset, anything else is hugely costly

Clearly not a sustainable position with significant cost, but what is the solution? Does this mean RFID is dead and can never be cost effective?

No of course not, but the choices you make up-front affect the outcome project dramatically, probably more so with RFID than any other technology.

When our fictitious new company looked at the market and asked for prices, we went, naturally with the cheapest option. Why would we not? The tags look the same, the sales person told us they were the same protocol, and adhered to the same ISO standards, but that hides a whole realm of truth and untruth in the quality of those tags.

There are so many aspects that dictate the quality of the tag and some aspects of how a tag is made that makes is suitable for some applications and not others, and as such the relationship you have with your supplier, the understanding that they have of your project is critical.

What are the quality factors?

We will look at some of those aspects in another post and discuss how to choose a tag, but quality factors include, copper quality, silicon wafer quality in the IC, solder type and quality, moisture resistance, quality of adhesive and glue or the quality of the attaching mechanism.

Many of these factors only start to become apparent as time goes by. We see these demonstrated through both accelerated aging tests and in real world examples where aged tags stop working, often only a few months into their use.

Copper Quality – The grade of the copper used in the antenna coil, especially critical when subjected to constant expansion and contraction due to temperature variations. Almost all tags will have some temperature variations, imagine our bottles, left on a cold door step on a winters morning but also run through a high temperature sterilisation process for cleaning.

Solder Quality and Solder Type – They type of solder used to attach the antenna to the IC. Traditional solder which has less flexibility and is more prone to dry or broken joints as opposed to gold which is used in the higher quality tags.

IC quality – The quality of the silicon, and the quality in the production of the wafer

Glue or sticky pad quality – How the tag is attached to your asset, the glue or stick pad is critical. Many of the higher-end suppliers work with third parties such as 3M for their glue and sticky pads, cheaply produced adhesive will inevitably mean the tag falls off your asset.

There are other factors that should be considered when choosing a supplier for your RFID such as the uniqueness of the UUID and guarantees given, but we will discuss those in another post of the RFID Mini-Series.

All of these factors of course increase the price of the tag, a high-quality 3M adhesive which will prevent the tag from ever coming off the asset is more expensive. Gold is more expensive than traditional solder, yet it is more flexible and allows for the expansion and contraction of the solder joint due to heat.

However, remember, in our fictitious example, which is in all honesty could be a conservative example, we are re-tagging 25% of our assets at a huge cost every 3 months, therefore even if the higher quality end of the market are significantly higher cost, they are still the cost effective option, the desire is to tag once, and that tag remain with the asset for the whole life of that asset, anything else is hugely costly for buying tags, retagging and not to mention the loss of assets due to this issue.

Spend wisely at the start on quality tags, tag your assets once and enjoy the benefits of RFID in your project long term.

Stay tuned over the coming weeks and months, as we will be looking at some real-world applications for RFID technology, giving some case studies where it has been both successfully, and indeed, unsuccessfully used.

If you would like to discuss how RFID technology can directly lead to productivity and efficiency improvements, providing a positive return on investment to your business, especially in the circular economy model like that one described above, please do reach out to me and send DM, I welcome discussions with anyone on the subject and will offer help and advice where I can.