Tuesday, August 24, 2004

'Big Brother' Fears Become Real-World Concerns

Tuesday August 24, 2004
Big Brother, big business

GEORGE Orwell first coined the term, numerous sci-fi books and movies have delved into it, and now there’s also a reality show on TV: Big Brother fears are gradually becoming a real-world concern.

Just look at Japan, where the schoolbags and uniforms of primary school kids are being tagged with microchips that can track their whereabouts on school grounds.

All a Japanese kid has to do is to pass by readers that have been installed in the school gates and at other key locations, and his location will be captured and relayed to the school surveillance system.

In the Ross Correctional Facility in Chillicothe, Ohio, inmates are now part of a pilot project which requires them to wear wristwatch-sized devices that transmit radio signals to the readers and then to the prison computer, allowing authorities to determine their exact location.

Tamper with the devices, and they will set off an alarm, allowing prison guards to easily track down the inmates.

These applications all stem from a not-so-new wireless technology called radio frequency identification (RFID). Its ultimate objective is to trace, identify and connect objects with objects, via radiowaves.

Radio frequency (RF) technology can already be found in action in today’s society. A quick stroll through shopping malls and you’ll realise that the security tags attached to most clothes are actually anti-theft solutions put in place to prevent shoplifting. These RF tags basically act like remote sensor alarms.

Bye-bye, barcode
However, when it comes to identifying a product, barcodes and simple RF solutions are nothing compared with what RFID can offer.

Currently, barcodes are used by industries ranging from retail to logistics, for product identification. But their use is somewhat narrow.

According to John Moran, business consulting services country manager at IBM Malaysia, a line of sight is required between the barcode and the scanner.

Also, the thick-line, thin-line barcodes can hold only so much information – just the manufacturer and the name of the product. Its read-only function does not allow the barcode to uniquely identify a product.

Which is why RFID is seen as a superior technology.

RFID, which falls under the umbrella of automatic identification (Auto-ID) technology, has the ability to remotely track and identify a product.

RFID tags are embedded with microchips that have built-in memory, which allows them to store key information such as the serial number of an object or the identity card number of a person, to allow for automatic identification by a reader.

These tags are assigned a unique number via a numbering scheme called the electronic product code (EPC).

Third revolution
Here's the surprise: That new technology that everyone's talking about? It's about 50 years old.

RFID technology is only now witnessing massive growth, and that's thanks to the increasingly competitive business environment. Companies are looking at the most financially feasible way to collect and aggregate data to streamline their operations, using technology.

According to research firm IDC, RFID spending in the US retail supply chain is expected to grow to nearly US$1.3bil (RM4.9bil) in 2008. Much of the spending will be on hardware such as the RFID tags, infrastructure and systems integration.

“The greatest near-term growth opportunity for RFID is in supply chain management,” says Erik Michielsen, director at ABI Research (www.abiresearch.com), a New York-based technology research company.

IBM’s Moran describes RFID as the “third revolution” in the supply chain, after forklift trucks in the early 20th century and barcodes in the 1970s.

Companies such as US retail giant Wal-Mart Inc are moving aggressively to adopt RFID to improve the flow of goods through their extensive network of suppliers and distributors, by tracking and monitoring goods from the “dock to stock” level.

According to an April 30 report in the RFID Journal (www.rfidjournal.com), Wal-Mart intends to tag pallets and cases that arrive at one of its regional distribution centres, where readers at the dock doors will automatically scan the tags.

The data acquired will then be passed on to the retailer’s operations, merchandising teams and the suppliers of that specific shipment.

At the distribution centre, cases will be removed and dispatched to participating Wal-Mart stores. At that point, the tags on the cases will be read and automatically updated to confirm that the shipment has arrived.

Wal-Mart has stipulated that its top 100 suppliers use RFID in their supply chain by next January. After this, the company hopes to extend this initiative worldwide.

A clear view
What Wal-Mart probably realised was that RFID has the potential to significantly reduce manual operations.

More importantly however, with an RFID tag’s ability to identify and track each individual product, Wal-Mart would have a clearer view of its supply chain. As such, it would be able to react quickly to any market changes, says a report by Boston-based networking research and consulting company, the Yankee Group.

But RFID need not be just concentrated within the supply chain. IBM's Moran believes that the early movers are coming from the food and drink, retail and pharmaceutical industries, where product-tracking and potential recalls are a key concern.

“We have airlines adopting RFID for baggage- and cargo-handling, automotive companies using it for spare parts identification, and cigarette manufacturers using it to identify legitimate products from fakes or grey imports,” he says.

Some of the other business-automation applications, according to Jafizwaty Ishahak, industry analyst for smartcards and Auto-ID at analysis firm Frost & Sullivan (www.frost.com), include security, asset management (where tags are embedded in important objects), access control and transportation.

The last could provide a cashless toll system for drivers, she adds.

Jafizwaty says that the present SmartTAG system used by Malaysian toll operator Rangkaian Segar (PLUS) is not based on RFID. Instead, it uses the Touch 'n’ Go smartcard, which is fitted into a slot on a device that sends signals to the tollgate reader.

In yer face
Other applications are slowly making their way into many facets of everyday life, such as one that would allow grocery shoppers to pay for a trolley-load of goods without having to queue up at a checkout line and make small talk with the cashier.

In this case, RFID readers placed at the exits of the shop will perform a radio scan of individual item tags; a swipe of your credit card on your way out confirms the purchase and records the transaction.

Reports have also surfaced that by 2005, European bank notes will be embedded with RFID tags to foil counterfeiters.

RFID tags are also starting to appear in consumer products such as Gillette razor packages. Gillette plans to use these tags as part of its “smart shelf technology” rollout, where store shelves will be equipped with built-in RFID readers to track inventory levels in real-time.

Clothing-makers are also studying the possibility of embedding RFID tags in their items.

Yep, Big Brother may be knocking on your door right now.

Spychips 'R' Us
Privacy advocates, such as Consumers Against Supermarket Privacy Invasion and Numbering or Caspian (www.nocards.org), argue that RFID technology can have an invasive effect if retailers keep the tags activated after consumers have left the store.

Caspian believes that these RFID tags or “spychips” allow retailers to collect personal information about who buys what, when, where, and how; and even to the extent of monitoring consumers’ usage of the products in the privacy of their own homes.

“With RFID, each individual can of Coke would have a unique ID number which could be linked to the person buying it when he scans a credit card or a frequent shopper card,” says an article by Caspian founder Christine Albrecht.

Others beg to differ.

Mohamed Isahan, managing director of Abda Computers and Electronics Sdn Bhd (Abda.Com), says that there is a lot of misconception about RFID tags when it comes to these privacy concerns.

“Tags are attached to the goods, not to the person. When these tags are scanned, there are no associations to the buyer ... unless you use a credit card,” he says.

One could pay with cash, he adds.

As for the privacy vulnerability of credit card transactions, Mohamed says that even now, with the current barcode system, there is every possibility of tracking consumer-spending behaviour.

“The database at the backend is able to link the purchases which have been scanned using the barcode system. This can be connected to the credit card that has been used to pay for it,” he notes.

Since RFID tags and labels are now slowly replacing barcodes, privacy concerns will continue to escalate.

However Malaysians won’t have to worry about such issues ... yet.

What’s preventing this escalation from becoming an explosion, besides the prohibitive price of RFID tags, is the transmission capabilities of the tags, which are not equipped to send a signal to readers that are placed too far away.

“The chips being used in retail have a range of less than two metres. Tracking which household is using a particular product would require readers to be put on wires and underground,” Mohamed says.

Furthermore, the current market price of a single RFID tag can range from RM3.80 to RM10, depending on the type of applications it contains, usage and final form factor. This makes it too costly to embed tags in consumer products.

Standards collision
There is another barrier threatening the takeup of RFID technology: The lack of a global RFID standard for applications.

“The establishment of a standard is probably the most important challenge the industry currently faces,” says Frost & Sullivan’s Jafizwaty.

Although the International Standards Organisation (ISO) has standards for RFID tags and readers, manufacturers are incorporating their own implementations of these standards in their products, she says.

Thus interoperability is almost non-existent across products from different manufacturers.

Abda.com’s Mohamed says it would be more feasible if manufacturers cooperated by bringing together key technologies and working on the same platform.

There is a distinct lack of collaboration within the industry currently, he says, adding that once RFID standards are defined, one other problem would be solved: The cost of both RFID tags and systems would decrease over time.