Radio frequency identification tags may be one of the hot topics among supply-chain-management gurus looking to shave costs. But don't expect them any time soon in PET packaging.
The technology, designed as a sort of next-generation bar code, remains years away from being cheap enough to use in PET packaging, according to RFID expert Paul Butler, president of Packaging Materials and Technologies and a professor at the University of Oxford in England.
But Butler, speaking at Nova-Pack Americas 2005, held Jan. 24-25 in Bal Harbour, said packagers need to be familiar with RFID technology because trials are starting, and major retailers like Wal-Mart Stores Inc. are keenly interested.
RFID advocates say it allows more information to flow more quickly through the supply chain, reducing inventories and making companies more efficient. The technology uses radio waves to read information embedded in the tags.
Butler also said retailers like it because it can be a big cost saver at the checkout, reducing the 5 cents Wal-Mart estimates it costs for every bar-code scan. RFID does not require the line-of-sight reading that traditional product-code scanners require.
For now, he said, companies are looking at RFID on more-expensive items and on things like pallets and shipping containers, and have started trials on items such as clothing, DVDs and ink cartridges.
RFID tags cost 30-50 cents each, and tagging a commodity item like beverage bottles won't happen until per-tag costs get below 3 cents, possibly below 1 cent, according to Butler. That could take another three to seven years, he said.
RFID in plastic bottles could be put in the closure or label; or, in the future, the tag and its tiny antennae could be printed directly onto the bottle with high-speed printers, Butler said.
He said PET is largely transparent to RF technology, which is an advantage over metal, which can disrupt RF transmissions. But he cautioned that liquids could disrupt the signals as well.
Another issue that will have to be addressed, Butler said, is who will pick up the cost of the RFID conversion. He said the costs are likely to be picked up by the supply chain, while most of the benefits of the technology will flow to the retailers.
``The supply chain was never level,'' he said.