Every new technology has its challenges and RFID is no exception. In order to enjoy the benefits that this emerging technology offers, there are some obstacles that need to be overcome within a company's organization and across the market as a whole. Individual companies must justify the initial investment in RFID tags and readers while facing the business challenge of applying the tags to goods, although these challenges are beginning to diminish.
One of the largest challenges facing the RFID industry has been the cost of the equipment, especially the tags. Applying tags to thousands of items has been an expensive task. Though tags are still higher priced than the industry would like, the prices will go down as the technology and usage grows. The price for tags varies depending on type, but a good rule of thumb would be 20 to 40 cents for a passive tag. The days of nickel tags may still be years away.
The adoption of standards, or lack of standards, has also been a topic of contention. There are emerging standards (EPC) that address the movement of products through the supply chain. This standard is new and is just now being implemented. There are also other standards that are associated with different industries.
As RFID adoption continues to grow, hardware costs are continuing to decline and tag application solutions are already emerging from leading solutions providers to combat the application dilemma. But implementing the tags and installing the readers are only the first steps towards realizing the benefits of RFID. Having the supporting technology and infrastructure in place to aid such an initiative is vital. Without the ability to utilize and analyze the data generated, the full benefits of RFID cannot be realized. This is where the middleware comes into place.
A technical challenge facing RFID adoption is the inability of RF waves to be read through certain materials. For example, some liquids absorb radio frequency waves, while other liquids are permeable. Certain metals, such as steel, can also cause complications and inaccurate readings because of their reflective nature. But understanding these issues leads to creative solutions. Placing tags on plastic caps, instead of adjacent to the liquid, may resolve the problem.
Software, or middleware, will play a very important role in any RFID solution. Information read and collected from tags and readers will need to be distributed to the correct databases and applications to provide timely and valuable information. This information may need to be shared both upstream and downstream in a distribution supply chain, or simply stored locally. Finding and partnering with the correct software provider will also be key to turning vast volumes of data into useful information.
An article from RFID Journal titled "RFID Opportunities and Challenges" states: "RFID can provide a wide variety of benefits across many different industries. But there are also major obstacles to overcome in deploying the technology. The two biggest hurdles: building an infrastructure that handles the data and then making use of the data."
"No matter what the industry, however, early adopters of RFID technology still face some major hurdles. Among the most significant challenges will be dealing with the enormous volumes of data generated and integrating it with existing IT and supply chain applications."