Alien “Insider” Blog

RFID is an enabling technology, providing manufacturers with an array of opportunities for a return on their investment (ROI). Unlike bar codes which is an easily duplicated, write-once technology, requiring a direct line-of-sight to be read, RFID offers a wireless, re-writable memory with open and securable read and write data banks.

Value to the Manufacturer / Distributor

• In addition to serving as a vehicle to help with Authenticity, Brand Equity, Channel Diversion, Consumer Safety, Liability, and Return Fraud, manufacturers can also capitalize on increased production and supply chain efficiencies with RFID.
• In production, manufacturer and product identification information, along with unique serialization can be wirelessly programmed and scanned by local interrogators.
• Complementing the manufacturer’s product and serial number, Alien® Higgs™3 RFID silicon chip offers the addition of a non-duplicable, 64-bit unique factory programmed authentication identifier.
• The combination of the authentication identifier and the user defined memory serves as a non-refutable anti-counterfeit measure.
• Often manufacturers commission third party regional contract production entities to fabricate product. Sometimes unscrupulous organizations fabricate more than that ordered by the manufacturer. In such instances, it is very difficult do discern between authorized, and unauthorized product, as both appear authentic.
• By use of Alien’s Higgs3 authentication identifiers, the manufacturer queries, records and distributes sufficient RFID tags to meet the consigned order requirements. Any subsequent product not meeting the schema criteria is deemed counterfeit.
• The authentication acquisition process is painlessly administered by passing the product in proximity to the RFID reader. And for many products, the contents within their intended packaging is easily read, as RFID acquisitions do not require line-of-sight.
• In the event it should be required, the technology also provides an effective means to identify, contain, & recall products based upon production origin, safety, supplier, retailer, batch lots, or expiration.
• The serialization process can be further enhanced by virtue of recording the authorized RFID enabled product in a common server (e.g. a serialization vault), and forwarding the aggregate contents to downstream partners.
• Once consumed, the particular identity is noted as exhausted – any duplicate reads would signal a return, or potential fraudulent activity.
• This process strengthens perceived Brand Equity and enhances customer loyalty.

Value to the Retailer

Return fraud in the United States ratcheted to $3.7 Billon in the 2007 holiday season2. This not only depletes retail revenue, but the result ends in higher consumer prices.

• Extended user memory may be used to log the specific retailer, the date purchased and for returns, the price paid.
• For service personnel, the extended user memory may facilitate warranty information, or prior repair history.
• RFID enabled product also provides a mechanism for a more efficient supply chain, and a means to more quickly assess inventory status.
• RFID enabled promotional shelving enhances customer service by allowing consumers to provide product details via a kiosk, which instantly provides availability information for the customer. In addition to enhancing the shopping experience, it reduces sales person intervention, and minimizes upkeep labor.

Value to the Consumer

• Authenticity Confidence
• Convenience
• Customer Service
• Brand Loyalty
• Quick Inventory Search
• Lower fraudulent activities result in lower overhead, and ultimately better customer value.

Authentication Options

• Anti-counterfeiting measures are generally a culmination of various authentication management tools, with a goal of keeping at least one step ahead of perpetrators.
• Some of the more common measures might include Bar Codes, Holograms, Taggants, Digital Watermarks or Digital Signatures. However, even in combination, these options are often inadequate and often easily duplicated.
• In addition to the more common anti-counterfeiting options listed above, Brand Managers now have a new, robust and cost effective tool within their Product Integrity toolbox.
• This powerful new tool is Radio Frequency Identification, RFID.

Counterfeits
Result in significant business and public sector tax revenue losses. They contribute to unemployment, and add a tremendous burden to corporate and public enforcement agencies. In instances where inferior products pose health and safety issues, original trade suppliers can be subject to costly litigation in order to prove suspect products are in fact not authentic.

Brand Equity
Brand equity can be significantly diluted by the availability of counterfeit products and the discounted product sales though unintended channels.

In addition to brand authentication enforcement, costly litigation, and liability, counterfeits can often tarnish, if not destroy brand equity and consumer loyalty.

Channel Diversion
Violators of authorized distribution channels often take advantage of high supply chain mark-ups and dramatically improve their economics by exaggerating orders and selling to other countries, channels, and retailers outside their appointed channels.

Return Fraud
Return fraud in the United States ratcheted to $10.8 Billon in 2007. This not only depletes retail revenue, but the end result is higher consumer prices.

As internet transactions continue to foster global trade, consumers and marquee trade manufacturers become increasingly susceptible to issues related to product integrity.

Stemming from a web of unknown origins, the global counterfeit trade is estimated at a staggering annual volume of $600 Billion dollars.

Brand managers in all vertical markets are subject to counterfeit products, including Apparel, Automotive / Airline Parts, Cosmetics, Drugs, Electronics, Jewelry, Software, as well as Wines & Spirits.

In the United States, counterfeits account for up to $250 Billion dollars per year in lost business revenue, burdening the public with lost tax contributions, and resulting in the loss of over 750,000 American jobs.

The FAA estimates 520,000 counterfeit parts are installed on airlines each year. Counterfeit automotive brake linings have been found to be made of sawdust and cardboard - irresponsibly posing serious safety implications.

Return on Investment from using RFID to improve customer satisfaction, inventory control, promotional execution and brand authentication is realistic today.

Alien Technology® works with a global partner community of expert integrators, software and hardware vendors to deliver solutions for retailers and consumer goods vendors. In addition to industryleading Gen 2 RFID tags and readers, we offer an extensive set of expert RFID services including education, consulting and implementation designed to complement our partners’ retail expertise.

Value to Retailers:

• Find lost assets and boost capital efficiency by reducing the number of assets required to support the business process
• Ensure accurate billing for pooled assets like pallets

The Application:

• Track reusable plastic containers (RPCs), pallets, roll cages and other assets as they move through the supply chain or within a closed loop material handling process
• Assets are automatically registered as they pass through RFID-equipped dock doors and thruways, providing location information

Applicable RFID products:

• Tags: Alien high performance tags such as the Squiggle and M-Tag
• Readers: Alien Enterprise Readers such as the ALR-9800 and ALR-9900. Alien Smart Antenna readers such as the ALR-9650

Value to Retailers:

• Boost revenue and customer satisfaction by reducing stock outs
• Provide vendors with real-time visibility of inventory in the supply chain, improving forecast accuracy and damping the inventory whipsaw effect
• Reduce inventory exposure, ageing and working capital requirements

The Application:

• Track packaged goods from factory to retail floor, and produce from farm to grocery cooler
• Product is automatically registered as it passes through RFID-equipped dock doors and thruways, providing location information
• Empty case boxes and RPCs are captured as they leave the store floor, indicating usage

Applicable RFID products:

• Tags: Alien high performance tags such as the industry-leading Squiggle or M-Tag
• Readers: Alien Enterprise Readers such as the ALR-9800 and ALR-9900. Alien Smart Antenna readers such as the ALR-9650

Value to Retailers:

• Eliminate counterfeiting of high-value cosmetics, electronics, apparel and pharmaceuticals
• Protect brand integrity by eliminating knock-offs
• Enhance customer experience by ensuring quality

The Application:

• The product tag contains both a customer-writable EPC number and a factory-set, unique tag ID (TID) number
• The TID cannot be changed by a would-be counterfeiter, so an item with the correct pair of numbers is authentic. A quick check against a database using a handheld or desktop reader can verify authenticity by confirming properly paired numbers
• Much more effective than other authentication methods that can be copied – the TID number is factory set by the tag manufacturer in the IC and is unique

Applicable RFID products:

• Tags: Alien H2-based tags such as the Squiggle and Squiggle-SQ. Alien tags are compatible with any EPC Gen 2 compliant reader, including handhelds
• Readers: For desktop reading, use the ALR-9650 Smart Antenna reader. For conveyors, use the ALR-9900 Enterprise reader

Value to Retailers:

• Reduce cost of searching for misplaced pallets of product
• Provide accurate inventory of product on pallets
• Enhance customer satisfaction, improve revenue and reduce stock-outs by speeding the retrieval and distribution of product to store shelves

The Application:

• Tag pallets and pallet-rack slots with Gen 2 tags
• Automatically capture the location of pallets when put away by associating pallet and pallet rack tag numbers in the database
• Provide forklift drivers with accurate locations of pallets of products for quick retrieval

Applicable RFID products:

• Tags: Alien high-performance tags such as the Squiggle and M-Tag
• Readers: Gen 2 forklift readers from vendors such as LXE. Handhelds from vendors such as Psion Teklogix and LXE. Enterprise readers such as the Alien Technology ALR-9900

Value to Retailers:

• Significantly reduce cost and time required for physical inventory. The time it takes to do physical inventory is reduced by 90% from several man-days to a fraction of a day – in one multi-store pilot, management was able to reduce monthly inventory from 10 man-days (4 people for 2.5 days) to one hour for one person. This not only enabled lower costs, but enabled more frequent counts. The resulting RFID-based inventory was more accurate
• Eliminate stock-outs of product categories with high sku count such as apparel and books, leading to improved revenue and customer satisfaction

The Application:

• RFID-enabled physical inventory
• Using an RFID-equipped cart with a high-performance RFID reader, count tagged product simply by moving the cart down each aisle

Applicable RFID products:

• Tags: Alien H2-based tags such as the ALN-9562 Squiggle-SH and the ALN-9534 2×2, both sized to fit into typical hang-tag outlines of 1×3 or 2×2 inches. The ALN-9529 Squiggle-SQ, at only 1-inch square, fits on smaller items, yet still provides good range
• Readers: the ALR-9900 Enterprise reader, which delivers the sensitivity and speed required to penetrate stacks of apparel and other products. Alien Gen 2 tags are also compatible with EPC Gen 2 compliant handhelds