RFID, logistics and material flow

On the final day of How I learned to love RFID we visited the Fraunhofer institute for material flow and logistics. The institute concentrates on supply chain, logistic and robotic applications. They also foster the Open ID Center, that intends to create open platforms for the use of RFID in the supply chain.

Logistics and supply chain applications are mostly out of the scope of investigation for Touch. However, the discussion covered interesting areas such as the potential of RFID to offer a more transparent supply chain, that may have an impact on the ways in which we interact with things in the future. For this, it was very useful to get a deep insight into the ‘other side of RFID’.


The form of the discussion was an informal talk with Ralf Neuhaus while observing the various testbeds for containers, palettes, conveyors and robots. Then a question and answer session with Hunika Nemeth, a software engineeer working with Enterprise Resource Planning systems.


The Fraunhofer people were very honest that they are still conducting basic research in RFID technology. Their focus is on the integration of standard components that form useful supply chain applications. They are creating prototypes and products around these integrations for their clients. They aim for lean processes that are decentralised, distributed and transparent. This is inspired by MIT ideas about ‘lean production’ and Japanese thinking around management process.

'High end and low tech'

In their view, logistics shouldn’‘t be seen as a discrete, closed, compartmentalised system: Everybody is part of logistics, we start to interact with these systems the minute we order something, or interact with daily life: the systems that order the food we eat, that manage the ways that cities run, that keep higher level systems such as transport running.

Are there new business models around this?

They have the intention of making an ‘internet of objects’ but they foresee huge problems when they move outside of closed systems. They predict that the true internet of things will not happen for a while.

When an RFID supply chain is being designed, negotiation between partners is a critical problem area. Clearly trust is really important between partners, but this needs to be encoded in software and hardware. What if my competitors can see what is on the shelves in my warehouse? How do we balance co-operation and competition?

They are trying to develop ‘high end and low tech’ systems, meaning that there is the use of off-the-shelf components (that do not require basic research) that used together offer new ways of solving problems.

How is an RFID system organised?

There are three levels to an RFID system:

An Enterprise Resource Planning system (ERP)

An ERP is a database that can be leveraged and queried at a management level. It is typically asked questions like ‘how many goods do I have in storage?’. It can be queried about motion and velocity: how much goes in and out over certain time periods. It also links into other personnel, financial and material management systems, where staff, machines and economics can be planned. 30% of the ERP system is about relationships to suppliers and customers.

A Warehouse Management System (WMS)

This system has all of the information about the status of a warehouse, such as the movement/guidance of the vehicles, locations of palettes and items. All things (relationships, movements, contents, etc.) are historically recorded: a kind of ‘archaeological development’: so that jobs or tasks are not done twice.


The interfaces are on control panels and wireless handheld terminals as well as visualisations on large screens that include 2D plans and images, so that people can see with a glance what is going on. The WMS is usually tailored to customer needs, and this is what Fraunhofer have developed most themselves. It’s connected to the ERP, but in some cases might be better off as a single system.


Nobody really knows what RFID middleware is yet. It is it something that everyone needs to use, and is developed in situated contexts according to very different needs. There is a huge challenge in that all customers try to integrate their existing software landscapes into an RFID system.


RFID technologies are fundamentally different to previous barcode or signature based systems, in that they contain more detailed information as to history, ownership, value, time constraints, etc. plus the fact that we can read and write to RFID. This means that they are representational different in software. The basic affordances of the RFID needs to be represented in the two systems above.

ERP system providers are working with Fraunhofer, and designing their own middleware. At the moment these providers are integrating their middleware into their customers systems. They are unifying many different chaotic things in the middleware. Each customer is different, they all have historically grown systems.

Fraunhofer tries to make lean middleware, to accept different data streams and to get them into unifying languages. Middleware shouldn’t know what will happen with this data, it just routes data between systems. The leaner the software, the easier it is for the customer to integrate it into their legacy systems.

What is interesting about this is how layered the systems are at all levels. Objects know where they need to go, and don’t need warehouses to tell them. Systems are layered into local levels. Things get pushed to higher levels when needs arise: not central authority, but local reporting. Like blogging! Yet in all cases there seem to be exceptions, and apparently in some special cases, the transponder can go directly into the WMS or ERP and change the direction of the conveyor.

What about hardware?

At a basic level there is only the use of RFID readers and RFID transponders (tags) of many different types.

RFID gate

RFID readers are organised into ‘gates’. There is not yet a technology capable of scanning an entire warehouse and working out what is there.

As the ERP needs to know whether to put the objects on the plus or the minus side of the inventory, these gates cannot just read the IDs, they also need to know whether the items are going in or going out.

RFID transponders are passive and active. Again we see interesting layering of responsibility. Packages or items contain passive tags that communicate to a gate, and the gate then writes an active tag on the palette so that it knows what it contains. This overcomes some of the problems with reading passive tags over long ranges.

Active palettes

Within logistics there is an economic factor: if the product is high-value then it makes sense to have sensors and active tags to track things like temperature limits or shock damage. Active tags used for these purposes can be switched into passive and back again to save battery power.

Active tag

In typical environments they last for about seven years, and do not have replaceable batteries! On the tag we can store 256 bits of data such as time labelling alongside sensor data. As soon as we have temperature and other measurements then it gets more complicated, particularly integrating the data into the database.

There are also interesting investigations into material handling, such as parcel sorting using distributed intelligence, and grabber technologies that can handle just about any shape of object through the use of rotating rubber bands.

How are you thinking about security?

Security has mainly been a question of whether the objects are online or offline. Fraunhofer have been developing intranets where certain permissions are given and shared between suppliers and customers, this is perhaps a more traditional question of access priveleges.

UHF ceiling reader

But when it comes to RFID transponders and readers, the security question is more open. There is no established rules yet about the permissions structure for transponders: who is allowed to read the transponder data? Who is allowed to write over the data? For each customer the question is different. In pharmaceuticals for instance they need very strict documentation of processes, there must be no permissions for manipulation, what is written on the contracts must be fulfilled, and transponders and readers must obey this.

Then there are material security questions, such as the kind of ‘logistics of goods that you use more than once’. There is always loss, even in closed systems. In one year a typical logistics firm will lose about 30% of their containers: they are re-appropriated for other purposes. This is experience from everyday life and must be encoded into the software systems.

What about the internet of things?

There is pressure from industry to put everything on the internet, which is difficult from both a security and management perspective. If we put a transponder on every product then we will have data-overload problems, even if we are running local servers. Future intra and internets will need to be powerful, scaleable and high-bandwidth.


Fraunhofer runs a project that asks what will happen if everything has a transponder? If we take yoghurt pots for example. We have 1000 yoghurts on one two metre high palette. Where do we put all of the transponders? The gates typically break down after 150 IDs, and it breaks down at the level of physics, not software. But should we solve this problem? Is it important? If we solve this then perhaps the middleware becomes too overweight. This is then not sellable, because the software will be too complex to integrate into legacy systems. The ERP could then be overloaded, and would require a huge management task.

At this point many of us in the room shouted out that of course it will be solved! If we look at Moore’s law, the history of technology, mobiles, laptops, wifi, etc. it all seems to work on desire.

The Fraunhofer people partially agreed, but re-iterated that there is a problem with physics, not software. At a certain point hundreds of tags pulsing is indistinguishable from background radiation.

What about printed electronics?

At the moment it’s not even possible to get a prototype of printed RFIDs from the research labs, so it hasn’t yet been possible for them to test out the technology. Maybe in 2 or 3 years printed tags will reach the power levels that the silicon/metal/soldered labels currently in use.

RFID printer

There is still the need to develop the right polymers for use in the printing, at the moment the base-material in many of the polymers is not activated by UHF radiation, making it useless in current reader systems. And then even if we have the polymer transponder: there are still huge infrastructural developments to make it work. Until the right material technology is found we can use the experience that we gain with non-printed tags.

In order to reach the internet of things Fraunhofer wants to try to integrate tags in packaging. When people talk about RFID they often refer to the 3 cent goal for the tag, but if we look at the whole picture there are also other printing, moving and ‘sticking’ costs which all cost time money. This is why printed polymer technologies are promising. This is interesting both for putting on ‘yoghurt’ items and for integrating into packaging.

Is RFID designed to remove people from the process?

At this point there was discussion around real industry intentions, are they just removing checkout and warehouse workers. Is it about efficiency or removing people?

The response from Fraunhofer was that perhaps we are removing some ‘slave jobs’: the jobs are being transferred into IT and integration work. Fraunhofer stated that they probably cannot be addressed at the institute, that the problems were too complex.

What about embedding privacy at the hardware level?

Rob Van Kranenburg is adamant that privacy can also be a unique selling point: look at the IBM clipped tag, customers and users are less critical once they have control over it. If privacy had been considered and integrated from the very beginning, then it would be now much easier to sell RFID. Very many people are critiquing RFID now, from science fiction to art, politics, activism.

RFID cart + conveyor

In the next three years privacy will be in the centre of international attention, and even technical RFID research should engage with this.

The response from Fraunhofer was non-committal about this, it seems as if they had not fully considered the privacy issue at a hardware or software level. Overall they are not yet considering the technology at the level of culture or society, instead focusing on fundamental hardware and software problems. This seemed like somewhat of an oversight, and it could be something that they factor into their research, at least at a high level.

Thanks to Susanne Ackers and Francis Hunger for the excellent realtime translation.

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  3. FoeBud: How we learned to stop RFID FoeBud are a German group of privacy activists that has has a long history of public interventions in privacy and RFID. Rena Tangens and Padeluun presented their work at the recent workshop How I......
  4. Rob van Kranenburg at ‘How I learned to love RFID’ On the 20th May, Rob van Kranenburg talked at How I learned to love RFID in HMKV in Dortmund, Germany. This is a short summary of a huge presentation on RFID issues, that covered......
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One Comment

  1. arun
    Posted 3 April 2007 at 17:49 | Permalink

    I am doing my masters in industrial engineering, I am planning to do my project on implementing RFID in warehouse for high value items. Its going to be closed loop. I want to know whether it is feasible to do. and whatwould be the benefits to the company for implementing it?

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