Jan. 24, 2008 – Gareth Walter, from the Colorado company SkyeTek, spends most of his time working with creative, embedded RFID projects and ideas.
What is SkyeTek working on in terms of product authentication?
Walter: The thing we looked at in the beginning of 2007 was this idea that counterfeits, generics and substitutes really cost the world as a whole, and the global economy something around 600 billon dollars. We thought. ‘How can we use RFID to start helping companies reclaim some of that lost revenue, some of the deteriorated brand and so forth?’
Do the companies who are affected by this often think of RFID on their own as a solution?
Walter: They don’t. I think, in general, people don’t know it exists.
They use holograms or holographs or something along those lines in order to address this. They may use tracking solutions that are more traditional, like product seals or something like that. If a seal is broken, then we know that it has been tampered with. So, it is more about the packaging and not about the functioning of the underlying device.
Do you see product authentication being able to work without a complete retail infrastructure everywhere, or can it be done in specific cases?
Walter: A great question. We actually have built it in a closed loop scenario. And sometimes product authentication works best there because the manufacturer of the device actually wants to control it.
Say I am a printer manufacturer. I want to make sure that you are using authenticated print cartridges every single time, because that is where I make my money. So, in that scenario, we use RFID because this printer can't operate without an authenticated tagged cartridge. As the manufacturer, the best way is to tag all authenticated cartridges, and then even if somebody tries to duplicate it or clone it with a tag, they are not going to know my special fingerprints. They are not going to know if I encrypted it with a certain after-marketing encryption algorithm, or so forth. They are not going to know the codes.
You are raising the bar way up.
Walter: Yes, exactly.
Is it at the store level that you are checking these?
Walter: It is actually at the operation of the printer itself. So, the idea being that the printer won't even function unless it has an authentic cartridge inside of it.
As the product manufacturer, let's say of a laser printer, you need to have a full fledged reader within the product, a product you are essentially giving away to the consumer. Will the reader chip suffice to serve this purpose?
Walter: I think people have been trying to approach it with just an IC instead of a full reader. What we find is that you still need connections to the printer itself. You need to be able to basically send tagged commands. And so a reader module, something that is more finished in terms of the whole package, plus a small CPU in order to run the algorithm and everything else, is required.
We are seeing reader modules, not necessarily ICs, and not necessarily finished readers, but something that is right in the middle and easy to embed into the product. And literally, depending on what you are looking for in terms of UHF or HF, the price could vary between anywhere from $30 or $25, all the way up to about $200.
Between $25 and $200 for a reader module that might serve this purpose?
Walter: Exactly. What we have done with a lot of our customers is a break-even analysis. Basically, how much does your consumable provide you in terms of profit? Therefore, how many of these consumables would you have to protect from a counterfeit being used?
Say I make a profit of $10 per consumable, then I need to basically stop or prohibit 10 of them over the life of a single product in order to make it worth my while if the reader is $100.
Let’s talk about “embedded.” SkyeTek has been promoting the concept of adding value-added to the products of manufacturers of every stripe. What is going on in that market?
Walter: I will give you a little bit of a context in history first. When everybody was talking about the Wal-Mart initiative and supply chain, when they were zigging, we were zagging. We decided why not put readers everywhere? Instead of the $5,000 dock door reader, why not make a very tiny reader that can virtually go anywhere. at the cost that allows people to put them virtually anywhere.
So, that is when the genesis of this embedded RFID concept came about. Whether or not you are manufacturing a refrigerator or you are manufacturing a shelf or a medical device, virtually all of those can add RFID as a feature to their existing product line, so that they gain the benefits of RFID.
What was the first company that you worked with? What kind of products did they have and how did they use the embedded?
Walter: Well, a good example might be TioMed. TioMed makes a blood analyzer of sorts, something that ensures an accurate safe blood transfusion every time. They have an interesting approach.
If 10,000 people receive incorrect blood transfusions every year, you have got a serious problem on your hands. So, why not automate that process. Small readers validate the blood type on a patient’s wrist, validate the blood type in a bag and then match them up before authorizing a blood transfusion.
Is this something they are approaching because it is smart to do or are they are competing against other companies that have similar devices?
Walter: I can't speak for the company itself, but they are looking at it as a differentiator. It allows them to say ‘this is much safer’. They get to deliver on the promise to the industry and to the patient at the end of the day.
This allows them to deliver on that mission better than anybody else could. Because it automates the process of what used to be a manual process, it also speeds up the process.
