TIPP Offers Many Pros, Some Cons for Retail Industry

March 18, 2015 Larry Arnstein

TIPPimage

The January 2015 publication of the Tagged Item Performance Protocol (TIPP) by GS1-US is a key milestone in the mainstream adoption of RAIN RFID for retail applications. TIPP’s goal is to help the industry achieve global scale by providing a better way for retailers and their suppliers to manage RFID tagging requirements—and it’s not a moment too soon. With billions of tagged items already in the global apparel supply chain, the industry is looking for solutions that drive quality up and costs down.

As a key contributor to the development of TIPP, Impinj offers the following assessment of the program as it stands today, notes about its future potential, and suggestions for the industry to successfully use TIPP.

To enhance scalability and address issues with the current inlay-approval methods for managing the supply of RAIN RFID tagged products, TIPP defines a set of performance grades that retailers use as part of their tagging requirements in negotiation with suppliers. Here are some of the issues with inlay approval methods and how TIPP helps:

  1. Limited Accountability. Under the inlay-approval method, retailers have little recourse when RFID performance issues arise. Suppliers, including manufacturers and brand owners, are considered to be in compliance as long as they use an inlay from the retailer’s list. But that is not sufficient to assure end-use performance. This problem was solved in the barcoding world through a grading system (see ISO standards) that has nothing to do with which paper, ink, or printer the supplier uses to produce the barcode, as long as it meets performance requirements. TIPP does for RAIN RFID what ISO grades did for barcodes—it provides accountability for what matters to the retailer—performance, while suppliers get flexibility to optimize their production process. TIPP simplifies integration of RAIN RFID tagging requirements into the normal trading relationships between retailers and their suppliers.
  2. Incompatible Requirements. Under the inlay-approval method, every retailer has to determine whether or not each inlay on the market performs acceptably in the retailer’s applications for a wide variety of product categories. For help with this challenge, retailers turned to a mixture of consultants, tag or inlay providers, academic institutions, and private testing labs. These often opaque methods led to incompatible requirements, making it difficult for suppliers to simultaneously meet the needs of multiple retail customers. The consequent customer-specific tagging raised costs and slowed innovation. Furthermore, keeping inlay approval lists up to date is slow and expensive and inhibits adoption of new and better tagging solutions. TIPP allows suppliers to find commonality across requirements from multiple customers, and places a premium on quality, service and innovation in the value chain. And it also empowers third parties and solution providers to contribute to the success of retailers and suppliers.
  3. Variable Performance. A RAIN RFID inlay interacts with merchandise or packaging in ways that can affect performance. As a consequence, when a retailer approves an inlay based on lab testing on representative merchandise, there is no assurance the retailer will see similar performance on real merchandise. Furthermore, the third parties providing the testing services might not guarantee field performance. From a RAIN perspective, not all denim is the same, not all tag stock is the same, and not all polybags are the same. By taking responsibility away from suppliers, retailers end up with a wide range of outcomes on the shelf. With RAIN RFID, saying that an inlay is good for denim or plastic has little meaning. It is the performance of each tagged item that matters. Under TIPP, performance is only defined after the tag is applied to the item. It is invalid to say that a tag or inlay meets a grade—only a tagged item can meet a grade.
  4. Variable Quality. When a supplier is only responsible for using approved inlays, they are likely to choose the least expensive inlay on the list. But testing labs only test representative samples and cannot guarantee ongoing quality. The result is a perverse incentive for inlay providers and suppliers to drive down the costs of approved inlays regardless of quality. Operating under TIPP, a supplier must deliver reliable tagged-item performance on an ongoing basis, which requires the supplier to seek value and innovation rather than focusing solely on price. Suppliers will seek providers that offer guarantees and services to protect the supplier from customer issues and even charge-backs, driving quality up and costs down at the same time.

TIPP has two main elements: The first is a well-defined and repeatable test process to determine if a tagged item meets a specific performance specification, called a “grade.” The second is an extensible set of grades that retailers can use to specify performance requirements for tagged items.

A temporary limitation of TIPP is that the initial set of published grades focus on handheld reader use-cases and do not support always-on, overhead reader scenarios important for omnichannel, EAS, and analytics applications. In addition, reliance on one specific grade, called M20D, should be avoided in most cases. M20D is a legacy grade that requires inlay manufacturers degrade overall performance of the tagged item to accommodate poor-performing readers. M20D will tend to require either larger or otherwise specialized tags. The community must work quickly with GS1 to develop TIPP grades that support advanced use cases and contemporary reader systems. If you are interested in discussing always-on solutions or tagged-item performance, please contact Impinj to understand your options under TIPP. Impinj will work with the community to highlight these issues and introduce new grades with a view toward always-on reading and the best-performing tags.

Retailers embracing TIPP have other things to consider, including the standard of evidence that they will require when a supplier says that a particular tagged item (a SKU) meets a grade. That standard of evidence may be less for trusted suppliers or trusted inlay manufacturers than for newcomers. Retailers also have to determine how to define and measure quality. For example, how many tagged items shipped are allowed to miss a grade and by how much? And can retailers and suppliers monitor and audit incoming merchandise? All these questions can be answered through private trading relationships, technology and innovation. Recognizing these needs, Impinj has developed a set of products to increase speed and reliability of the tag commissioning and encoding process and for verification of tagged-item performance and data integrity throughout the supply chain.

The introduction of TIPP is a sign of a healthy, growing RAIN RFID market. TIPP puts accountability between retail trading partners where it belongs, allows suppliers to better serve their customers and places a premium on quality, service, and innovation. Most importantly, it lays the groundwork needed to support global RAIN RFID deployments.

Contact Impinj to learn more about TIPP and RAIN RFID solutions.

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