Solving the New Technology Requirements for RFID Business Applications:

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How Laser Printing Technologies are Adding ValueTo an Evolving Business Landscape

Contents2 Abstract

3 RFID Changing Output Requirements

4 About RFID

6 RFID Applications

9 Challenges with Existing Solutions

10 Benefits of Laser RFID Printing

13 Future of RFID Technology

14 Concluding Summary

15 About Lexmark

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Abstract:

Solving the New Technology Requirements for RFID Business Applications:

How Laser Printing Technologies are Adding Value To an Evolving Business

Landscape

Fortune 500 businesses across many different industries are now looking to

RFID (Radio Frequency Identification) technology to transform the way they

conduct business. From streamlining supply chain operations, patient safety,

improving production and preventing counterfeiting, to tracking and managing

documents, RFID is changing the business landscape in many ways.

RFID technology brings a “historical” shift to the business workplace. The ability

for RFID to optimize individual transactions, track documents and shipping

items, improve workflows, and eliminate “dark transaction areas” will bring

dramatic improvements to every corner of the business landscape. The

widespread adoption of RFID in both consumer and business markets will drive

greater business volumes which will lead to price reductions and allow

businesses to fulfill customer needs as never before.

This white paper from Lexmark International is intended to help today’s business

executives better understand the dynamically changing nature of RFID solutions,

and how laser printing technologies are quickly becoming a requirement for

enterprise businesses to meet their productivity and efficiency goals as they

adopt RFID into their business operations.

The Changing Output Requirements of RFID-Enabled Business Environments

Fortune 500 businesses across many different industries are now looking to

RFID (Radio Frequency Identification) technology to transform the way they

conduct business. From streamlining supply chain operations, patient safety,

improving production and preventing counterfeiting, to tracking and managing

documents, RFID is changing the business landscape in many ways.

For example, Wal-Mart has mandated that its top 100 suppliers implement RFID

tagging and tracking for all products shipped to the retailer. This innovation not

only has changed retail supply chain and product distribution procedures, but

also global acceptance of RFID. With RFID, warehousing inventory levels have

been dramatically reduced, moving instead to a significantly improved model

where goods are immediately shipped from manufacturing to Wal-Mart

distribution centers and then to the retail level.

The media has reported many benefits from these new working relationships

that will dramatically increase RFID adoption across multiple industries. By

increasing the adoption rate, the cost of entry will dramatically decrease,

making it possible for many smaller companies to afford RFID technology and

adopt it for their own business operations.

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The RFID growth trend is expected to

continue. Industry experts indicate that

the market is projected to grow at a

compound annual rate of nearly 20%

over the next six years. By 2015, the

RFID market will be valued at

approximately $26 billion.

The RFID growth trend is expected to continue. Industry experts indicate that the

market is projected to grow at a compound annual rate of nearly 20% over the next

six years. By 2015, the RFID market will be valued at approximately $26 billion.1

The Role of Printing in an RFID-Enabled World

The printing function is a critical part of the RFID process. As businesses

implement RFID technology, their printing and output needs immediately change

as well. Many of the labels, forms, and documents used to track shipments in a

multi-tiered supply chain require printers that can output forms with an embedded

RFID tag that has been encoded with manufacturer, product and serial number.

Before RFID, the printing process in a distribution center or shipping warehouse

consisted of using several printers for different types of forms and documents.

For example, RFID tags were printed on a dedicated thermal printer that was used

to print simple barcode and shipping labels. Dot matrix printers were used to print

bills of lading, packing slips, or manifests. But with new technology, the number,

size, and type of forms have changed; many companies are now realizing that

their first-generation printing solutions are no longer a viable solution to meet their

current needs. In an effort to control costs and more carefully manage both time

and resources, RFID-enabled businesses are looking for solutions that can

consolidate the work of multiple printers into a single output device.

In the 1980s, laser printing technology dramatically changed office productivity by

bringing high resolution graphic capabilities such as desktop publishing and design,

tasks previously reserved for specialty outsourced providers, to the desktop. This

same technology is now bringing new areas of efficiency, productivity, and cost

reduction to the RFID solution arena. Laser printers can not only handle the multiple

document requirements of supply chain operations, but can also perform RFID tag

encoding and print forms with a high-resolution corporate logo or graphic image all

within one device. This level of efficiency means that a single printing device can

now perform the same duties that previously required several printers.

About RFID

RFID stands for Radio-Frequency IDentification. The acronym refers to a small

electronic device that consists of an integrated chip and an antenna; one

example is as shown below in Figure 2.

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As the number, size, and type of forms

have changed as a result of RFID

implementations, many companies are

now realizing that their conventional

printing solutions are no longer able to

meet their needs.

Figure 2

1Source: Information Week, December 11, 2006,“2007 to See More RFID Adoption”

An RFID tag serves a similar purpose as a bar code on a product package, or a

magnetic strip on the back of a credit or ATM card: it provides a unique identifier

for that object. Just as a bar code or magnetic strip must be scanned to get

information, an RFID tag must also be scanned to retrieve the identifying

information on the box or item to which it is attached.

One significant advantage of RFID tags over bar codes is RFID tags do not

require line of sight to be read and do not require manual scanning. Unlike store

checkout scanners that require a barcode be swiped directly across the top of a

scanner, or a credit/ATM card that must be swiped through a special reader, an

RFID-enabled device uses passive RFID tags that can be read from up to 30 feet

away by simply walking past a scanner.

Another important advantage is that RFID tags do not need be read individually.

For example, if a grocery store used RFID tags on all its products, shoppers

could put their groceries in a bag, set the bag on the scanner, and the RFID

scanner could query all the RFID tags simultaneously, immediately total the

purchase, and provide a list of all the items in the bag.

How RFID Works

A Radio-Frequency Identification system (RFID) has three component parts:

• A transponder - the RFID tag - that has been programmed with

information

• A reader or interrogator which is connected to an antenna that

sends and receives the information

• A Data System such as a Warehouse Management System (WMS)

or Enterprise Resource Planning system (ERP)

When an RFID tag passes through an electromagnetic field, the tag is powered

on and transmits its information to the interrogator. The information is

automatically sent into the Data System.

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One significant advantage of RFID tags

over bar codes is RFID tags do not

require line of sight to be read and do

not require manual scanning.

RFID tags may be of one of two types: active or passive. Active RFID tags have

their own power source. The advantage of active tags is that they act like

beacons, broadcasting their information. The reader can be much farther away

and still pick up the signal. However, these devices have limited life spans

(though some are built to have up to a 10-year life). They are also very expensive.

Passive RFID tags do not have batteries, can be much smaller, and have a

virtually unlimited life span. They also cost substantially less to manufacture and

can be reprogrammed. The majority of the RFID tags in use today are of the

passive variety. Active RFID tag technology is still evolving and its widespread

availability is expected to increase over the next several years.

RFID Advantages

There are a variety of circumstances in which RFID tags can be easily read

where line of sight is not available. Barcodes or other optically-read technologies

under these circumstances would be useless. The advantages of RFID tags in

these situations include:

• Embedded Tagging - The tag need not be on the surface of the object

(with the added benefit that the tag is therefore not subject to wear).

• Rapid Scanning - The read time is typically less than 100 milliseconds.

• Group Scanning - Large numbers of tags can be read at once rather

than item by item, making this technology highly suitable for shipping,

warehouse or manufacturing operations.

• Varied Environments - Tags can be read under water.

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Large numbers of tags can be read

at once rather than item by item,

making this technology highly

suitable for shipping, warehouse or

manufacturing operations.

RFID Applications in Business and Industry

As RFID technology continues to evolve, the application of the technology is

enabling entirely new ways of conducting business. The examples below show

how RFID is being implemented in a variety of industries and demonstrates the

widespread use of the technology. In each instance, different types and sizes of

RFID-tagged forms are being employed.

RFID Application Examples:

• Shipping & Tracking – RFID technology has replaced the traditional

warehouse by turning trucks into rolling warehouses. Replacement

products at the manufacturing level are shipped directly to the retailer.

When the goods arrive, an entire palette of products can be immediately

scanned as it is unloaded from the trailer using RFID technology. In a

matter of seconds, each item’s manufacturer, product and serial number

are sent to the retailer’s inventory system along with the item's location

and time of delivery.

• Manufacturing – Automotive parts in a production line are RFID-tagged

and scanned as they pass by strategically-placed RFID interrogators on

the production line. These scanners can identify the stage of the work in

process (WIP) very quickly, report any problems, and tell if the process is

on schedule. The part numbers are also tracked to ensure “just-in-time”

production efficiencies from the part vendors in the supply chain. With

this real-time information the parts suppliers can tailor their shipments to

meet the automobile manufacturer’s production goals.

• Document Tracking – Critical documents such as medical, legal, or

classified government information can be embedded with an RFID tag

so the document can be tracked every time it is moved. If the document

passes through an RFID portal, the person will be prompted for

identification, such as the user’s name and ID, which is recorded. When

a building is equipped with interrogators, the document’s location can be

tracked. If an RFID-enabled document is reported missing, a complete

history of all its users can be recalled along with specific dates and all

the locations where the document has been.

• Part Usage History – The sale of heavy assets (such as construction

equipment) with re-manufactured parts is a less expensive alternative to

acquiring new equipment. The parts used in remanufactured assets can

be affixed with RFID tags, enabling their complete history to be tracked.

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If an RFID-enabled document is

reported missing, a complete history

of all its users can be recalled along

with dates and all the locations

where the document has been.

Each time work is performed on a remanufactured part, a record is made

of the location and maintenance date. This information can be used to

monitor the life cycle of the part, and can help determine when it might

be time to replace it.

• Hospital Patient Tracking – An RFID-enabled wristband for incoming

hospital patients can contain personal information, medical history and

prescribed medications, information which can be accessible and used

throughout the patient's stay in the facility. Such patient monitoring and

tracking ensures that the patient is sent to the correct operating or

recovery room, and that the appropriate medications and treatments are

being administered. As a result, the number of deaths and injuries due to

mistaken IDs are minimized, with the added benefit of fewer malpractice

suits and lower costs for the hospital.

• Inventory Management – In many industries, the process of taking

inventory can be challenging, especially if gaining access to the asset is

difficult. RFID tagging will greatly improve the process of taking

inventory. The employee will simply walk through the inventory area with

a handheld RFID scanner that reads the serial numbers being broadcast

by the RFID tags on the inventoried items. With RFID, the process of

taking inventory takes a fraction of the time it used to require using

conventional methods and is considerably more accurate.

• Product Recalls – RFID technology provides manufacturers and retailers

with highly detailed product information such as the specific manufacturing

plant where a product was produced, the lot number, item number, color,

flavor, size, model, version, etc. When a product recall is announced, the RFID

information can facilitate the tracking and specific identification of the

remaining products on the retail shelves. Rather than pulling all of the

manufacturers’ products off the shelf, RFID not only speeds up the process

of removing the affected items from the distribution channel, but also allows

retailers to safely continue selling non-recalled versions of the

manufacturer’s products that remain in their inventory.

• Theft – Consumers buying a product from a retailer at a discount and

returning it to another retailer for a higher price can mean a loss of millions

of dollars for retailers. If the product is properly tagged, the retailer will be

able to tell if the return was originally purchased from their store and for

how much. RFID will be a significant step toward eliminating this problem.

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These are just a few examples that demonstrate the broad application of RFID

and how widespread the use of the technology has become. As RFID technology

flourishes and expands into entirely new areas, businesses need to evolve their

output strategies to keep pace. In order to gain efficiencies and lower

operational costs, corporations investing in RFID must also reassess their

printing solutions.

In each of the examples cited, there are different types of forms, labels, stickers,

packing slips, manifests, and documents that must be printed. Given the range

of printing requirements associated with RFID document output, traditional

printing technologies cannot provide the capability or flexibility to handle the

scope of these printing demands effectively or efficiently.

The Challenges with Existing RFID Printing Solutions

The output generated in an RFID-enabled environment has to date been printed

on a thermal printer. This type of printer has several disadvantages when it

comes to printing all the documents, labels, and forms required to run a

business that has invested in this technology. These issues include:

• Limited Flexibility – A high volume shipping department where each

box or container must have a packing slip, and/or an RFID-encoded

shipping label and/or other forms such as bills of lading or manifests,

requires sophisticated printing functions that a thermal printer can’t

easily handle. The thermal printer is a single use device and does a great

job printing an RFID label this way, but will have a difficult time with

other documents. The high cost and intangible ROI cycle associated with

deploying multiple thermal printers around the production area increases

the overall cost of doing business.

• Higher Maintenance Costs – In a large operation such as a distribution

center that has many printers designated for individual printing tasks,

there is a corresponding cost associated with maintaining the printers.

These costs include the procurement of supplies as well as service

contracts for the required regular maintenance schedules. Because each

printer has a singular focus, such as printing a packing slip, if any of the

printers go down, the entire production process comes to a halt until the

printer can be repaired or replaced. This “down time” adds cost; and the

resulting dip in productivity can add up to significant losses.

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The high cost and intangible ROI

cycle associated with deploying

multiple thermal printers increases

the overall cost of doing business.

• Difficulty with Wide Formats – Thermal printers were originally

designed to print on small formats such as shipping labels and pick

tickets. For larger-size documents, such as 8.5 x 11 or 8 x 14 inch output,

thermal media would be cost prohibitive. The thermal printer is dedicated

to a single printing task, and is unable to work with multiple forms without

the time-consuming manual process of changing the media.

• Proprietary Data Streams – Some thermal printers may use complex

proprietary printing languages that make the integration of enterprise

business information from an ERP system or database difficult and time

consuming. When business needs change and warrant the integration of

new information on the media, the task of modifying the proprietary

printing languages may result in long development cycles and

disruptions in business processes. In many instances, the unique data

stream may have been developed several years ago and the programmer

who originally wrote the code may have left the company or be otherwise

unavailable to perform the required updates or modifications.

• Output Quality – Since thermal printers may print in lower resolutions,

203-305 dpi (dots per inch), this lower quality output can cause

problems when it comes to reading bar codes. If there is a problem with

the print head, the bar codes can also be unreadable. Logos or other

graphic designs can be hard to read using low dpi. In addition, since

thermal transfer printers use ribbons to transfer the image to the label,

the labels they create can possibly wear poorly and may be vulnerable to

smearing and distortion when exposed to inclement weather or to the

wear and tear of the shipping and delivery cycle. Direct thermal labels

may also fade when exposed to ultra violet rays and/or heat.

These limitations point to the need for a new printing solution to support RFID

environments. Just as in the past laser printers became the solution for similar

process and productivity problems in the office arena, laser printers now have

come to the rescue again to streamline RFID-enabled environments in industries

that are incorporating RFID technology.w

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Just as in the past laser printers

became the solution for similar

process and productivity problems

in the office arena, they now have

come to the rescue again to

streamline RFID-enabled

environments in industries that are

incorporating RFID technology.

The Benefits of Laser Printing in an RFID-Enabled Environment

The benefits of laser printers — higher productivity, device consolidation, forms

management, better print quality, lower costs, and networking capabilities — are

now being applied to the RFID-enabled business environment. The specific

benefits that RFID-supported laser printing delivers to today’s businesses include:

• Device Consolidation – With the built-in features of network capability

and multiple output trays, laser printers in an RFID-enabled environment

allow several work areas to share one single printer. For example, in a

warehouse operation with several shipping lanes, multiple employees

can share a common printer for all their form and label needs.

Conducting all tasks using one printer leads to fewer maintenance

contracts, lower maintenance and supply costs, and a higher ROI.

• Forms Management – With the multiple input trays available on a laser

printer, one device can accommodate several types of forms, labels, and

RFID tag embedded media. Lexmark offers a laser printer that has a built-

in RFID tag encoder which can encode shipping information onto the

Lexmark RFID tags as part of the printing process. With this new

capability, a laser RFID printer can program, verify and print embedded

RFID media, as well as all the other documents required to ship a product.

(See printer Figure 4 below.) This makes the laser a true multi-use printer.

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With multiple input trays, one laser

device can accommodate 8.5” x 11”,

or 8.5” x 14” documents, and RFID-

ready forms.

Figure 4 - Lexmark T640rn Laser Printer with an Integrated RFID Encoder

• Ease of Use – Lexmark’s electronic forms package can design and store

various form layouts in the printer. This allows businesses to make

design changes to forms that are stored online, for example, modifying a

field on a packing slip or including a corporate logo on a shipping label.

The software can also work with a variety of label and document sizes

from small to legal size, easily accommodating multiple bar codes and

RFID-tagged media.

• Standard Printer Languages – Rather than work with a proprietary

printer language that is hard to modify and integrate, most laser printers

work with standard printer languages such as PCL, PostScript™ or plain

ASCII that allow easy data integration with enterprise applications,

databases, and business information. Using the standard printer languages

allows Lexmark's forms software to easily modify and design new forms

that are then mapped to the data stream. These new forms can be stored

on the printer or a server.

• Superior Mean Time Between Failures (MTBF) – With a 20-year

history of printer engine advancements and design, laser printers have

demonstrated a proven ability to meet the challenge of high volume

output with a minimum of problems. This makes laser printers highly

suitable for the rigorous printing demands of a high volume distribution

center or manufacturing production line without risking a significant

amount of downtime.

• Forms Consolidation – Using Lexmark’s forms package, it is easy and

very cost effective to print a shipping label and a packing list on an

integrated label form. This eliminates the ordering and storing of pre-

printed forms.

• Better Graphics Capabilities - Most laser printers today work at 1200

dpi, which is superior output quality over the 305 dpi of a thermal printer.

This provides a higher quality form or label that improves bar code

readability. If a corporate logo or graphic image needs to be included on

the form or label, the higher resolution also projects a more professional

brand image.

• Media – Not only can a Lexmark laser printer print and program the RFID

media, but it is flexible enough to print on several different types of

media. The printer can print on paper, vinyl labels and carbonless paper,

as well as on many other types of media.

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Lasers provide the most viable,

efficient and cost-effective manner

possible of using a multi-use printer

within an RFID-enabled enterprise.

These considerable benefits demonstrate why laser printers are having such a

significant impact in supporting and streamlining RFID technology in today’s

rapidly evolving business environment. As the proliferation of RFID deployments

grow, the addition of laser printers enables businesses to accomplish all their

printing needs, including the encoding of RFID media. Lasers provide the most

viable, efficient and cost-effective manner possible of using a multi-use printer

within an RFID-enabled enterprise.

A Look into the Future of RFID Technology

As RFID continues to evolve and flourish across many industries, laser printing

technology will continue to play an important role by increasing workgroup

productivity and driving down the operating costs associated with RFID technology.

But where is the technology going and what does the future of RFID look like?

There are three dynamics taking place in the RFID Industry that will reshape

how the technology will be used that in turn will lead to greater adoption of the

technology: size reductions, lower costs, and innovative applications.

Size Reductions

RFID readers are being reduced by considerable margins. Key manufacturers

such as Intel Corporation® are announcing chipset size reductions of 90%.

These reductions will have a dramatic impact on the cost and the future design

of tags and readers. These innovations translate into wider adoption and a

greater number of RFID applications around the world.

Lower Costs

As more companies adopt RFID technology, additional tag manufacturers will

appear on the scene that will ultimately drive increased competition and

drastically decrease the cost of tags. For example, the cost of an RFID tag has

dropped from over $1.00 less than one year ago to under $.15 today. As the cost

of RFID tags (and their consumables) rapidly decline, the implementation of RFID

becomes more cost effective. As another example, RFID interrogators that used

to cost approximately $2000 are now available in the $700 range.

Innovative Applications

As the printing and encoding of RFID tags improves and the per unit price drops,

new uses for RFID will be developed. One example is called a “Smart Shelf”,

which is the nickname for a designated retail merchandising area that has been

entirely enabled for RFID. The Smart Shelf would incorporate one reader and

several interrogators. The reader could read the tags of any product on the

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The cost of an RFID tag has dropped

from over $1.00 less than 12 months

ago to under $0.15 today.

merchandise shelf. When an item is lifted off the shelf, this information is recorded

and allows the clerk to see there is a missing item that needs replenished. This

will greatly reduce the number of out-of stock issues and increase overall sales.

Concluding Summary

RFID technology brings a “historical” shift to the business workplace. The ability

for RFID to optimize individual transactions, track documents and shipping

items, and improve workflows will bring dramatic improvements to every corner

of the business landscape. The widespread adoption of RFID in both consumer

and business markets will drive greater business volumes which will lead to

price reductions and allow businesses to fulfill customer needs as never before.

Unfortunately, conventional printing technologies that are supporting existing RFID

implementations have held businesses back from fully realizing the fulfillment of

the technology. RFID laser printing brings the same level of revolutionary change

to the RFID arena that conventional laser printers brought to the office

environment in the 1980s. As a greater number of RFID tags find their way into

manufacturing, retail or other industry environments, RFID-enabled laser printers

will be essential in facilitating the productivity vision of RFID in the workplace.

In addition, with new levels of ease-of-use, more productive capabilities, and

smoother workflow processes, RFID laser printing will make the integration of

RFID technology into the business workplace much more viable. As RFID-

supported laser printing becomes more pervasive across the enterprise, the

technology will be an essential element in propelling RFID solutions forward.

Incorporating laser printing technology into the RFID process further enables the

fulfillment of RFID, by providing the following benefits:

• Improved Efficiencies – A single laser printer can reduce the number of

devices and forms required to produce business documentation. With

multiple-use drawers that can house a variety of forms, labels and

documents, both manufacturers and retailers will be able to accomplish all

of their tagging, labeling, and forms management from one printing device.

• Greater Capabilities – RFID laser printing means businesses can make

design changes to an existing packing slip or manifest both quickly and

easily without incurring any disruption to the sales, manufacturing, or

distribution process. In addition, the high resolution capability associated

with laser technology generates more professional-looking RFID

documents across a wider variety of business applications.

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RFID laser printing technology brings

the same level of revolutionary

change to the RFID arena that

conventional laser printers brought to

the office environment in the 1980s.

• Device Consolidation – Consolidation enables a greater variety of RFID

printing tasks to be accomplished on fewer devices, thereby allowing a

greater number of users to have access to the device to fulfill all their

form, label, document printing, and RFID tag encoding needs.

• Lower Cost of Operation – RFID laser printing provides lower

acquisition, supplies, materials, and maintenance costs, lowering the

total cost of business operations.

For more information about Lexmark’s RFID solution, log onto www.lexmark.com/RFID or contact Rick Kallop, Lexmark RFID + Certified Industry Consultant at rkallop@lexmark.com.

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About LexmarkLexmark International, Inc. (NYSE: LXK) makes it easier for businesses and consumers

to move information between the digital and paper worlds. Since its inception in 1991,

Lexmark has become a leading developer, manufacturer and supplier of printing and

imaging solutions for customers in more than 150 countries.

Lexmark's enterprise sales force is organized into industry-specific vertical teams that

identify the unique challenges of each major industry in terms of output and workflow

processes. Our solutions and customer-focused approach is what makes us different in

the market, but our award-winning products are at the heart of our business. Lexmark

is the only printer manufacturer that internally develops and owns all three core print

technologies in the market. We pride ourselves on understanding our customer's specific

needs and developing innovative solutions to meet those needs.

Lexmark’s state-of-the-art RFID T640rn laser printer is the only laser based printing

technology on the market today. The Lexmark T640rn is a networked monochrome laser

printer that can print and program RFID tags embedded within electronic forms and that

can be customized with Lexmark's Document Solutions Suite (LDSS) to simplify business

processes. The T640rn can print up to 8.5-by-14-inch paper at resolutions of up to 1200

by 1200 dots per inch and encode RFID tags. For more information on the T640rn laser

printer for RFID applications, as well as other Lexmark printing solutions, please visit our

website at www.lexmark.com\RFID.

Lexmark reserves the right to change specifications or other product information without notice. References in thispublication to Lexmark products or services do not imply that Lexmark intends to make them available in all countriesin which Lexmark operates. LEXMARK PROVIDES THIS PUBLICATION "AS IS" WITHOUT WARRANTY OF ANY KIND,EITHER EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR APARTICULAR PURPOSE. This publication may contain third party information or links to third party sites that are notunder the control of or maintained by Lexmark. Access to any such third party information or site is at the user's ownrisk and Lexmark is not responsible for the accuracy or reliability of any information, data, opinions, advice orstatements made by these third parties. Lexmark provides this information and links merely as a convenience and theinclusion of such information and/or links does not imply an endorsement. All performance information wasdetermined in a controlled environment. Actual results may vary. Performance information is provided "AS IS" and nowarranties or guarantees are expressed or implied by Lexmark. Buyers should consult other sources of information,including benchmark data, to evaluate the performance of a solution they are considering buying.

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