RFID: Hospitality's Untapped Tool

By Glenn Withiam, Director of Publications, Cornell Center for Hospitality Research | September 26, 2011

Once an expensive and esoteric technology, radio frequency identification tags (RFID) are now priced modestly enough for wide application across a rage of industries. According to an expert in the field, the technology has application beyond tracking packaged goods and may well make its way into such service industries as hotels and restaurants. In a keynote speech at QUIS 12 (a global service improvement conference held at Cornell University) MIT professor Sanjay Sarma, credited with the development of many of the standards and technologies that form the foundation of commercial RFID, explained the potential for the technology’s use in both goods and in services.
 
For retail goods vendors, the uses for RFID are relatively straightforward. Each unique RFID tag can be affixed to an item when it’s manufactured. With a tag reader, you can read the tag at some distance, even as the items are gathered in packages or boxes at distribution centers or warehouses. The core concept is to deliver the appropriate inventory to the correct store at the correct time. By tagging each individual stock item, a company can keep track of exactly where its items are located in the distribution chain. This is currently a task that involves substantial personnel, and it is subject to considerable error, as well as the deliberate misappropriation of stock. Additionally, the distribution process has a high level of inefficiency. To ensure that stockouts do not occur, vendors maintain considerable inventory in the pipeline, which represents considerable carrying costs. RFID offers the opportunity for greater control over distribution logistics.
 
The question for service and hospitality businesses is whether and how a technology of this kind can help improve operations or cut costs. Inventory tracking is only one use for this technology, since it can be used to locate and identify any item or even an individual. If a restaurant manager had an RFID tag on each item, the manager would have a continuous, real-time record of inventory. While you still might want to conduct a visual inspection of the walk-in cooler, the assistant manager who conducts that inspection might be able to do it more efficiently. Overstocks or stockouts would be quickly identified, thereby allowing the chef to make the necessary changes to the menu.
 
Sarma also suggested ways that RFID might be helpful for hotels: what he terms “smart infrastructure.” In addition to automatically taking inventory, he envisions RFID readers on “smart carts,” baggage tracking, and employee check-in. RFID sensors could even be used to identify water leaks, check HVAC and utilities controls, set heating and cooling triggers based on occupancy, or automatically operate hallway lights, blinds and screens.
 
I doubt that we will label our guests with RFID any time soon, but RFID key tags could enable many of these “smart infrastructure” events. Certainly tagging luggage would be most useful in allowing airlines and hotels to better control the identification of bags as they move through the travel system.
 
While most of the current applications involve back-of-house operations, Sarma reminds us that once a technology is available, we find ways to use it, and it will change the way we do things. Certainly cell phones and now smartphones have changed how we behave and in some ways have remade the landscape; when’s the last time you saw a telephone booth? The uses for smartphones have grown substantially in a relatively short time. RFID has the potential to likewise remake the distribution system for packaged goods distributors, and we will undoubtedly find additional ways to use it to streamline and eliminate error from service processes.
 
Glenn Withiam is the director of publications for the Cornell Center for Hospitality Research. To download complimentary copies of any of the research reports from the Center for Hospitality Research, visit www.hotelschool.cornell.edu/research/chr

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