IBM is to expand its services for companies working on
RFID technology.
It has developed RFID services for large-scale industrial
companies - including the automotive, aerospace and defence,
manufacturing, chemicals and petroleum, forest and paper and
electronics industries - and for mid-market companies, which it
defines as those with fewer than 1,000 employees.
The services include consulting, development of a business case,
technical proof of concept, pilots for the client and trading
partners and full system implementation.
IBM's decision to extend its RFID services is a response to
rising demand, said Eric Gabrielson, IBM Global Services' RFID
vice-president.
In the industrial sector companies are exploring RFID not just
to comply with mandates from government agencies and partners
requiring them to adopt the technology, he said.
"They are doing it also for a number of other [internal
reasons], such as improving their business processes and enhancing
their collaboration with customers," Gabrielson said.
That is the case at Heinz, which recently began looking into
RFID and has hired IBM to assist in the venture.
"We are using IBM to build our RFID business case, to see how it
looks from today to 10 years out: where we can see some benefits,
where we can see some cost offsets and where we can roll out the
project from slap-and-ship, which is the 2005 retailer mandate, all
the way out through tagging items in a production environment,"
said Doug Ostrosky, Heinz's RFID program manager.
For now, Heinz is focused on getting a pilot project up and
running. The company hired IBM in June to help with testing
products, drafting a business case and the actual set-up of the
pilot facility, Ostrosky said.
So far Ostrosky has been happy with IBM's service, particularly
its honesty about the technology, he said. "If they do not know an
answer, they do not make it up. They find the right source, ask the
right questions and come back with the most honest answer,"
Ostrosky said.
And some problems do not have a definitive answer in the RFID
world yet, including the technology's acknowledged difficulties
with products containing certain materials and packaging. One such
case is Heinz's flagship ketchup product and its containers,
Ostrosky said.
"We have a liquid product in a sometimes glass or plastic
container with metal or plastic lids and that, for some reason,
does not lend itself to 100% [RFID] readability all the time. It is
not an IBM issue. That is just the physics of it, so that is
something we are trying to work through," he said. "For our
product, the technology still is not where we would like it to
be."
Meanwhile, mid-market companies see RFID adoption as an emerging
requirement and do not want to be left behind, as is the case of
Kayser-Roth. The clothing manufacturer is not one of Wal-Mart's 100
largest suppliers, and as such was not among those the retail giant
said had to become RFID-compliant by January 2005. Nonetheless,
Kayser-Roth volunteered to meet the deadline.
"We want to meet Wal-Mart's requirements and ship cases and
pallets with RFID tags," said Gary Stegall, senior project manager
at Kayser-Roth. "That is how we got started in this project and how
we started looking for suppliers that could support us in this
venture."
The venture involves RFID-enabling a Kayser-Roth distribution
center as a pilot project. "Our goal is to use IBM to help us get
this first pilot off the ground and then enable the rest ourselves
as we need to," Stegall said.
Still, initially IBM almost lost the Kayser-Roth business
because IBM's offering was aimed at companies that were much larger
than Kayser-Roth, Stegall said. But IBM adapted its offering for
the mid-market.
"They came back with a solution to meet our needs as a
mid-market company. When they presented us with this solution, it
was exactly what we wanted, very well priced and we were very
pleased with it," Stegall said.
Juan Carlos Perez writes for IDG News Service
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