Companies that have already undertaken trials of radio frequency
identification tags must release their findings, delegates at
London conference are told
Radio frequency identification (RFID) can transform supply chain
management, reduce errors and cut fraud, but its widespread
deployment is being held back by the secrecy surrounding commercial
trials by early adopters, a leading analyst has warned.
If the technology is to proliferate rapidly, RFID trailblazers
should be prepared to reveal the results of their pilot studies,
Nigel Montgomery, director of European research at analyst firm
AMR, told delegates at last week's RFID ROI conference in
London.
He said lack of reference material from early implementations would
be a barrier to RFID adoption. "Unless companies open up and become
more honest, this area of technology will always be held back," he
said.
Montgomery urged pioneers to answer questions such as, "What was
the cost of the project? How long did it take?" and "Did you spend
money on an implementation knowing you would not get a return for a
considerable time?"
But he accepted it was "challenging" for companies to disclose
their return on investment for competitive reasons.
Wal-Mart has already gained unexpected benefits from its RFID
trials, according to analyst firm Gartner, which was recently
briefed by the supermarket.
John Davison, vice-president and research director at Gartner, said
the pilot identified an inefficient stock replenishment process in
stores trialling RFID. Having traced where process inefficiencies
were encountered, Wal-Mart could make changes across stores not in
the pilot.
Davison added that Wal-Mart was unlikely to reveal many other
lessons from the pilot.
In addition to Wal-Mart's pilot scheme, RFID has been tested in
projects by businesses ranging from its rival Tesco to Boeing and
Airbus, to consumer product giants such as Procter &
Gamble.
Leader >>
The big players that are leading the way with RFID
implementations
Wal-Mart
Wal-Mart asked 100 of its
leading suppliers to link into its RFID infrastructure by January
this year. Gillette, one of its key partners, met the deadline by
using EPC RFID technology to uniquely identify cases and pallets of
razors, shaving cream and toothpaste.
The tags carry five pieces of information, including the company
code, product code and item serial number. Gillette uses
EPC-enabled middleware from OatSystems and an integration layer
based on technology from Sun Microsystems.
Procter & Gamble
The consumer goods
manufacturer is using RFID to distinguish genuine from counterfeit
products and to identify and recall outdated products. It is also a
Wal-Mart partner and became an early adopter of RFID technology to
integrate with Wal-Mart's supply chain.
Tesco
Tesco is rolling out RFID
technology across its store network in the world's largest single
order for Electronic Product Code (EPC) RFID readers. ADT will
provide more than 4,000 readers and 16,000 antennae by autumn 2005.
The project will eventually cover 1,300 Tesco stores and 35
distribution centres. Tesco is also rolling out RFID technology
from OatSystems to 100 of its largest stores. A full roll-out
across the rest of the group will be completed over the next three
years.
Metro
Metro, the world's third-largest
retailer, has announced the successful implementation of RFID
readers and tags at its biggest German distribution centre. The
centre in Unna uses Intermec IF5 Intelligent RFID readers and tags.
Metro has so far "read" 50,000 pallets of goods and is experiencing
99% successful tag read-rates.
Boeing and Airbus
The aircraft
manufacturing firms are poised to issue joint RFID specifications
to suppliers during the first half of this year to spell out
technical standards for frequency, memory capacity and size of RFID
tags and labels. The rival aircraft companies said they had 70% of
their 3,000 suppliers in common, and that suppliers should be able
to RFID tag parts within six months of getting the
specifications.
2005 looks set to be the year of
RFID
There will be a surge in RFID use during 2005, with billions of
RFID tags being commissioned, according to the latest predictions
from Deloitte Touche Tohmatsu.
Deloitte urged businesses to consider using RFID beyond basic
tracking applications. RFID can also be used in healthcare (for
monitoring patients), construction (for managing projects and
equipment) and transportation (for monitoring baggage and
passengers in airports) according to Deloitte.
"RFID is a transformational technology that can help to reduce
waste, manage inventory and streamline logistics," it said.