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.
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The big players that are leading the way with RFID implementations
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 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, 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.