Philips and IBM join forces to pilot RFID

IBM and Philips are combining forces in the RFID (radio frequency identification) arena, with a view to cutting operational costs, boosting profitability and thus adding competitive edge for users. The move comes as RFID technology begins to move rapidly from the early adopters age to mainstream over the next year to 18 months. Key targets are systems for supply chain management, retail and asset and product tracking and management. First joint project, already underway, is to kit Philips Semiconductors division plants in Taiwan and Hong Kong with an RFID solution to improve its manufacturing and distribution supply chain operations, with inventory management and control, as well as to improve customer satisfaction. In a first step, wafer cases and carton packages will be tagged at Philips Semiconductors Kao Hsiung manufacturing site in Taiwan and the division’s distribution centre in Hong Kong. The project started in November last year, and will go fully live during 2004. As Philips extends its RFID business from early adopters to the mass market, its business is rapidly moving towards large-scale projects that require global reach, an expertise in project management and system solutions. By partnering with IBM, Philips says it expects to move beyond delivering its expertise and RFID chip offering, and move towards integrated end-to-end solutions for retailers, consumer goods manufacturers and logistics companies. “Our relationship with IBM will mean stronger time-to-market, improved customer confidence levels and the opportunity to leverage each others’ brands and expertise,” says Scott McGregor, president and chief executive officer, Philips Semiconductors. “We are committed to helping companies boost levels of advanced product tracking and inventory control, as well as developing an end-to-end assessment of the specific costs and benefits in adopting RFID and smart card technology within their business processes,” says Terry Hopkins, vice president, wireless e-business, IBM Global Services. “We are confident that the deployment of our joint solutions will reduce operational costs, increasing profitability and providing a competitive advantage for our customers,” he adds.