RFID growing fast and in unexpected quarters

Manufacturing businesses getting payback from their RFID (radio frequency identification) implementations are getting much of their benefit indirectly. And RFID applications, not just pilot projects, are in steep growth mode. So says Dr Peter Harrop, chairman of IDTechEx, which has accumulated a database of more than 1,000 case studies of RFID in action. “The numbers of RFID systems sold in the last 10 years will be sold in the next year alone,” he says. He sees the US leading, followed by Britain, then Germany, Japan, china and Korea – the latter few catching up fast. Looking across the case studies to date, Harrop suggests paybacks are mostly within one year, and some claim return on investment in just a few months. “The biggest beneficiaries are those that change their business processes. And many go into their pilot looking for one payback, but find another from less obvious quarters.” He cites the example of Scottish Courage, an early adopter that found, through RFID tagging, that around 8% of its kegs were being used to transport and store others’ beers, transgressing contractual agreements. Tightening up on that cut costs but also expanded sales. Harrop agrees that most supply chain tracking and management activity – apart from that governed by legislation – will be at the pallet level, followed by the item level unless item value is high enough. “RFID is now so ubiquitous that few participants know of all the activities in their chosen application, let alone the reasons behind their success or failure. As our database progresses rapidly to 2,000 case studies, clients find it invaluable for answering a wide range of questions, from ‘What is going on in my country?’ to ‘What are the most popular frequencies?’ and ‘What has that supplier done before?’.” He also says that his organisation’s ‘knowledgebase’ is showing useful trends. “For example, failures today are less likely to be due to lack of standards or equipment not working. It is more common to see the funding company say ‘The trial was successful, establishing a good payback, but funds are not available for a full rollout’.” Another common reason for stopped projects, he says, is failure to link to legacy systems, often because the difficulty is underestimated. And he adds: “We find that active RFID tags are far more popular than is commonly realised. We already have over 150 case studies on these, and many are both large and lucrative. Surprisingly, most are not at long range.”