Here's looking at RFID

commentary RFID is moving from a much-talked about technology to a much-used technology, with many companies about to share RFID trials.The last 12 months or so has been an interesting outing for RFID.



commentary RFID is moving from a much-talked about technology to a much-used technology, with many companies about to share RFID trials.

The last 12 months or so has been an interesting outing for RFID. For a technology that has been working fairly innoculously for many years now -- on electronic toll gates and even on pets -- it was suddenly elevated to notorious status when companies started finding new uses for the technology, such as supply tracking in the warehouse.

As you probably know, the controversy came about when the idea was floated of chipping products on retail shelves and tracking their use after they have left the store -- obviously this would have serious privacy concerns for consumers. For a while there if a company said it was looking into using RFID, it was perceived that the company was engaging in unscruplous acts to invade the privacy of unsuspecting consumers.

Fifty percent of the companies surveyed said they will conduct [RFID] pilots this year and 30 percent said they were conducting pilots right now.
Since then, however, most of that controversy has died down but that notoriety marked a new era of RFID -- it had the effect of people learning more about RFID, about how it worked and what it was all about. And all the while in the background, vendors were continuing to develop the technology. With the help of big retailers like Wal-Mart and Tesco, it was actually being put to use.

Lately RFID is getting more coverage for its uses in the supply chain than it is for its privacy concerns. Also, having major vendors -- such as IBM, Microsoft, and Oracle, just to name a few -- jump on board and work on developing RFID technology hasn't harmed its reputation. Now instead of talking about the technology, more and more companies are seriously considering using it, and some are trialling it.

Eelco de Jong of LogicaCMG says where last year there was a lot of talk and no action, this year it is quite different. "It has snowballed in Europe, everyone now understands that RFID will roll -- it is not a question of if, but of when," he says.

LogicaCMG surveyed 50 companies in Europe, focusing on the use of RFID in the retail sector. According the results, 50 percent of the companies surveyed said they will conduct pilots this year, and 30 percent said they were conducting pilots right now. Certainly a few of those companies involved in trials would have been pressured by large retailers, but still the interest reported in the survey is not insignificant and it says a lot about the changing attitude towards RFID.

In the August issue of IT in the Supply Chain -- a regular supplement produced by Technology & Business -- we discuss the current uses and drawbacks of RFID. One spokesperson, Andrew Osbourne of e.centre, a supply chain efficiency organisation in the UK, says all companies supplying to major retailers should at least be looking into RFID, if only to keep up with the market. Geoff Barraclough, of BT Auto Devices, says in the publication that his company is advising customers to start trialling RFID, saying a small implementation isn't prohibitively expensive.

Following this theme, de Jong says the RFID pilots being conducted in Europe are not all driven by a business case, instead it is more that companies want to actually test the technology and see what it is like in action. While spending money on IT projects without a business case is something that is often found on the list of what not to do, in this case de Jong says it has value. "Often we see a more technology driven pilot at an early stage because they want to make sure that the technology works for them before they spend a lot of money on it, so it absolutely makes sense," he says.

Cost is an issue, which should come as a relief to privacy advocates. While LogicaCMG predicts that the tagging of crates and pallets will become standard as of 2005, the company says retailers won't be chipping consumer goods until at least 2008 because of the high price of the tags.

Of course price won't stop everybody, if the recent news about a Japanese school chipping its students is anything to by. The school plans to put chips on the clothing and bags of students and have readers at the school gates -- working on the same principle as stock visibility, the school wants to know where its students are and when they arrive and leave.

So much for a lack of controversy...

This article was first published in Technology & Business magazine.
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