RFID: Can it help your business?

Summary:In 10 years almost everything will be tagged, say the experts. So what are these little chips that are soon to be so pervasive, and how will they take over your business?


Contents
Introduction
Starving for standards
Secrets and trials
Chipping the chains
RFID a real asset
Future potential
Executive summary

Secrets and trials
Companies are generally secretive about RFID trials because they don't want publicity until they have worked out exactly what they want to do with the technology, suggests Scott Dawes, general manager of applications, Oracle.

"There's a lot of talking and trials in Asia-Pacific," says Lessmoellmann, but most of the activity is in the US and to a lesser extent in Europe.

Australian organisations tend to be "fast followers" rather than leaders, says Jason Taleb, director, Capgemini. Boards do not see RFID as a strategic agenda item, so nobody is stepping forward.

The Department of Defense and Wal-Mart pushed the whole US market ahead, but our retailers are "stepping back and waiting," says Jeff Wareing, managing director, industry distribution and transport, LogicaCMG Australia.

Eelco de Jong, European practice leader for RFID solutions at LogicaCMG suggests private-sector reluctance is partly due to existing agendas for process changes, and it takes time to fit RFID into these plans. "It is a long term process," he says. "The real winners are going to be the innovative companies that take the lead in adopting [RFID]."

Another reason, says Frank Habraken, auto ID technology program manager, CSC, is the budget cycle -- even if a pilot is successful there may be a delay before a full-scale project is funded. The Australian government is looking at the potential role of RFID in the defence supply chain, says Taleb. If front line units cannot see the progress of the items they've ordered, the tendency is to re-order in the event of a delay, which leads to waste and shortages for other units.

Pilots that were carried out last year have proved that the technology works, says Duckworth, and organisations are now looking for the areas where RFID can deliver the biggest business benefits. There is still interest in retail, but there is also activity in the automotive, electronics and logistics industries. The aim is to track raw materials and work-in-progress through the manufacturing process, and then potentially through the supply chain. For example, IBM Business Consulting Service has worked with Philips on a project to tag consumer goods during manufacture in Taiwan, using RFID to provide visibility within the factory and through to the Hong Kong distribution centre.

Apart from retail and supply chain, interest is being shown internationally by the military and manufacturing industries such as automotive (eg, to improve operational efficiency), aerospace/defence (almost everything on the new Airbus is tagged, says Habraken, and de Jong predicts lots of action in the aviation industry during the next year or so), construction and pharmaceutical (eg, to support pedigree laws such as those introduced in Florida -- the EPCglobal Network allows the upload of the time and location that a tag was read, so if a "cloned" tag was attached to a counterfeit bottle, the pharmacists that received the real and fake bottle could be alerted to the duplication).

RFID will change the way items are traced along the supply chain, says Lessmoellmann, for example to trace a food product back to a specific animal or a pharmaceutical preparation back to batches of raw ingredients. Japan and Europe are already demanding traceability of imported meat, says Ramadan. RFID can't do this automatically, but it does address the problem of collecting the information that feeds into systems designed to perform such tasks.

Although there is little use of passive tags in Australia as yet, Barrows says exporters may need to adopt the technology to meet legislative or customer mandates. He sees lots of interest, but no compelling reason to adopt the technology in the absence of mandates, as barcodes are still more cost-effective in most cases.

"It's still early days, but it's a viable technology to replace barcoding in particular environments," he says.

"RFID means more data," says Mark Hudson, director of Business Objects' strategic business group. But data needs to be put to use, and that means reports and dashboards for people such as logistics or warehouse managers that haven't previously been touched by business intelligence (BI) tools.

"It's all about information democracy," he says -- providing the right information at the right time and in a familiar way (eg, within Office) to allow these people to do their jobs better, and with the right granularity to increase efficiency within the organisation.

Most companies do not make full use of the data they already have, says Fadi Geha, Viewlocity's Asia Pacific MD, "there's a gap between reality and the vision."

Viewlocity suggests a four-step process, starting with building synchronised views of data generated internally and by supply chain partners.

The second step is to use this information to build supply chain resilience by acting on the data before potential issues become real.

Thirdly, re-identify the exceptions you need to act upon (step two will have changed them) and automate the required contacts with supply chain partners.

Finally, refine the granularity of the system by using RFID to collect more detailed information about the products or components that are causing problems.

Topics: Processors, Security

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