If you think RFID's already roaring like a hurricane through the industry, just wait. More than three-quarters (79 percent) of attendees at this fall's Frontline Solutions Conference in Chicago plan to have an RFID pilot in place—or be live with RFID— within the next 24 months.
The survey was conducted by Wavelink Corp., a provider of mobile infrastructure management software. The survey queried IT decision makers from the manufacturing, retail and transportation industries and from the government.What do they hope to gain by using RFID? The top benefits cited were improving their tracking ability, meeting customer requirements, and achieving greater efficiencies in shipping and receiving.
Challenging the notion that most suppliers are adopting RFID simply to stay in their customers' good graces, the majority of respondents planning to implement RFID said they hoped to take advantage of the dynamic information from RFID tags within their existing inventory, warehouse and supply chain processes. Nearly two-thirds plan to use or are already using the data for inventory management, 50 percent for warehouse management and nearly 40 percent for supply chain management.
A full 79 percent of companies surveyed at the 2004 Frontline Solutions conference said they had plans to use RFID tags. Of those:
But not all of the news was good. The survey also confirmed that users still have plenty of concerns regarding RFID, including the high cost of implementation, the untested state of the technology, and the lack of sophisticated software to integrate RFID with applications like supply chain management and enterprise resource planning (ERP).
Despite those ongoing concerns, there's plenty more evidence out there that the RFID train is gathering speed. High-tech giants Hewlett-Packard, SunMicro and IBM are all ramping up their RFID offerings. Though they're unlikely to be flooded with orders for hardware, all three are in a position to benefit from the booming services market that RFID is expected to create.
Last month, IBM announced plans to invest $250 million and hire 1,000 workers to build a new business unit focused on RFID and other sensor technologies. Meanwhile, HP and consulting firm BearingPoint have partnered to market smart-tag systems to retailers. And Sun, which this year opened an RFID test center in Texas, is releasing three products that target retailers, distributors and systems integrators.
Most manufacturers are hoping their investment in RFID tags will improve supply chain visibility or at least reduce stockouts. But managers at bicycle manufacturer Pacific Cycle are jumping into the RFID race for a different reason. A supplier to Wal-Mart and Target, Pacific Cycle differs from other suppliers in that it ships its bikes in knocked-down form—only a few of its products are displayed fully assembled on the retail floor at any given time. That means when Wal-Mart sells a Mongoose mountain bike, Pacific Cycle relies on Wal-Mart employees to assemble a new bike in the back room and roll it right out onto the floor.
Finding a good way to alert store employees that they need to run back and assemble another bike has been an ongoing problem. "We're trying to figure out how to get our inventory from the back room of Wal-Mart to the store shelves so we can sell more bikes," says Ed Matthews, director of information systems for Pacific Cycle. "When Wal-Mart sells one of our bikes, we need to signal somebody to go out back and build that bike and re-stock."
Matthews hopes the information collected from the RFID tags on its bicycles will solve that problem. "Even though we have that [supply chain] information, we're still having an issue in trying to figure out how to get that Wal-Mart associate to take action," he says. Pacific Cycle has spent approximately $100,000 on RFID so far—and that's not including labor costs, which far surpass that figure. Still, the company figures it will be worth the expense of tagging its entire product line (50 SKUs) if it can use the RFID data to get those associates into gear.