Lack of understanding holds back RFID adoption
cost implications are still hindering the adoption of RFID
technology amongst many UK organisations, according to a panel of
experts speaking at this month's Softworld Supply Chain event.
Press hype and high profile RFID implementation projects have resulted in businesses dismissing the technology due to preconceptions, when there could be a legitimate business case.
The panel argued that prices are in fact reducing, and that this year is a good year to start pilot projects due to the standards already developed such as EPCglobal. In addition, the panel agreed that the benefits of RFID are not purely limited to the retail sector as many organisations believe, and that other industry sectors can benefit greatly from this technology.
For example, the ability of RFID technology to deal with livestock and food traceability in the face of new laws, bioterrorism, avian flu and BSE is a field of great potential. RFID (Radio Frequency Identification) technology, which hooks miniature antennas up to tiny computer chips smaller than a grain of sand to track items at a distance, is being seen as the best means of ensuring animal traceability.
New mandatory requirements within the EU require the complete traceability of the food chain from processing to transport, storage and distribution. A guidance document lays down detailed implementing rules for operators.
"Many organisations dismiss this technology without proper investigation," said panelist Nigel Montgomery. "ROI is not simply about cost reduction, it should also be about what the technology enables you to do that you couldn't do before."
For example, the tags provide companies with potentially valuable information on their supply chains and their customers' preferences, along with the obvious benefits of better tracking and management of assets. In addition, RFID could lead to reduced labour costs and reduced inventory stockouts.
The technology can also help fortify visibility with better data granularity and more timely updates, and goes beyond the traditional bar-code product identification to offer critical information, such as the product source, destination, and expiration date. The technology can also help combat counterfeiting and supply chain security breaches.
The panel agreed that the case for RFID is certainly very strong, but may not suit all organisations at this time. In many cases companies have yet to leverage barcoding and other technologies; RFID may seem a step too far.
However, the panel encouraged companies not to look at RFID in isolation of their overall supply chain. "There are a range of technologies, including RFID, Voice and GPS, that will all have a significant impact on supply chain management within the next ten years," said Montgomery.
The panel debating the topic of RFID compliance, comprised: Nigel Montgomery, director of European research at AMR Research, Eelco de Jong, global RFID domain lead, LogicaCMG and David Lyon, EPC global line of business manager, GS1UK.
Softworld Supply Chain is now in its thirteenth year and featured an exhibition of around 60 of the leading supply chain and logistics software providers. The next Softworld Supply Chain event takes place from 8 to 9 March 2006 at the NEC, Birmingham.
