RFID: education, unreadiness

Recent news about radio frequency identification (RFID) includes education opportunities and cost concerns about RFID’s use on pallets.

By Control Engineering Staff July 1, 2004

Recent news about radio frequency identification (RFID) includes education opportunities and cost concerns about RFID’s use on pallets. A series of “RFID Boot Camps” by AIM Global (Automatic Identification and Mobility trade association) has begun in the U.S. and Canada. In separate developments, a recent poll of IT executives, conducted by a division of NCR, suggests that RFID is too costly for retail point of sale at present, and ABI Research says people ought not to get hung up on the idea of 5-cent tags.

AIM Global, a trade association for the Automatic Identification and Mobility industry, will produce series of RFID Boot Camps, educational workshops for resellers, system integrators, and end-users about RFID and EPC (electronic product code) technology and applications. The series, in the U.S. and Canada, started in June 2004 in Chicago. RFID Goal is to “provide a necessary reality check, to help businesses large and small understand how RFID can positively benefit their organization,” stated Dan Mullen, president of AIM Global. Technology experts will address the overall business case for RFID and discuss how enterprise users, integrators, and value-added resellers can improve their businesses by incorporating RFID products. Separately AIM Global also is meeting with Boeing, Airbus, and others about standards in development for use on commercial aircraft. A CD on the AIM site offers an RFID Knowledge Base, said to offer educational information about RFID technologies and solutions designed to address informational needs of systems integrators and value-added resellers.

While RFID has started to be used in supply chain management for pallets, it is not yet cost effective to put radio frequency tags on individual retail products, according to a recent poll of 106 IT executives. Teradata, a division of NCR, a provider of data warehousing, conducted the survey of IT executives from retail and related industries from Feb. 23 to March 15, 2004. Eighty-five percent of those surveyed said they believe RFID is too expensive to be deployed in retail for at least two to three years; 27% believe it will be deployed at retail point of sale within a year. Of the total respondents, half said deployment at retail would likely go beyond four years.

Forget 5-cent RFID tags: just work on benefits, suggests ABI Research . With Wal-Mart’s mandate announcement in June 2003, discussions have centered on RFID tags becoming available at a price point of five cents in large volumes. “Five cent tags are a component to the overall success of RFID” but they are not one among the most important elements, says Erik Michielsen, ABI Research principal analyst for RFID. “Without proper commitment, planning, and partnering, cheap RFID hardware is not sufficient to make a sustainable long-term difference with consumer packaged goods suppliers looking to benefit from RFID.” Compliance with mandates requires that companies invest in RFID, so many companies have embraced cheap tags as a way to reduce compliance costs. Some companies have adopted a delaying strategy solely in hopes that tag prices will decrease. ABI Research says compliance efforts to make Wal-Mart’s January 1, 2005, deadline for the sake of compliance alone may prove more hurtful than helpful in forging a stronger relationships with retail giants. “Commitment trumps compliance,” adds Michielsen.

Look for the “RFID: Adoption increases despite costs” Technology Update in the July issue of Control Engineering .

—Mark T. Hoske, editor-in-chief, Control Engineering, MHoske@cfemedia.com