RFID survey reveals regional, industry differences
RFID in the supply chain has not lived up to the hype. But look below the surface, says Manufacturing Insights’ Kimberly Knickle, and you’ll find steady growth.
By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 3/19/2007
A recent survey of more than 90 companies worldwide by Manufacturing Insights shows steady investment within regions and industries.
“We did the report because we recognize that people are moving ahead with RFID, even if they’re moving slowly,” says program director Kimberly Knickle. “We wanted to give examples of how companies are investing in RFID, where they are spending and how they are justifying their projects.”
By now, no one argues that the pace of RFID adoption has been slower than was initially anticipated just a few years ago. Despite sluggish growth, most manufacturing companies are investigating RFID and many are quietly implementing solutions.
The survey, she adds, uncovered regional differences.
U.S. companies:
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Invest the most money in RFID,
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87% of the responding companies indicated some level of RFID spending,
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Most companies spend less than $250,000,
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25% of respondents said they were spending more than $500,000 on solutions, and
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Objectives: Compliance with mandates, federal regulatory requirements, and then track and trace improvements.
Western European companies:
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Companies are looking for supply chain efficiencies, according to Knickle (That’s because smaller retail stores and tight logistics require more precise systems and processes.), and
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Companies adopt the technology at a slower rate and are spending less than U.S. companies.
Asian companies:
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Ranked mandates at the bottom of their list of objectives,
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They are looking for improved supply chain visibility and asset tracking (That makes sense if you consider the role of Asian manufacturers in the global supply chain.),
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43% of responding companies indicated they spent no money on RFID in 2006, and
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More than 80% will be investing in the technology this year.
When it came to manufacturers, the survey also produced some differences by industry. Still, one fact came through loud and clear regardless of where the manufacturer was located: Across manufacturing verticals, improving asset management ranked near or at the top of the list of reasons for investing in RFID.
For that reason, Knickle expects to see a ramp up of investment in closed-loop supply chains using real-time locating systems (RTLS) to track physical assets, like containers, dollies, trailers and other assets.
Knickle’s bottom line: “Everything we saw says it’s still early,” she says. “But there is still a belief that this technology will work if we can find a positive ROI.”
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