A year in RFID

It's been nearly a year since the Gen 2 standard for passive RFID in the supply chain was finalized by EPCglobal. Since then, a number of important trends have emerged.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 10/24/2006

RFID is still an emerging technology that has yet to prove itself in the supply chain. But in the months since the Gen 2 standard was finalized, it has moved closer and closer to the mainstream.

At least five important trends have emerged, according to companies working in the RFID space.

Gen 2 has quickly become the de facto standard: Even though Gen 2 tags, readers and printers have been on the market for less than a year, the standard has been embraced by the two biggest users: Wal-Mart and the Department of Defense, which have announced sunsets on Gen 1 technology. “Acceptance has been fast, but that’s because the specification is superior to previous generations in every way,” says Bill Colleran, CEO of Impinj, the primary supplier of silicon for Gen 2 tags.

Mandates are moving forward, but most suppliers are still slow to adopt RFID for their supply chains: “Retailers like Wal-Mart and Metro are expanding what they’re doing with RFID,” says Chris Kelley, director of RFID business development for Intermec. “But their suppliers have not moved forward to a massive degree.” Kelley adds that those retail suppliers who are looking at RFID are more often looking at closed-loop applications, like asset or work-in-process tracking inside their facilities.

The industry is consolidating: Motorola’s acquisition of Symbol and Samsys’ decision to leave the business are just two examples of industry consolidation. More is to come. “This is a natural evolution,” says Kevin Ashton, vice president of marketing for ThingMagic. “The companies with the products end-users prefer are getting stronger. That’s the sign of a maturing technology market and it’s good for users.”

People are focusing on business processes, not making the technology work: A few years ago, most RFID projects involved a guy working by himself in the corner of the warehouse, trying to figure out how to read a tag. “Today, we’ve got CIOs, CEOs and business operations teams looking at how to apply RFID to their business processes,” says Justin Hotard, director of product management for Symbol Technologies. That, too, is a measure of the success of the Gen 2 standard: In most instances, the technology works.

RFID is going mobile: Most RFID implementations to date have put readers at dock doors. With the introduction of vehicle-mounted RFID readers for lift trucks, RFID is moving deeper into the plant and DC. “The value of RFID is in having total visibility into my inventory, wherever it is,” says Dick Sorenson, director of RFID products for LXE. “That means I need the ability to capture information beyond portals at the dock doors.”