Real-time location systems growing in use

Cases, pallets and retail mandates may have brought RFID to the attention of supply chain practitioners, but, for many, the action today is in RTLS.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 10/3/2007

“You know what’s interesting?” asks Ronny Haraldsvik, vice president, marketing and industry relations for Alien Technology, a leading provider of RFID tags and readers. “For an industry that was catalyzed by mandates from the Department of Defense and Wal-Mart, the majority of our growth today is coming from closed loop applications outside the mandate business.”

Why is that interesting? Supply chain visibility was the impetus behind the RFID mandates from Wal-Mart and the DoD. But mandates require the cooperation of everyone in the supply chain.

Closed loop applications, on the other hand, track the location of mission-critical assets, like:

• work-in-process,
• containers and totes with important parts and components, and
• important assets within a yard, a manufacturing plant or a distribution center.

Closed loop applications are easier to implement since they cover a defined geographic area with limited participants, rather than the entire supply chain.

RTLS is growing
That may explain why real-time location systems, or RTLS, are growing at a compound annual rate of 36% a year, according to Michael Liard, research director for RFID and contactless technologies for ABI Research.

“When I think of RTLS applications, I think of tracking high risk and high value assets with a high ROI,” says Liard. “If you look at the different applications of the technology today, they fit those themes.”

What’s more, Liard adds, when you’re talking about a closed loop environment, “you’re removing some of the complexity from an RFID solution since the scope of the implementation is contained. That’s also contributing to growth.”  

Where is RTLS being found today? 
Liard says the automotive industry was the earliest adopter, using the technology to track components like engine blocks and transmissions or parts containers. The transportation logistics industry was a close second, using RTLS to track containers or trailers in a port or yard.

“Over the last few years, we’ve begun to see applications in new industries, like health care and pharmaceuticals, along with the mining industry, which is piloting the technology to track miners at work. “In that instance, it’s literally a matter of life and death,” says Liard.