While it is not a new technology, radio frequency identification (RFID) has become a hot topic among manufacturers, particularly consumer segment product companies.
On the global stage, the technology was catapulted to the forefront by Wal-Mart`s mandate requiring its top 100 suppliers to use RFID tags on cases and pallets of consumer goods shipped to its distribution centres and stores by January 2005.
Locally, RFID has been used by motor manufacturers for about 10 years. It is also widely used for security purposes to track expensive goods and animals.
"While in many cases, the trusted barcode is still the preferred method for controlling the supply chain, a decrease in the cost of tags means more companies are turning to RFID for the niche benefits it can deliver," says Francois van der Bank, senior advisory consultant in Business Connexion`s Strategic Solutions Competency.
There are industry specific RFID solutions that can be employed depending on the sector. For instance, an airline might want to monitor luggage as in the case of Hong Kong International Airport, which deployed the largest RFID network undertaken thus far in Asia. The airport installed 120 RFID readers and purchased 1.5 million smart labels to track luggage.
"In the case of an airport implementation, the technology used by the airline has to be compatible with those used in airports where those planes fly. Airlines work across borders so it would make sense to track bags using RFID embedded in barcode labels as it is more accurate," he says.
The technology can also be used in the mining sector where accidents are on the increase. Seismic tremors endanger the lives of workers underground. Here, a people tracking system using virtual gates could assist mining houses to keep track of its people at all times.
"Aside from the safety aspect, RFID can also be used to ensure a mining team is mining at the correct stope face. Sending out a team or trucks to the wrong ore body is time-consuming and translates to a reduction in productivity," he adds.
A new industry study, RFID & Emerging Technologies Guide to Healthcare, forecasts that the US market for RFID and related technologies in the hospital and healthcare sector will grow to $8.8 billion by 2010.
The report also explains that several factors will help accelerate the adoption of RFID and emerging technologies in healthcare after 2007. These include an aging population in the US, regulations to address an increase in the number of deaths due to medical error, and a shortage of qualified healthcare personnel.
"RFID will let us do old things in new ways," says Van der Bank. He adds that one benefit of RFID that is frequently ignored is its ability to supply real-time information cheaply. The information gleaned from using RFID is most important as it can assist in improving different parts of the business. Allocating assets to specific resources can ensure they are being used efficiently. In addition, future procurement can be managed using productivity information gathered from RFID technology," he states.
RFID is most effective when used in conjunction with other technologies such as warehouse management, ERP and store management systems or security and logistics solutions. In the case of the Hong Kong airport, RFID is being used in conjunction with the bar code to integrate with systems of international airports.
"As with any implementation, there has to be a clear business case for the use of the technology. Deploying RFID should be for the sake of business improvement, be it strategy, process or infrastructure driven. Both large and small enterprises need to ensure they understand the technology and the business value before they invest in RFID."
Although experts concur there will not be many major RFID deployments this year, they are still bullish about the technology believing that, in future, it will play an even bigger role in the supply chains of the healthcare, manufacturing, mining, retail and automotive industries. Others also believe that in five or 10 years, RFID will have changed the appearance of the shop floor.
Share
Editorial contacts