The future of Radio Frequency Identification
Puneet Gupta
Published: 18 Aug 2003 14:55 BST
When we may see large-scale RFID adoption
Large-scale adoption of RFID rests on several factors, such as lowering of tag and reader costs, RFID standardisation, addressing of RFID privacy concerns, integrated support for RFIDs in all popular enterprise software (ERP, SCM, CRM), and commitment for RFID adoption from leading supply chain vendors and influential marketers like Wal-Mart. Progress is happening, and the point to be emphasised is that RFID pilots and rollouts can begin today. The success will depend on choosing the right application area. In the short to medium term, the focus should be on your supply chain areas. Within the supply chain itself, logistics and warehouse operations may be more suitable candidates in the short term compared to inventory management. Item-level tagging or smart shelf applications, though not suitable today, should start becoming popular within a few years. Forrester estimates indicate that tag costs may reach 5 cents with over a billion chip production capacities by 2004. EPC will also have sufficiently matured by that time. This would make the technology suitable for item-level tagging of several products. After 2007, it will be feasible to apply item-level tagging across all items in a retail store environment.
Cheaper RFID solutions on the horizon
The cost of RFID solutions is much more than the cost of tags and readers. A large part of an RFID solution's cost lies in the software infrastructure and the enterprise application integration. Even in the supply chain market, a key application area of RFID technology currently, the cost of solutions is higher today because most are customised. However, the cost of the RFID solutions is expected to fall in the next couple of years as supply chain vendors begin integrating this technology into their product portfolio.
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