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Insider's BLOG from the RFID Experts

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Wal-Mart RFID Announcement: a small part of industry RFID adoption

  
  
  
  

It’s a hot summer for RFID adoption news. The biggest so far is Wal-Mart's now formal announcement of a program it initiated months ago for item level retail tracking. Others may have missed a much quieter announcement in Canada mandating that all cattle be tagged. Based on our unique industry position, ODIN gets to see many other item level initiatives moving forward in IT asset tracking, aerospace tool tracking, the healthcare supply chain and even hospitality and entertainment. While there may be many very good reasons to track at the pallet and case level, the momentum is at the item level. The reason: value.

RFID is faster, better and often cheaper

This is not surprising. There are several areas where barcode and other techniques don’t provide any capabilities at all. In many of these situations introducing RFID tags reduces total costs for labor and inventory while increasing accuracy. RFID is ideally suited for situations when you need to:

  • Identify many items at once
  • Identify items where line of site requirements are cumbersome
  • Find items quickly
  • Identify items even when no human is present (or that human doesn’t follow standard policies)

 

RFID Retail Adoption is Strengthening and Drives Revenue

Despite all of the rumors of Wal-Mart reducing its RFID commitment, the facts consistently point more to refinement and expansion than retrenchment. Wal-Mart expanded its Sam’s Club program last year and is moving aggressively to in-store apparel tracking applications that have proven to increase sales in other companies such as American Apparel and Marks & Spencer. Other retailers such as Bloomingdale’s have documented upwards of 27% inventory accuracy improvements with item level RFID. In retail, better accuracy means fewer stock outs and directly translates into higher revenue.

It is no surprise that an Aberdeen article published this month suggested that 57% of retailers in a recent survey are using or planning to deploy RFID at the item level. We are starting to see that tipping point in retail that people have long anticipated. If not for the severe recessionary impact on retail in 2008-2009 which dried up capital for new technology investment, we certainly would have seen this sooner. The recent activity has led Reik Read of Robert W. Baird to increase his apparel tagging estimates from a 40% to over 120% growth rate in 2010.

RFID is just as strong in Healthcare, Aerospace, Financial Services and Government

In other industries, ODIN is seeing a similar trend. Although not driving headlines like Wal-Mart, these companies that often try to stay out of the limelight have been rapidly moving to RFID. We have seen upticks in item level RFID initiatives particularly related to IT assets, tools, weapons and medical implants. In the orthopedic implant industry, you can safely say the tipping point is already past. End users are now skipping pilots altogether and moving right into production – a clear sign of a rapidly maturing industry.

People familiar with ODIN will know that we have been conservative in our RFID growth estimates over the years. We saw what was happening. We knew the level of end user commitment. We knew which press releases were pilot studies and which were actual production systems. We knew which tag and reader vendors were actually receiving big orders. In 2010, we have seen an unambiguous shift. RFID adoption is accelerating across numerous industries. Wal-Mart may be the best publicized example, but from our seat, they are just another example of a broader adoption trend.

Read about why Wal-Mart won't be killing tags soon and how RFID economics make a difference here.

Comments

Great blog. We've seen the niche markets in IT assets, tool tracking, and weapons starting pilots because the RFID technology has advanced to allow them to use specialty RFID on metal tags at right price point.
Posted @ Tuesday, July 27, 2010 4:15 AM by Kelly Stark
Within Oracle we have developed middleware that seamlessly integrates, process and rationalize "tag data" into our core technology, BI and ERP systems. One RFID issue our customers continue to raise is reading through metal, water, humans and very harsh environmental conditions. How do you address this? Especially aerospace and tool tracking?
Posted @ Tuesday, July 27, 2010 12:05 PM by Dennis Jolluck
Dennis, I would like to talk to you more offline but let me just say that your customers can find affordable, EPC UHF Gen2 RFID tags that can survive temperatures up to 450F, rated at IP68 to handle harsh conditions. In addition, the aerospace tool tracking for FOD prevention is utilizing embedded RFID tags that are permanent and protected for the life of the tool.
Posted @ Tuesday, July 27, 2010 2:38 PM by Kelly Stark
Dennis - the bottom line is physics. The only way you can get good read rates is picking the right technology for the job and optimizing its use. You should schedule a visit to the ODIN lab to see servers, weapons, surgical implants, coins and other tough to tag items reading at 99.9% accuracy. The other key factor is using a true RFID operating sytem like EasyEdge. This is an on-reader device controlling software that optimizes all the configuration paramaters. A business process software does not have the ability to optimize the physis, a true RFID OS does.
Posted @ Thursday, July 29, 2010 5:34 PM by Patrick Sweeney
I believe we are talking from different levels. The physics and “RFID OS” are important to capture the event and we complement your solution - not replicate it. From our perspective, we believe some organizations requires a staging ground (middleware) to consolidate, rationalize, and determine what type of sensory data you want to send or generate business flows to your ERP system? Our solution is agnostic to active or passive RFID, bar-code, etc. The integration effort to any Oracle software would be transparent to you.  
 
As an fyi, Oracle now relies on partners for "sensory edge" solutions.  
 
Posted @ Monday, August 02, 2010 2:41 PM by Dennis Jolluck
you‘re really talented.
Posted @ Saturday, November 06, 2010 1:27 AM by wholesale usb drives
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