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Commercial rivalry ‘curbing RFID adoption’

  • 20 August, 2007 11:48

<p>Melbourne, August 20. Unless Australia’s distribution industries work together and heed advice from the RFID Association of Australia (RFIDAA) on standards adoption, there is little hope of a timely transition to this technology, according to industry expert Steve Bridges.</p>
<p>Commercial rivalry has resulted in a lack of industry-driven co-operative development on RFID standards, he claims.</p>
<p>Bridges is a Director of the RFIDAA, a vendor agnostic, not-for-profit association that provides impartial guidance on the technology. He is also CEO of Mid-Comp International, which supplies intelligent supply chain solutions.</p>
<p>He says that although RFID is being touted as the emerging technology that will resolve distribution tracking and identification issues and position supply chain companies at the leading edge of innovation, few companies are ready for it.</p>
<p>The situation is a legacy of closed-shop, industry specific projects in Australia over the past 15 years, in which organisations have implemented a variety of RFID solutions that operate on proprietary protocols that often cannot talk to the outside world. While this satisfies those whose RFID usage starts and ends within the organisation, companies that represent a link in a national or global supply chain face difficult and expensive choices.</p>
<p>“These could waste time, effort and expense implementing a solution that might not address their greater business-to-business eTrading aspirations,” says Bridges. “There is a lot of commercially driven hype being thrown into the mix.”</p>
<p>At present, supply chain applications account for less than 5 per cent of RFID usage. The few successful pilot projects have been performed in a proprietary closed loop environment, with specific product movements between specific trading partners. The most effective to emerge so far are shipping container movements and dry goods pallet tracking. But adoption has been isolated and superficial.</p>
<p>“For RFID technology to be effective, the underlying business processes and disciplines must be in place,” says Bridges.</p>
<p>Organisations whose products come with manufacturer-applied bar code labels, yet have been unable to implement a successful barcode scanning process, ought not to go straight for an RFID-based solution. It would turn out to be a financial disaster, since RFID alone will not resolve inventory control problems.</p>
<p>Only companies with high unit value or high slippage (e.g. theft concerns) have had any burning incentive to add RFID tracking to the raw cost of an item.</p>
<p>“Unfortunately I believe that until RFID tagging occurs at point of manufacturer, uptake within the distribution and logistics environment in general will be slow, spasmodic and uncoordinated.”</p>
<p>Bridges says the biggest challenge lies in workplace change management rather than RFID technology. Step one must be to get bar code scanning working efficiently and effectively. This introduces fundamental work flow practices required for electronically driven inventory control. It also introduces a mentality of discipline into the business, which removes much of the chaos caused by an uncontrolled and highly reactive working environment.</p>
<p>“This is exactly like the mess we find ourselves in with business-to-business EDI standards (EDIFACT), which has been an uncoordinated technical rats’ nest for the past 20 years,” says Bridges. “Commercial anarchy has bludgeoned EDI standards into a myriad of deformities, and the same is happening to RFID standards, where many variations are vying for supremacy.”</p>
<p>Bridges says the RFIDAA is making a serious attempt to guide the industry through the wall of noise generated by self-serving spin doctors and general misinformation.</p>
<p>About Mid-Comp International</p>
<p>Mid-Comp International Pty Ltd ( is an Australian developer and supplier of business software solutions that encompass intelligent supply chain, managed availability and IBM systems management. Recently Elders Ltd chose the firm’s Odyssey intelligent supply chain solution in preference to systems from 100-plus vendors including SAP AG and Lawson Software. Odyssey is believed to be the worlds largest pure Java system. Stockman, Mid-Comp’s scaled down version of Odyssey, is targeted at SME supply chain customers. Both solutions are based on Internet delivered technology. Mid-Comp enjoys a strategic relationship with IBM, and supplies products and services to a client list that includes dominant Australian commercial enterprises. The company also supplies product to organisations in 26 countries, including many Fortune 500 companies.</p>
<p># # #</p>
<p>For more information</p>
<p>Steve Bridges,
CEO, Mid-Comp International Pty Ltd
Phone: (03) 9915 5200 or 0407 498 400

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