Time to play tag?

Time to play tag?

While some verticals are already deploying RFID to keep track of bits and pieces, there are still cost and education challenges to overcome.

From tagging cattle to identifying palettes of chewing gum, radio frequency identification (RFID) technology is transforming the way businesses keep tabs on inventory and transact with trading partners.

While it has been around since World War II, usage is finally headed for the mainstream as falling costs mean companies can see the benefits of deploying tags and readers to share supply chain information.

A range of verticals such as manufacturing, health, transport and retail were using it to improve asset tracking and boost productivity, GS1 Australia standards development general manager, Fiona Wilson, said.

"You can track lots and batches or even individual items," she said. "It gives companies extra information and greater visibility. For the retail and supply market, for example, the technology is helping track out-of-stocks."

According to Gartner, worldwide RFID spending on hardware and software will pass $3 billion by 2010. The analyst firm has estimated global license revenues for this year at $751 million.

GS1 (formerly EAN Australia) is spearheading RFID efforts on the standards front under the auspices of EPCglobal, which has helped sketch the Generation 2 standard. GS1 is working with 32 EPCglobal partners worldwide, 12 of which are Australian.

Gauging interest

EPCglobal is leading the development of standards for the Electronic Product Code (EPC) to support the use of RFID in today's trading networks. Wilson said annual membership was growing by about 20 per cent.

Solution partners helping to make RFID a reality include hardware and software companies, consultants, systems integrators, training companies and trade associations. GS1, in concert with a host of partners, and backed by government funding, is set to reveal the results of a local pilot project in July.

Wilson said the Australian market was conducive to RFID adoption, in part because the industry was not pressured to do so.

"We don't have mandates like they do overseas, which means we can explore RFID opportunities and help a company build a business case," she said. "WalMart has mandated its partners to adopt it. If non-compliant, they won't get the business.

"This isn't to say the adopted technology isn't good, there just hasn't been enough time to explore the benefits."

While an attractive proposition, the local market still wasn't seeing much action, according to Express Data hardware division manager, David Peach.

"No doubt it's the way of the future, but until there's end-to-end support for it in the supply chain, it won't be widely adopted or all that effective," he said.

The Australian Department of Defence (DoD) recently announced a $20 million pilot project to use RFID tags in a bid to upgrade its worldwide logistics.

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