What is your take on RFID? Will it be a factor in the next five years?

What's your take on RFID? The hype appears to have died down recently, most experts citing prohibitive costs - even for passive chips - on anything but bulk shipments. Should RFID be a factor when planning for the next five years?

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I agree, the hype that was mostly due to the discovery of a new way of tracking has indeed died down a bit. The prices of tags and readers are exorbitant now but have been noticeably reduced over the last few years. We have not yet touched the 5 cent benchmark though.

Meanwhile, the use in high-priced products or the bulk shipments will help as a proof of concept. Most of the world is watching to see how the pilot RFID projects are doing before throwing their money in. Those who have implemented RFID (Wal-Mart in particular) seem to be happy with the results and have increased their effort in this area. Also, the applications of RFID tags are not limited to retail markets anymore and have expanded to passports and even to the tagging of sheep in farms in New Zealand. Once more and more companies start implementing RFID projects, the economies of scale will bring the prices further down.

The other possible deterrents are the issues that have been raised about privacy that needs to be addressed by the RFID market. There are also some technological issues with radio waves bouncing or transmitting poorly through liquids, although that seems to be getting addressed.

RFID is not a fad and is not going to vanish but will only gain from strength to strength. It will definitely be an inevitable part of many of the major supply chains in two to three years time. RFID should definitely be a part of planning in the next five years and will reshape the supply chain and can be expected to bring with it lot of savings, visibility to information and efficiency.

This was first published in May 2007

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