Radio-frequency identification (RFID) has matured over the last couple of years
as large public deployments drive down the cost of technology. Standardization
initiatives now promise to change the nature of RFID projects and allow companies
to share information stored on tags with the wider business community.
Sales of RFID technologies are certainly robust. Analyst IDTechEx reports that
the market for tags, readers, software and infrastructure grew strongly to $4.9
billion in 2007 and predicts the market will grow modestly to £5.3 billion in
2008. By 2018, it says that sales will have increased by a factor of five over
2008, with over 300 times as many tags in use, as RFID opens up an increasing
number of sectors.
"Globally in 2007, the RFID business remained government driven with the healthcare
sector showing particularly strong growth in projects and the financial, security,
safety sector dwarfing all others in both expenditure and number of projects.
It accounted for a massive 48% of market value with passenger transport, automotive
coming second with 19% value share," commented IDTechEx analyst Raghu Das.
Some of the growth in 2007 was skewed by China's ID card project, which issued
each citizen an identity card. That project alone attracted some $2 billion worth
of spending on equipment and catapulted China into an RFID market leadership position.
The US, however, leads in terms of the number of active RFID projects, followed
by the UK, China and Germany. High-profile projects are underway in a range of
companies, from Tesco and Wal-Mart to Airbus, Boeing and a number of airports.
Projects touch a wide range of industry sectors. The air transport industry,
for example, is interested in the potential of RFID for tracking checked baggage.
RFID tags are much more effective than barcodes as they can be read more quickly,
contain more information and do not rely on line of sight. Hong Kong Airport says
that RFID tags offer read-rates of 97% versus an average of 80% for barcode-only
tags. Airlines are also getting involved, with Emirates kicking off a six-month
technology trial. It is using RFID tags instead of the standard barcodes on a
number of flights between Dubai and London Heathrow.
But despite the ambition of many of these projects, full-scale implementations
are still thin on the ground. “RFID has the potential to transform business operations
and to offer significant business advantages, but more pilots and trials have
been made public than full-scale implementations,” says director Michael Liard
at analysts ABI Research.
One of the key reasons that pilots continue to be more prevalent is because it's
much easier to test an application internally. The historical lack of industry-wide
RFID standards has made it difficult to translate a pilot into an application
that works for all the market stakeholders. Although a dominant partner in the
supply chain, such as Wal-Mart, can impose its procedures on its partners, this
doesn't always translate into business advantages for the whole supply chain.
For it to work for all companies, it is vital to have a consistent approach to
what is stored, right down to sharing the same business vocabulary.
moving to open applications
But things are starting to change. According to ABI Research, one of the most
significant developments in 2007 was the market's move beyond traditional closed-loop
application environments to embrace newer applications such as asset management
and open-loop supply chain applications. Open-loop applications are much more
powerful, because they support moving tags and assets between companies by providing
standardized access to information related to the RFID tag.
RFID tags can link to all manner of business-critical information, such as 'what
is it', 'where is it', and 'when did it get there' along with other metadata such
as 'why is it there', 'what condition is it in' and 'what is it doing'. Sharing
this information is a key business driver, and ultimately even consumers should
be able to track their purchase from manufacture to delivery.
"With this ability in mind, there are logically three tiers of RFID applications,"
explains Orange Business Services' Principal Consultant, Sam Forster. "The first
is closed-loop, such as Emirates' RFID baggage handling project. The next tier
would be to share this information with different airlines and airports in order
to track the baggage throughout its entire journey. The final step would be to
share this information with the public, so that a passenger, for example, could
check on the location of their baggage from their mobile."
This move from 'intra' solutions to 'inter' solutions is powered by sharing historical
and real-time data, with mechanisms such as the EPC network (see steps to success: the EPC network). The EPC Network supports both private and public information so that companies
can choose what information to share and what should remain confidential.
There are a number of initiatives to coordinate RFID-related standards. In February,
three European standards bodies launched a European Union funded project called
the Global RFID Interoperability Forum for Standards (GRIFS). It brings together
supply chain standards body, GS1, with telecommunications body European Telecommunications
Standards Institute (ETSI) and the European Committee for Standardization (CEN).
The project will examine all ongoing standardization initiatives to set up a dialogue
and ultimately aim to align all of the standards.
After spending years as a perennial pilot technology, RFID can still revolutionize
business practices worldwide. Companies are hoping that the standardization of
middleware and back-office applications will create the platform to allow them
to move away from closed-loop internal applications and share information freely
with business partners and ultimately customers.
print this page
send to a colleague