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| 28/04/2004 |
LogicaCMG: RFID on the threshold of European breakthrough |
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The key findings of an international study undertaken by LogicaCMG reveal that Radio-Frequency Identification (RFID) is high on the agenda for European retailers, food manufacturers and logistic service providers. A majority of the companies interviewed in the Netherlands, UK, Ireland, Germany, France and Belgium, gave RFID top priority in terms of planned IT investment.
The study shows that half of the 50 companies interviewed in Europe have or are planning to deploy RFID pilot projects throughout 2004, with the vast majority planning to start implementing the technology within the next three years. A number of major retailers, such as Tesco (UK) and Metro (Germany) will initiate large-scale rollout of RFID.
Whilst these projects will be finalised by 2007, the research indicates that companies will not begin to tag consumer products until 2008 when prices of tags will have naturally lowered. The focus for the moment is on Returnable Transport Items (RTIs), such as crates and pallets. LogicaCMG expects the tagging of these RTIs will be standard as of 2005.
Since RFID will have great impact on the processes and IT systems of companies, it is necessary that they thoroughly prepare themselves. The use of RFID with RTIs will only take place if the financial benefits are greater than the cost of implementation. The cost/benefit analysis part of the research showed that based on a tag price of 50 eurocents the handling cost per pallet could decrease by 8.5%. This leads to a payback period of between two and three years.
LogicaCMG anticipates that by the end of 2004, the main issues with RFID technology impeding broad adoption will be resolved. First, the EPC network has not been finalised yet. Second, limitations in European legislation mean that the use of UHF technology is currently restricted. (A majority of companies that have trailed RFID prefer the EPC [Electronic Product Code] network as standard for information exchange and UHF [Ultra High Frequency] as frequency.) Finally, the software to integrate RFID in the existing IT infrastructure is not mature yet.
Since the whole supply chain is involved, the RFID implementations of the large retailers in 2005 will have a great impact on the food manufacturers, logistic service providers and retailers. According to Paul Stam de Jonge, Director Sales and Marketing at LogicaCMG, “the RFID implementations will lead to an irreversible process in the retail market. In the short term, it is therefore of the up most importance for companies to gain knowledge and experience with RFID”.
The research is an initiative of LogicaCMG in close co-operation with EAN Netherlands and ECR D-A-CH and is sponsored by Checkpoint Systems, Euro Pool System, Intermec, Omron, Zetes, SAS and Container Centralen A/S. |
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