Radio Frequency Identification (RFID) is evolving as a major technology enabler for tracking goods and assets around the world. It can help hospitals locate expensive equipment more quickly to improve patient care, pharmaceutical companies to reduce counterfeiting and logistics providers to improve the management of moveable assets. It also promises to enable new efficiencies in the supply chain by tracking goods from the point of manufacture through to the retail point of sale (PoS).

As a result of the potential benefits of RFID, many of the world's major retailers have mandated RFID tagging for pallets and cases shipped into their distribution centres by 2005. The consequences of this for the retail sector is a likely impact on around 200,000 manufacturers and suppliers globally, and will fuel the market for hardware and software to support RFID.

Unfamiliarity

But while the technology has received more than its fair share of media coverage over the last 12 to 18 months, many are still unfamiliar with RFID and the benefits it can offer. In fact, Microsoft-commissioned research of the retail and manufacturing industries, from independent research consultancy Benchmark, found that 31% of senior decision makers in large UK manufacturing companies have never heard of RFID. A further 24%  may have heard of the term but know nothing about the technology beyond the acronym. Indeed, only 26% of those interviewed understood the technology and its capabilities.

Despite projections for 2005 indicating that growth in the worldwide transponder (RFID tag) market will be £464m*, lack of good information about RFID and its benefits will potentially impede uptake of the technology.

Retail drive

RFID is still a growing trend across Europe. Carrefour, METRO and a host of other organisations are already trialling RFID solutions. Manufacturers such as Danish snack foods producer KiMS are also piloting the technology. Research by RF & Microwave Industry News suggests that 41% of European retailers planned RFID pilots in 2004.

This growth in uptake is being mirrored in the UK RFID market. Several major manufacturers, logistics providers, retailers and other organisations are already conducting trials. Some are also conducting phased roll out of the technology.

Reusable assets

One example is UK logistics provider TrenStar, which is already using RFID to track reusable assets such as beer kegs. TrenStar tracks and manages assets such as automotive roll cages, beer kegs, and air cargo containers for its blue-chip customers.

To achieve visibility of these items across the extended supply chain, it developed an RFID-based container tracking solution with full, web-based reporting. The solution was built on the Microsoft .NET Framework, and also integrates with Microsoft Windows CE to power wireless, handheld RFID scanners.

While lost assets have traditionally been a major challenge for manufacturers and logistics providers, TrenStar can now locate each item in real time and report back to its enterprise customers quickly and easily. As a result, goods can be transported more quickly, the capacity of vehicles and storage space can be maximised and assets can be managed, maintained, and replaced when necessary.

Because TrenStar also takes ownership of assets and charges customers on a "per-use" basis, manufacturers can entirely outsource responsibility for this non-core function and ensure that their costs are predictable and competitive.

Production control

Another example of RFID is Bayer Diagnostics, one of the world's largest medical diagnostics businesses. Working with Microsoft partner Smart421, Bayer implemented an RFID-based production control system. The system monitors and reports on every aspect of the manufacture of the company's critical cartridges for near patient blood-testing. The RFID tag embedded in each cartridge collects, verifies and stores important data about their content - vital for accurate test results. 

RFID-enabled solutions have also been trialled by leading retailer Marks & Spencer and technology provider HP. In addition, the Department of Trade and Industry (DTI) has contributed significant funding to an RFID centre of excellence to help small and medium-sized businesses (SMBs) increase the efficiency of their operations using RFID-enabled technologies.

This local and global interest in RFID as a key enabler for the supply chain and for achieving greater traceability for goods and equipment is also stimulating the market for software that supports RFID. In 2005, this will increase by 40% to £323m. ABI Research also highlights that RFID integration services will surpass RFID equipment revenues by 2007, reaching more than £0.82m by 2005. In addition, many UK organisations are extending their logistics solutions to incorporate RFID.

Standards

In order to prevent any one vendor being in a position to enforce its own RFID standards across an industry, EPCglobal, a member-driven organisation comprised of leading firms and industries focused on creating global standards, is developing a standards-based network to support RFID. In a supply chain based on consistent data, the technology makes it possible for business partners to identify items and share information relating to them, including their location.

Microsoft is playing a key role in the development of RFID standards. It has been an active member of the EAN UCC working groups, collaborating with organisations such as GCI, CIES, UDEX and others to play a key role in defining standards for data synchronisation.

It has been estimated that the impact of poor data quality on supply chain efficiency equates to $30 billion a year, further underlining the importance of creating standards for trading partners across the globe to adhere to. Microsoft's admission to EPGglobal in 2004 demonstrates its support of the global EPC standard for immediate, automatic and accurate identification of any item anywhere in the world.

RFID Council

As well as joining EPCglobal, Microsoft has also announced the formation of a new Microsoft RFID Council. The group will look at how retailers and manufacturers can track and ship their merchandise more effectively using the technology. The Council highlights a growing ecosystem of partners that are building innovative RFID solutions on the Microsoft platform to enhance control of key business processes, improve inventory visibility and provide better customer service for manufacturers, distributors and retailers.

The Council, which operates worldwide, aims to deliver RFID solutions that comply with global standards. They will also be low-cost, simple to deploy and built on a robust, scalable technology infrastructure. Members of the Council already include major consulting firms, system integrators (SIs), independent software vendors (ISVs) and hardware manufacturers.

Microsoft has created a software platform to support RFID-enabled solutions. It is built on open-standards-based technologies that can work with third party applications and business processes. With the choice of sourcing and integrating hardware from a wide range of suppliers comes potential for a resultant reduction in hardware costs.

By selecting the right middleware companies will be best placed to maximise the value of previous technology investments. Flexible middleware will help companies to adapt and grow by allowing their existing applications to integrate with new systems, such as those using RFID.

Real time view of inventory 

RFID offers new levels of visibility for companies that want to track physical items between locations. In the retail supply chain, goods tagged at the point of manufacture can now be traced from the factory to the shop floor, providing a real time view of inventory for all supply chain partners.

* According to the Venture Development Corporation, 16th March 2004 

Continued . . .