2005 to be key year for adoption of RFID solutions

Mumbai: "2005 will be a key year for radio frequency identification (RFID) solutions," says a new report just published by independent market analyst, Datamonitor (DTM.L). The report, Global Manufacturing Outlook and IT Investment Insight - A Datamonitor Technology Decision-maker Panel project, surveyed C-Level executives, CIOs, IT managers and line of business managers (LOB) in 150 of the top 300 global manufacturers, to investigate current issues and IT opportunities in the manufacturing industry in North America and Europe.

It reveals 60 per cent of manufacturers have an RFID project underway. "End-user understanding of the key issues is solid and intent to invest in RFID is apparent, say Richard Clifford and Miriam Morath, Datamonitor technology analysts and authors of the study. "With 40 per cent as yet having no RFID project underway, there is considerable untapped opportunity for IT vendors to address."

Good news for IT vendors
Despite the fact that RFID technology is still immature and projects to date have tended to be pilots or limited implementations, manufacturers have already started to think ahead. In order to get the greatest benefits out of RFID technology, data synchronisation and integration is crucial. However, manufacturers are aware of this and initiatives such as 'global data sync' have been generating increasing momentum.

"78 per cent of manufacturers surveyed say their next RFID project will involve process, data and systems integration, a sign that IT vendor marketing has been effective, and an indication that the market is ready to move to the next phase," says Clifford.

Manufacturers move beyond 'slap and ship' realise benefits of RFID
The relative advancement of the manufacturing sector is also shown by the types of RFID solutions currently in place. In the survey, more than 68 per cent indicate they are using RFID either in distribution or warehouse management, while only 56 per cent say that they have implemented an RFID solution to meet mandates by companies such as Wal-Mart or Metro.

Datamonitor would have expected to see more compliance projects, as opposed to warehouse and distribution management. However, that this is not the case suggests that manufacturers have moved beyond 'slap and ship' and are looking to fully realize the benefits that RFID can bring them.
Clifford concludes:"IT vendors, particularly the likes of IBM, SAP and Oracle, have done well to educate the market. This study demonstrates the willingness to take RFID a step further. 2005 looks like it will be the year that we begin to see substantial RFID adoption for the first time."