IBM invests quarter billion in RFID

IBM is to invest $250m over the next five years in new sensor and actuator technologies, including RFID (radio frequency identification) and wireless. Big blue is expanding its Pervasive Computing business, which last year generated more than $2.4bn revenue. Around 1,000 IBM employees will bring together IBM hardware, software, services and R&D at its thee centres in Tokyo, Japan, LaGaude, France, and Gaithersburg, Maryland USA. “Increasingly, IBM’s industrial customers want to use RFID to cut costs and time to market on the plant floor, in warehouses and transportation,” says Faye Holland, worldwide RFID leader, IBM Global Services. She says this is about IBM training its internal community to accommodate huge anticipated growth beyond the automotive sector and into aerospace and defence, general manufacturing, chemicals and petroleum, forest and paper and electronics. Although she concedes that most users are still at the getting their hands dirty, understanding RFID and considering the business case stages, she insists that IBM is seeing increasing numbers of pilot project initiatives. One, RFID chip maker Philips Semiconductors, has completed its joint pilot with IBM at Philips’ Kao Hsiung manufacturing site in Taiwan and its distribution centre in Hong Kong, which started in November last year. That was aimed at improve the manufacturing and distribution supply chain, inventory management and control. “That has now got internal sign-off and the company is looking to do a full implementation,” says Holland. “Globally, literally thousands of customers are talking to us,” she says. And most of those are going beyond simply responding to the diktats of OEMs, defence departments and retail chains. She reckons that most will see ROI in a 24 months timeframe after implementation, although she agrees a lot depends on scope and sophistication. “Manufacturers can get benefits within their own four walls, but they’ll get more in their supply chains.” An early release from IBM, due in the next couple of months, will be WebSphere-based middleware allowing users to collect, integrate and manage RFID data for supply chain tracking of goods. IBM is also releasing RFID services to cover development of companies’ business cases, technical proof of concept, internal pilot, partner pilot and rollout.