RFID estimated to grow five-fold in next six years

That’s the latest prediction by analyst Frost & Sullivan. The organisation still believes that RFID’s ability to improve the efficiency of asset tracking and make inventory more visible offers an ideal solution for companies seeking to improve their manufacturing performance. It also suggests that as companies strive to tighten their brand security and protect products from counterfeiting, RFID is emerging as the optimal solution to safeguard valuable products throughout the supply chain. “The unique features of RFID technology enable the development of a constant stream of innovative applications for manufacturing sectors,” says Frost & Sullivan research analyst Rengarajan Srinivasan. “The rising need to accurately track valuable assets and products is creating significant scope for the use of RFID across a range of industrial sectors,” he adds. However, Frost & Sullivan concedes that the ROI (return on investment) from RFID remains difficult to quantify, “as the full benefits of the technology depend on its degree of integration into wider business processes.” And it suggests that difficulty in identifying a clear ROI, coupled with RFID’s still high implementation cost, pose significant challenges to prospective entrants into the RFID market. “The excitement and euphoria surrounding RFID in recent years, fuelled by the early retail mandates and pilot schemes, have created unrealistic expectations of the technology among many industries,” says Srinivasan. “As the RFID market starts the transition from technology trial stage towards early adopter phase, a key challenge will be to clearly identify the range of expected benefits,” he continues. “The uniqueness of each new RFID implementation due to varying company environments compounds this challenge, making meaningful comparisons of new systems with existing implementations unreliable. Over-optimistic or unclear objectives for implementing RFID are likely to have a negative impact on ROI and deter wider adoption.”