RFID set to snowball starting this year

41% of European retailers are planning RFID (radio frequency identification) pilot projects this year despite confusion around standards and frequencies in Europe, and high costs of tags and readers. They’re doing so because of the technology’s promise of greater supply chain efficiencies. Those are key among findings of research sponsored by RFID scanning and printing firm Printronix among 125 major retailers in the UK, France, Germany, Italy and Spain. The survey also found that 34% believe RFID will reduce wastage and goods lost in transit because of its higher level and detailed tracking facilities – and that although 66% are not using RFID, 25% indicated that more than half of cases and pallets from their suppliers are already RFID tagged. This figure looks set to rise, with 39% of retailers predicting they will receive RFID tags from their suppliers on more than half of their cases and pallets by 2006. As for the scale of problems, 27% of retailers see confusion over European standards as a significant issue – although that should be resolved by June 2004 when regulator OFCOM confirms the European frequency for RFID tags and readers – while ignorance is seen as the main problem by 31%. Tag and reader technology pricing are also still seen as problems, although Brad Jarvis, RFID development manager and director of product marketing at Printronix, says they will come down very rapidly as volumes scale up. Currently, 34% of European respondents and 58 in the UK cite cost as a significant barrier. And although many hardware manufacturers are launching RFID products, the study shows that 31% of European retailers remain unsure of which suppliers to approach for RFID-compliant technology. Jarvis indicates that in cost/benefit analysis terms, the price and investment issue pales into relative insignificance against the supply chain gains – pointing to the experience already in the US. His prediction: “RFID will continue to gain momentum and there will be a snowball effect over here.” His chief worry, he says, is that best practice will spread too slowly for some, and he’s on a mission to encourage suppliers not on the RFID treadmill to get on now. Printronix has a useful White Paper on the subject basics and also offers technology and starter packs to get companies clued up in time to respond to the inevitable retailer mandates. Its RFID support measures now include ‘RFID in a box’ with Manhattan Associates, providing full pilot facilities with the latter’s warehouse management system. The firm also offers a Smart Label developer’s Kit and now a Smart Label Pilot Printer, with printer, smart labels, migration tools and templates to take existing barcode users to RFID. “They’re designed to get you a major step forward,” says Jarvis. “Users can tailor how RFID fits within their own business objectives and interpret how RFID relates to their existing warehouse management software.” And he adds: “With its potential to update tracking technology and improve supply-chain efficiencies, RFID will become a requirement in business-to-business transactions. We are committed to helping companies deploy RFID within their own environments and helping retailers develop RFID pilots with minimal initial investment.”