14 September 2005
Unisys Predicts 2006 will be RFID's Inflection Point
Radio Frequency Identification (RFID) technology will reach a significant turning point by the end of 2006, according to
Unisys Global Visible Commerce experts. Companies will move beyond the pilot phase, implementing RFID infrastructures
that will increasingly become a core element of their businesses in 2006.
"Sceptics of RFID, who see significant technical and regulatory challenges or no return on investment, are wrong. The
same was true with barcode technology 30 years ago - many in the retail and consumer products industry considered it to
be costly, technically flawed and unnecessary," said Glenn Bittle, Northern Region Manager at Unisys New Zealand.
"Today, barcodes are on 87 per cent of the items in the supermarket, and the adoption rate of RFID across multiple
industries is already faster. Many of the key building blocks are already in place, and market drivers across industries
will fuel adoption."
According to Unisys, adoption within the aviation industry will more than double in 2006 due to the recent ruling, which
allows passive RFID to be used for goods carried on airplanes and aircraft parts. The international shipping and
transportation industry will also make great strides by using lessons learned by the early adopters - retail and
consumer goods, automotive, healthcare and life sciences, and the military.
"RFID is a winning technology. It will eliminate uncertainty in the supply chain, reduce the need for inventory 'safety
stocks' and enhance productivity," said Dr. Donald Bowersox, John H. McConnell University Professor, Michigan State
University. "Clearly, we will experience significantly higher adoption rates as RFID applications enhance supply chain
visibility."
RFID adoption made great strides with significant milestones in 2005. Building blocks such as the completion of the Gen
2 passive RFID standard - which makes the use of one, secure tag around the world possible - will aid adoption across
industries.
"All of the companies I have spoken with that are involved in RFID are justifiably proud of their accomplishments, but
there remains a great deal of work to be done. The Gen 2 standard has to receive worldwide endorsement, the price of
tags has to drop, and the installation of the technology needs to be greatly simplified," said John Fontanella, senior
vice president of Supply Chain Services, Aberdeen Group. "The good news is that we are progressing on the path of RFID
adoption and there is no turning back."
Suppliers have been implementing RFID to meet the mandates established by major retailers since 2003. According to
Unisys, in 2006 the outsourcing of support for RFID infrastructures will increase more than 400 per cent. This will be a
direct result of companies beginning to treat these infrastructures as a core part of their business, which will be a
testament to the technology's growing maturity.
"Cynics will be astounded by the technology's increased maturity," said Bittle. "Major advances will also be made as
organisations learn to manage the data generated through their RFID implementations and use it to increase efficiencies.
Companies will save billions of dollars through these efficiencies in the coming years."
ENDS