Encouraging RFID adoption across customer verticals

RFID providers need to focus on how they will differentiate their solutions to different customer industries

The global $500mn Radio Frequency Identification (RFID) industry is expected to grow rapidly in the next 2 – 4 years, as tag readability improves, security is enhanced, costs reduce, and industry standards are established.

However, current investment costs – covering tags, readers, middleware, application software and servers – remain inhibitive. A study by Synovate Business Consulting across seven Asia–Pacific countries has shown that customers are most ready to adopt RFID technology when tangible benefits from real process innovation are demonstrated.

These benefits include increased customer satisfaction from reduced stock–out situations, enhanced promotions planning, and reduced working capital. Such benefits do not apply evenly across different companies, and we have identified two key dimensions that decide the extent to which different industries are prepared to invest in RFID solutions:

Value at stake. This include significantly–sized companies that can afford the entry investment levels that start from $20,000 investment, high value products that would warrant such an investment, products with short shelf life which warrant rapid speed–tomarket, and stakeholders that value the data that is tracked.

Supply chain requirement. This applies especially to complex & unstructured supply chains, business models whose inventory systems are a key success factor, products with high inventory turnover, and organisations with an extended distribution network that requires their assets to be reliably tracked.

Tangible returns from complex supply chain requirements encourage RFID investments

Different challenges in each customer industry call for unique RFID solutions. RFID providers will firstly need to acquire in–depth knowledge about the industry dynamics, business processes, and arising needs of target industries and companies. The leaders of tomorrow's RFID industry will be the players that successfully integrate this intelligence into their service propositions, demonstrate how meaningful innovation may be enabled in each business process, and differentiate the complexity, costs and returns of their solutions to targeted customers.