RFID Gains Momentum

Wal-Mart is still playing a major roll in encouraging adoption of the technology, but mandates alone are no longer the sole driver. I recently interviewed Robert Kashmer, vice president of information technology at drug wholesaler H. D. Smith. The company is tagging bottles of Class ll narcotics at its distribution center in Springfield, Ill., and he said it plans to start tagging bottles at a DC in Florida. It's also expanding the number of pharmacies to which it ships tagged bottles. Why? In part, to meet pedigree regulations introduced in Florida and California, but also because the company wants to protect the public health and improve internal efficiencies.

I hear similar stories almost daily now. In distribution centers, manufacturing facilities and retail stores from Topeka to Tokyo and from Madrid to Melbourne, companies are stepping up their investigations of RFID's benefits. Companies are committing to much larger pilots, in some cases tracking individual items. In others, they are tracking ocean containers or aircraft engines. These companies are not driven by the need to please a customer, but by the goal of understanding the potential benefits.

End users tell me they are impressed that RFID vendors have been dramatically improving their products and developing solutions for real business problems. They're encouraged by the reduction in tag prices, which makes RFID look increasingly attractive, and they expect to see interrogator prices start to fall, as well. And while it might be several years before you can track an individual box of breakfast cereal with RFID, companies now feel that for many applications, the ROI is in sight.

There's still a great deal of work to be done before RFID really takes off. Most companies are just figuring out where the benefits are, what data they can collect and how they can use it to change processes and cut costs. The EPCglobal standards for sharing data over the EPCglobal Network will be critical, because many of the benefits come when supply chain partners collaborate. EPCglobal is expanding the number of its Business Action Groups and subgroups working to create the standards that will turn RFID data into actionable information. Many companies across the retail/consumer packaged goods, health care/life sciences, aerospace/defense and transportation/logistics sectors are contributing to the creation of standards for sharing data.

I'm not sure if we are completely out of what Gartner calls the "trough of disillusionment," but clearly some companies are climbing Gartner's "slope of enlightenment." It might take several more years to reach the "plateau of productivity," but the conversations I've been having over the past few months have been very encouraging. As H. D. Smith's Kashmer said to me: "It's all good. It's all good."

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below.