German Study Shows Companies Dissatisfied With RFID's Ability to Meet Goals

By Rhea Wessel

April 9, 2008—Decades after RFID was first commercialized, bringing consumers everything from keyless car entry to blood-tracking systems, businesses are using the technology only in isolated projects, according to a survey of 100 German companies, most with more than 1,000 employees and sales of €100 million ($158 million) per year. What's more, half of the respondents said that at best, they were only partly happy with the technology's ability to achieve the business goals their company had set.

The survey was performed by the Fraunhofer Institute for Production Technology (IPT) in Aachen and P3 Ingenieurgesellschaft, a consulting company that spun off from the institute in 1996. The Institut für Distributions und Handelslogistik des VVL (Institute for Distribution and Trade Logistics) in Dortmund performed a comparison of technologies. Both the survey results and technology comparison were incorporated into a report released late last month. P3 expects companies in all sectors that are considering RFID projects to be interested in the report, though the firm will not reveal the cost of purchasing a copy.

From an initial pool of 1,200 companies, 100 companies in the logistics, mechanical engineering, automotive, aerospace and electrical engineering industries responded to the survey. The questionnaire featured approximately 40 broad questions regarding the use of RFID or other automatic-ID technologies, as well as expectations for the supply chain. The questions asked included, Which division in your company drove or is driving RFID? In which areas do you see potential for RFID? Did RFID deliver what you expected?

Ulf Glaser, the head of P3's auto-ID business unit, says, "I believe that competition in the future will be among companies' logistics processes, instead of their products and services." This belief is the reason Glaser strongly supports RFID, a technology he says will improve companies' logistics, as well as other processes. Still, he says, the study's results surprised him.

"Given the potential of RFID to improve business, IT and logistics processes, as well as the importance of logistics, you would think businesses would see RFID as more than an IT project," Glaser says. "After all these years, businesses still don't appreciate RFID for what it really is—a tool for improving the efficiency of countless business processes. If I leave a message at a company for the person in charge of RFID, it's always the IT department that calls me back, not the management. In other words, RFID has not yet reached the CEO suite."