EPCglobal US Survey Finds Strong RFID Foundation in CPG Sector

For the 2009 survey, participants were classified as apparel, automotive, chemical, consumer electronics, fast-moving consumer goods, free foods, general merchandise, hardlines (appliances) or other. Of those who responded, 65 percent indicated they were already using EPC-based systems, while 21 percent were carrying out pilot projects, and 7 percent said they were not yet adopting the technology in any manner. No companies, however, indicated they were tagging 60 percent or more of their cases or pallets (which several firms had indicated was a "tipping point" for making the RFID acquisition cost-effective). In the 2006 GMA/IBM study, 45 percent of CPG manufacturers had responded that they believed long-term value could be derived by deploying RFID technology, but little or no value in the near term, while another 45 percent could see the long-term value for specific product categories, as well as some value in near term. Six percent also saw significant short-term value potential for special product categories.

A total of 83 percent of respondents indicated they were adopting RFID due to the request of a trading partner, such as a retailer, while about 13 percent were adopting RFID in order to improve their operations or supply chain. That question was not asked of respondents to the 2006 IBM survey.

Furthermore, the 2009 report lists specific results from some respondents. For example, one user noted that it improved read rates for pallet tags by rotating the pallets as they approached a reader. Another company indicated it raised its read rates by replacing old interrogators with newer models.

Not all news from the survey was encouraging, however. For instance, the overwhelming majority of implementations had been fueled by requests from retailers (such as Wal-Mart), and many of those companies do not collect or utilize data related to the RFID technology in use. Consequently, EPCglobal US indicates, the perceived lack of value of RFID is still an obstacle for users, few of which have created or adopted processes to take advantage of the data resulting from an RFID system.

Still, Hutchinson believes companies are beginning to seek business value in RFID, now that they have the hardware in place and it is operating effectively. "This is a reinforcement that we've moved beyond the question of whether the technology works," Hutchinson states. "We're moving up the maturity curve, so that now we can begin looking at the business case."

In addition, Hutchinson adds, EPCglobal US members have begun asking new questions over the past year. "The tone of conversation has markedly changed," she says. "The questions we've gotten in the last year are less about protocols or readers or tags." Today, the questions are more likely to center on using information, sharing data with business partners and developing systems that can benefit a company in-house, not just in the supply chain.

The full report can be accessed at no cost, at EPCglobal US' Web site.