|Home||Internet of Things||Aerospace||Apparel||Energy||Defense||Health Care||Logistics||Manufacturing||Retail|
The Mood of the EPCglobal Community
There's a sense that things are not moving as quickly as people expected, but progress continues to be made.
Sep 19, 2005—It's hard to sum up the mood at last week's EPCglobal US Conference in one word. There was a lot of optimism about the year ahead and some satisfaction about the state of the market, but there was also a lot of frustration that things are not moving more quickly. Let me give you my impression of where we are, based on dozens of conversations I had at the event with leading early adopters, manufacturers under mandates, those working on the Electronic Product Code standards and large and small providers of RFID products and services.
First, there was a sense among the attendees that the market has paused for a break. Large consumer products goods manufacturers are currently tagging a small number of stock keeping units (SKUs) being sent to a few distribution centers and stores in Texas for Wal-Mart, Target and Albertson's. These manufacturers have not been asked to increase the number of SKUs they are tagging, nor to tag shipments of currently tagged SKUs to other geographic regions.
Retailers say they are not slowing down their work. One major retailer is focusing on developing the business case for deploying EPC technologies—in particular, on figuring out how EPC data can be used to drive business value. The head of the project told me there's no reason to expand the number of stores with interrogators until the company understands how it will benefit from the technology. Other retailers are doing a great deal of research to understand the potential benefits of RFID and are working with some suppliers, but they have no immediate plans to announce mandates.
Manufacturers are somewhat frustrated by the quality of data they are getting back from retailers. For example, to get the data, suppliers must first log onto Retail Link or Partners Online, extranets hosted by Wal-Mart and Target respectively, and download spreadsheets. They must then dig into the spreadsheets to try to make sense of the movement of products—and sometimes the data is so ambiguous, there's nothing to be learned from it. One supplier of food products to these two retailers told me that a tag on one case was read more than 19,000 times.
Despite some frustrations, there was a lot of optimism at the event for two reasons. First, these data issues are being addressed. The software action group is making progress on defining structures and protocols for EPC data, which will be shared securely over the Internet. Instead of manufacturers pulling Excel spreadsheets from retailers’ extranets, retailers will soon begin pushing data in an agreed upon format to suppliers using Applicability Statement 2 (AS2), a method of doing electronic data interchange (EDI) over the Internet.
The second reason for optimism is that the first samples of second-generation EPC tags have performed well in lab tests. I spoke to several end users who say tags based on the first batch of chips from Impinj have a few minor issues that need to be addressed, but that the performance is superior to Gen 1 tags, as expected. I also spoke with folks from Texas Instruments and Philips Semiconductors, who say the initial batches of their chips are performing well in tests.
So what are the prospects for next year? Peter Regan, vice president of global visible commerce solutions at Unisys, says his company has examined a lot of research and concluded that the tipping point will likely come in late 2006. He points to the fact that Gen 2 tags and interrogators will be widely available, data standards will be set, companies will find ways to improve read rates and mandates will drive volumes up and begin to lower tag costs. He believes retailers, CPG manufacturers, airplane makers and the U.S. Department of Defense will all increase their use of RFID systems during 2006.
We at RFID Journal hav said on several occasions that we think the tipping point will come toward the end of 2006, or in the first half of 2007. It's nice to see that a large, credible company has done research that backs us up, but in some ways, the tipping point is not critical—at least not to end users. They can use the technology today to drive value, and several indicated they are increasingly looking at using EPC and other RFID technologies to track assets and create value within their own four walls (something I've long advocated).
My takeaway from my conversations last week is that although things are not progressing as rapidly as some would like, there has been no backsliding. EPCglobal continues to do the hard work that needs to be done to create standards for sharing data, and to insure interoperability of hardware based on the Gen 2 air interface protocol (see EPCglobal Certifies Gen 2 Hardware). Vendors continue to do the hard work that needs to be done to create products that will work in the real world and drive value. And the early adopters continue to do the hard work that needs to be done to develop business cases for RFID and determine where the technology can be applied profitably within their organizations.
It's not hard to understand the frustration over the poor quality of data and the slower-than-expected pace of adoption, but I'm encouraged by the progress being made. The tipping point might be a year or more away, but clearly the hard work is being done to make wide-scale adoption possible.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below.
Login and post your comment!
Not a member?
Signup for an account now to access all of the features of RFIDJournal.com!
SEND IT YOUR WAY
RFID JOURNAL EVENTS
ASK THE EXPERTS
Simply enter a question for our experts.
TAKE THE POLL
|RFID Journal LIVE!||RFID in Health Care||LIVE! LatAm||LIVE! Brasil||LIVE! Europe||RFID Connect||Virtual Events||RFID Journal Awards||Webinars||Presentations|