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Many Manufacturers Stuck in RFID Pilot Phase

A survey by ARC Advisory Group indicates that performance and price issues are keeping many manufacturing companies from launching full implementations.
By Claire Swedberg
Feb 02, 2007Although a number of companies in the manufacturing sector have carried out RFID pilots, many have chosen not to launch full implementations in light of other technology options and the perceived shortcomings of RFID, according to Chantal Polsonetti, vice president at ARC Advisory Group, a research and advisory firm for manufacturing companies and solution providers.

The proportion of pilots that have turned into implementation isn't that big, Polsonetti says. "There is a lot of pilot activity, but the question is how much will come to fruition."

Chantal Polsonetti
Citing surveys carried out by her company, Polsonetti sees two reasons for that disparity: performance and price. Most notable, she explains, are the physical barriers facing two manufacturing industries—automotive and semiconductors—that commonly use RFID. "These are highly metallic environments," she says, referring to the RF signal interference often found in such milieus. "Leading manufacturers of [typically passive] RFID for manufacturing applications, such as WIP [work-in-process] or error proofing, pride themselves on providing solutions that operate in a manufacturing environment," she says.

Despite such claims, numerous manufacturing companies still see shortcomings. The manufacturing environment can be RFID-unfriendly due to the presence of static discharge, humidity and temperature extremes, she says. "Ability to operate in an industrial environment was a leading functional requirement reported by our end-user survey group."

Nonetheless, Polsonetti believes semiconductors and automotive industries will continue to lead RFID adoption. What's more, she expects to see additional growth in the aerospace and defense sector as well.

The high cost for solutions, both active and passive, still threatens to keep deployments mired in the pilot stage. "These aren't 5-cent label applications," she says. In fact, she notes, they can be considerably more expensive than bar coding—which, for manufacturing companies, is still a familiar and popular choice for such auto-ID applications as tracking WIP, parts, materials and finished goods.

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