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EPC Adoption Rates Matter

By Mark Roberti
Oct 01, 2008I've been working on a guide to help Sam's Club suppliers meet the wholesaler's requirement for placing RFID tags carrying Electronic Product Codes on sellable units. As I've spoken to business executives, systems integrators and others with experience in tagging goods for retailers, it's become very clear to me that many of the decisions suppliers need to make are influenced by their expectations for EPC adoption. Let's consider two possible scenarios.

Scenario 1: Sam's Club realizes the benefits it stands to achieve and proceeds rapidly with a rollout. BJ's, Costco and other wholesalers quickly follow suit and adopt EPC technology. The volume of products a company needs to tag rises quickly.

Scenario 2: Sam's Club struggles to find a return on investment and after six months abandons EPC technology. Other wholesalers lose interest in EPC. The volume of products a company needs to tag falls to zero.

If you expect the first scenario to come true, you would invest in integrating EPC tagging into your operations—our report will spell out the options and the pros and cons of each—or risk being unable to meet your customers' requirements. If you believe in scenario 2, you would not want to do any integration, because that money would be wasted.

To help Sam's Club suppliers as well as companies in other industries gauge EPC adoption, our cover story, "EPC's Tipping Point," examines the factors influencing it. We also surveyed RFID Journal readers to ascertain their level of use of the technology and understanding of EPC standards. It's interesting that 52 percent of respondents are either deploying EPC technology or making plans in that direction. And they're looking beyond just compliance—most respondents said they have a pretty good understanding of the data-sharing standards that are at the heart of the value that EPC provides.

That's a good sign, but as our cover story shows, many factors—both negative and positive—could influence adoption. Privacy concerns, for example, could slow adoption, while widespread illnesses caused by contaminated foods or counterfeit drugs could lead government regulators to mandate the use of EPCs to track shipments of food and drugs.

It's been my belief, since I first heard of the concept of using RFID tags to track shipments and EPC standards to share data collected from those tags, that the business and societal benefits would be immense. Nothing I've learned since has changed my mind. In fact, I've seen companies achieve benefits no one ever anticipated.

It's just a matter of time until the technology matures, costs come down and companies determine where the benefits are for their specific circumstances. Some companies recognize the potential benefits and are taking steps to achieve them, while others are gambling that the tipping point is many years away. The question is whether they are also gambling their competitive edge.
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