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How RFID Adoption Varies By Region

Manufacturing Insights has released some findings from the first installment of its 2nd Annual Global RFID Report. In addition to the high-level finding -- manufacturing end users are only cautiously adoption RFID, but "prospects are encouraging" -- the company has shed light on the differences in adoption across geographies.
Feb 16, 2007This article was originally published by RFID Update.

February 16, 2007—Research firm Manufacturing Insights of Framingham, Massachusetts, has released some findings from the first installment of its 2nd Annual Global RFID Report, a multi-part study of RFID adoption among manufacturers. In addition to the high-level finding -- manufacturing end users are only cautiously adopting RFID, but "prospects are encouraging" -- the company has shed light on the differences in adoption across varying geographies:
  • In the Asia/Pacific region, the biggest motivation for end users to adopt RFID is asset tracking and supply chain visibility. Mandate compliance is ranked almost last. (This finding is consistent with the results of a recent survey of Australian end users conducted by GS1 Australia. CEO Maria Palazzolo told RFID Update in a recent conversation that their survey revealed lack of mandate as the single largest inhibitor to Australian adoption of RFID.)
     
  • In stark contrast, manufacturer end users in the US ranked mandate compliance, and its cousin federal regulation, as the primary reason for adopting RFID. Enhanced track-and-trace capability comes second.
     
  • Western European manufacturing end users adopt RFID to achieve supply chain efficiencies. Europe's "tight logistics and smaller retail stores" require more precision across the supply chain, precision which RFID can help deliver.
The regional variances are an important component for industry participants -- namely vendors, who are often US-based -- to keep in mind, as they clearly play a large role in end-user buying decisions. As an example, the conventional wisdom is that European adoption is stunted by tight frequency regulations. While true to a degree, there are other fundamentals at work that need to be considered in order to successfully sell into the European market. For example, the high concentration of countries -- and therefore border crossings -- make the shipment of goods far different than in the sprawling continental US, where a driver can go for days without having to deal with the hassle of a border crossing. (While EU integration has helped this, goods shipment is still not as frictionless as in other parts of the world.) In Asia, the infrastructure is often not as developed, and labor comes far cheaper than in Western Europe or the US, making the economics of labor-versus-technology very different.

Ultimately, vendors would be well-advised to pay close attention to regional patterns of RFID adoption, as any differentiation is worth embracing in the competitive RFID market.
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