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EPCglobal US Survey Finds Strong RFID Foundation in CPG Sector
A report indicates that consumer goods suppliers are pleased with the performance of their RFID deployments, but that they are not yet generally using the technology to improve business processes.
Feb 01, 2010—The adoption of RFID by businesses in the North American retail supply chain is growing due to technology improvements and lower costs, according to a 2009 survey conducted by EPCglobal US. RFID adoption is taking place at a higher rate than the public perception of that adoption, according to the authors of a report summarizing the survey, and users are less concerned about technology costs than the public may think.
EPCglobal US conducted its 2009 EPC/RFID Implementation Survey of business technology users beginning with an electronic survey of its members in the first quarter of last year, with follow-up phone interviews held during the summer. The survey was sent electronically to all 600 EPCglobal US member companies that supply consumer products to retail stores, says James Mannion, the organization's marketing director, and 60 of those members responded.
The findings contradict a perception that RFID deployments have stalled, Mannion says, as 86 percent of those polled, including small companies, said they were either piloting RFID technology or had already deployed it; approximately 42 percent reported annual revenues of $100 million or less. Of those polled, none indicated they were waiting for the price of RFID technology to drop. This could be viewed as an indicator that cost is no longer an obstacle to RFID adoption. It should be noted, however, that members of EPCglobal US typically pursue RFID technology, so if a poll were taken of the general retailer-supplier population, the results might be quite different than those found by EPCglobal.
The best news from the survey, however, involved the reported read rates, says Sue Hutchinson, EPCglobal's product manager: 86.2 percent of survey respondents indicated a high read rate—at least 99 percent of their tagged pallets—and 82 percent saw the same high read rate for tagged cases. "Those are insanely high read rates," she notes, adding that they can be attributed to EPCglobal and ISO standardization, as well as improvements in the technology itself, such as offering many alternatives in tag or reader antenna design, in order to meet the needs of different types of users.
The survey also found that impediments experienced by earlier users of RFID—such as poor read rates in the presence of high levels of metal—were no longer a concern.
The study was initiated as an update to a 2006 survey conducted by the Grocery Manufacturers of America (GMA) and IBM (see CPG Manufacturers Need RFID Framework). After analyzing the 2006 survey results, GMA and IBM issued a white paper entitled " EPC/RFID: Proposed Industry Adoption Framework," which identified three categories among the CPG industry in terms of RFID adoption: EPC Advantaged, EPC Testable and EPC Challenged. Those in the Advantaged category had the greatest rate of deployment due to good read rates, while those in the Testable category had some potential difficulties with RFID reads around their products (due to the presence of liquid or metal), and those labeled as Challenged consisted of companies with the most metal in their reading environment.
EPCglobal US hoped to revisit those definitions to learn whether they were still appropriate after three years had passed. "A three-year span in this market is a really long time when you consider the pace at which this technology is moving," Hutchinson explains, "so we wanted to see if the landscape had changed." The survey, she says, found that the three classifications of RFID adoption were no longer relevant. In fact, she notes, it found that there was no significant decrease in read rates among those respondents who would have been considered EPC Challenged due to a heavy presence of metals.
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