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Will RFID Prices Come Down in the Near Future?

Posted By RFID Journal, 06.14.2011
We are an RFID products provider, and are having a tough time marketing our solutions in India, as customers say the technology costs too much, and that they can use cheap labor to count items.

—Jignesh

———
Jignesh,

I have heard this argument before—that low-wage countries don't need radio frequency identification since they can hire labor to do the work inexpensively. I have not investigated this issue in much depth, however.

Do retailers take inventory with bar codes every day because they can afford to hire a lot of people to do so? Do manufacturers pay a lot of people to check and recheck orders before shipping? Do hospitals hire extra staff members to walk around and locate mobile equipment? My guess is that they do not.

Another thing to consider is that if you hire a lot of workers to perform manual counts, your inventory accuracy will be higher than if you were to conduct counts only twice annually—but your accuracy wouldn't be nearly as high as it would be with RFID. That's because people make mistakes, lose concentration and get tired. If you were to ask 10 people to count several thousand items, you would end up with 10 different numbers, none of them correct.

Will RFID become cheap enough to deploy in the near future? Well, it's
already cheap enough. Many companies in India are already deploying the technology, in fact. Here are some stories we've covered pertaining to this subject:

RFID Facilitates Grain Storage in India
Adani Grain Logistics deployed radio frequency identification to automate steps for receiving, testing and tracking food grain at its two main depots.
www.rfidjournal.com/article/view/7455

Google India Uses RFID to Locate Shared Equipment
At its corporate offices, the search engine company's Indian division is using Google Maps and EPC Gen 2 RFID technology to track thousands of electronic devices.
www.rfidjournal.com/article/view/4354

Reliance Readies for RFID
One of India's largest retailers has been testing RFID technology, and is preparing applications to be used at its hypermarkets and supermarkets, as well as at its electronics and convenience stores.
www.rfidjournal.com/article/view/3825

Wipro Starts Up RFID Retail Pilot
At its company store, Indian software and IT services provider Wipro Technology deploys RFID to better serve its retailer customers.
www.rfidjournal.com/article/view/1064

Citibank Says High-Volume NFC Pilot Shows Strong Usage
The early results of the project, taking place in India, find that 3,000 participants utilize their RFID-enabled phones for payments more often than consumers with credit cards.
www.rfidjournal.com/article/view/7293

Chennai Container Yard Finds RFID Sharply Boosts Productivity
A.S. Shipping Agencies applies reusable EPC Gen 2 passive tags to shipping containers, enabling the firm to track the location of freight throughout its 60-acre yard.
www.rfidjournal.com/article/view/5266

Manufacturer to Track Half a Million Gas Cylinders
Hindustan Petroleum Corporation Ltd. is using passive RFID tags to automate its bottling and distribution process, and to prevent the illegal diversion of its products.
www.rfidjournal.com/article/view/4330

Indian Jeweler Gains Efficiency, Customer Service
Using a system involving high-frequency passive RFID tags and readers, a single employee can record a store's entire 10,000-item inventory in an hour.
www.rfidjournal.com/article/view/4792

These articles show that RFID can deliver value at today's costs. Over the next five years, I think we will see adoption ramp up to the point at which billions of high-frequency (HF), ultrahigh-frequency (UHF) and Near Field Communication (NFC) tags will be consumed each year, which will make passive RFID less expensive and more robust.

—Mark Roberti, Founder and Editor,
RFID Journal

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