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Europe Embraces UHF RFID in the Supply Chain

The good news coming out of Europe these days is that big players are getting ready to adopt UHF RFID systems in their supply chains in a major way.

Posted By Mark Roberti, 11.02.2006
Wal-Mart plans to have UHF RFID systems based on the Electronic Product Code standard installed in 1,000 stores by early next year. No one in Europe is even close to that level of adoption of passive UHF technology, mainly because passive UHF systems under the old regulations created by the European Telecommunications Standards Institute (ETSI) provided only about three feet (one meter) of read range. That just isn't enough for most supply-chain applications.

The new ETSI rules give 10 feet (3 meters) or more of read range, and companies in Europe are, not surprisingly, more eager to roll out UHF systems in their supply chains. I spoke with Christian Plenge, RFID project lead for Metro, who affirmed what we wrote in our cover story for the September/October issue of RFID Journal magazine—that after delays in getting UHF systems that work well in Europe, Metro is ready to roll out RFID technology more aggressively.

I also spoke to a woman from another major European retailer, who said her company had a few more issues to settle with regard to which interrogators it intended to use and how it intended to use them. But she said as soon as those are resolved, her company plans to roll out passive UHF EPC systems quickly.

Jan Vink, director of BGN, a large Dutch bookseller, gave a presentation about his company's RFID-enabled bookstore. The company is working with the national book distributor to tag and track every book going to one of its newest stores. He said BGN is planning to roll it out to a second store this year. The funds have been approved. "We're moving ahead," he told me.

Is there an ROI for tagging books? Yes, there is. Jan said that inventory accuracy in some stores during some periods can be around 60 percent. In the new, RFID-enabled store, inventory accuracy is better than 97 percent. The company is expecting a sales increase of 10 to 12 percent because of the ability to get the books people want to buy into their hands when they come into the store. One way it's doing that is linking RFID data to kiosks, enabling customers to browse the store's entire inventory the way they would on the Web.

Sybren Tuinstra is a manager of strategic process development for TNT Express, a major Dutch Logistics company that has done extensive testing of RFID in its supply chain. He said that the company had determined that it would achieve a significant return on investment from a number of applications of UHF technology, including tagging ocean-going containers. The only question is how much funding will be available for those projects, and which ones the company will roll out first.

It would be a mistake to say that the volume of UHF RFID transponders and interrogators sold in Europe is about to skyrocket. As in the United States, rollouts won't immediately drive up volumes because not all suppliers will suddenly start tagging all shipments for all of their customers. Volumes can't build until suppliers see benefits and start to tag more stock-keeping units voluntarily. But all signs point to a faster pace of adoption in Europe in 2007.

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