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Optimism in the Age of Realism

Vendors report that orders are picking up and end users are more focused on how RFID can solve their business problems, according to Baird's Reik Reed.
Posted By Mark Roberti, 05.24.2007
Tags: Supply Chain
Reik Read, a senior research analysts at Robert W. Baird & Co., an international financial firm, writes a monthly report on the radio frequency identification industry and the leading publicly listed RFID companies. I was reading his May report when I came upon a section labeled "Optimism at RFID Journal LIVE!"

In it, Read writes: "We were encouraged to hear several hardware, software and services vendors indicate that their overall business opportunities for Gen 2 and HF products seem to be on the rise. This is in sharp contrast to attitudes from just six to nine months ago, where business opportunity seemed weak. Pipelines are becoming more high quality as end users are better grasping how to use RFID, and as equipment quality and software capability increase. We expect end users that have deployed RFID in a single location successfully are contemplating multi-site rollouts. Vendors seemed pleased that the show had a good number of end users, and commented that the number and quality of sales leads was improving."

I think Read is right on the mark. Things have changed. Six to nine months ago, vendors were complaining that companies under mandates to tag goods in the supply chain were dragging their feet and volumes of tags and readers being purchased were small. Today, the focus has gone well beyond mandates. End users are more educated about what RFID can and can't do, and they are focusing on specific business problems that RFID can solve. This is a healthy maturation of the industry.

At the same time, Electronic Product Code technologies are starting to get some real traction in the supply chain, as suppliers under mandates are discovering opportunities to boost sales by reducing out-of-stocks and promotion execution. My prediction is that interest in closed-loop (that is, internal) applications will continue to be strong, but that open-loop applications, where the top-line potential is much greater, will also begin to generate some real excitement as companies see exactly where EPC technologies can deliver value today.

My goal is to have a full day of real-world case studies lined up for EPC Connection 2007, EPCglobal's fourth annual conference and exhibition, which we are helping to produce. The event will be held in Chicago, Oct.-4. I'm confident the leading early adopters, who boast off the record of the great strides they are making, will be ready to step forward and discuss the benefits they are starting to achieve.

It's an exciting time for the industry, because we've gone beyond the hype and the promises of transformational change. We're now into the Age of Realism, and the fact that both end users and vendors are optimistic about the value RFID can deliver at a time when the hype has dissipated shows the technology's strength and the industry's health.

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