Oct 10, 2002Oct. 10, 2002 - Manufacturers have long had to bear the cost of putting anti-theft devices in their products, while retailers got most of the benefits. Eastman Kodak recently backed the Auto-ID Center because it believes RFID can have significant benefits for manufacturers, as well as retailers.
Kodak's interest in RFID and the Auto-ID Center grew out of its involvement in the Consumer Products Manufacturers Association, an industry consortium whose board includes Kodak, Gillette, Johnson & Johnson and Procter & Gamble. All of those companies, except Kodak, have been among the earliest sponsors of the Auto-ID Center.
"We finally got to the point where we could see enough benefits internally," says Lee Dame, Kodak's VP of global integrated supply chain for consumer imaging. "Our customers ? the Targets and the Wal-Marts -- are also starting to get more interested in the technology."
Kodak doesn't mind getting questions from retailers, because unlike with electronic article surveillance tags, the film manufacturer expects to get some benefits from RFID.
"EAS is an expense to manufacturers and a benefit to retailers," says Victor Wasilov, Kodak's e-business manger for consumer imaging in the U.S. "RFID balances it because of the supply chain implications. The cost savings and efficiencies we can get from RFID makes the anti-theft portion of it a freebee."
Kodak has been using RFID for a number of years to track reusable containers in its manufacturing facilities. Dame says that if the cost of the RFID tags got down to 1 to 5 cents, Kodak would be interested in using it on a number of its products. In addition to reducing theft, the technology could help improve supply chain efficiency and give the company greater insight into how its products are sold at retail.
"RFID can provide a better understanding of consumer behavior because you can track what's going on at the shelf," says Dame. "Understanding how product is moving through the store, whether it is coming out of merchandisers, coming off of clip strips or off at-register displays is important information for us, and I'm sure retailers would like to know more about that as well."
And it's not just Kodak's consumer business that would benefit. The company has a healthy health imaging business. Dame sees RFID being used to track where products are and providing track and trace information required by federal regulations.
Will the cost of the RFID tags ever reach a point where they will cost less than five cents? Dame believes it's simply a question of volume. "If enough players see the benefit, ultimately we'll reach volumes where the prices will come down," he says. "It really depends on how broadly the standards are accepted."
