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RFID: No Longer for Big Companies Only

Midsize businesses are turning to RFID to capture the same efficiency and productivity benefits their larger counterparts are receiving—and they're discovering that the RFID road to cost savings is paved with both promise and challenges.
By John Edwards
Aug 01, 2008—Everybody knows about the sweeping RFID initiatives launched by giant enterprises such as Wal-Mart, the U.S. Department of Defense and the Metro Group. Less well-known is the type of RFID system deployed by FirstHealth Moore Regional Hospital in Pinehurst, N.C. The 385-bed community health-care facility, located in a place better known for its golfing than its technological innovation, doesn't need RFID to track and monitor millions of items located at hundreds of sites. Moore Regional's goal is much more basic: The hospital wants to efficiently track and distribute its on-site IV pumps, medicines and other everyday assets. "It's certainly not a global project, but it's important to us," says CIO Dave Dillehunt. "RFID is helping us accomplish a crucial task."

Moore Regional is among a growing number of midsize companies and organizations turning to RFID for the same types of benefits that larger adopters are currently receiving. For the past few years, while giant, global enterprises piloted RFID, overcame challenges, and deployed the technology to streamline an array of internal and supply-chain processes, most midsize companies sat on the sidelines watching—or dismissed RFID as a technology not appropriate for their business. But now, several forces—increasing awareness of RFID's benefits, partner and regulatory mandates, lower tag and infrastructure prices, and standards development—are converging to place RFID on the planning tables of midsize businesses in a wide range of industries.

With increasing awareness of RFID's benefits, partner and regulatory mandates, lower tag and infrastructure prices, and standards development all converging, midsize businesses are planning to use RFID in a range of industries.

"We're settling into a pretty healthy growth curve [in midsize businesses]," says Dan Mullen, president of AIM Global, an international trade association for the automatic identification and data capture industry, headquartered in Warrendale, Pa. Mullen points to a May 2008 study from ABI Research showing that RFID is poised to become a $9.7 billion industry within five years as proof that more midsize companies are adopting the technology. "It's not only giant, global companies driving this growth," he says.

But while interest in RFID is growing among midsize businesses, these companies face some unique challenges in adopting the technology, says Chris Wassel, program manager at the RFID Center of Excellence, a venture of Penn State Erie, The Behrend College. "They have smaller R&D and implementation budgets than most larger companies," he says, "and they may not have a large enough workforce to designate someone to learn about and implement the technology."

Still, midsize businesses have some important advantages over mega-corporations. Some, for instance, have yet to even advance to the bar-code stage for tracking assets and shipments. "Such firms are in a perfect position to leapfrog to RFID," Mullen says.

In addition, midsize companies are less likely to be encumbered by bureaucracies, so they can get approval for an RFID project much faster than a very large company—and can even adopt cutting-edge RFID applications. At Moore Regional, an RFID-enabled robotic pharmacy distribution system, developed by Pittsburgh-based Aethon, is giving the hospital the ability to effectively track and distribute medications, devices and assets across its facility. "RFID ensures that the staff not only knows where the equipment is, but can have it brought directly to the point of care, so they don't have to leave the patient care area," Dillehunt says.
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