Taking RFID’s Temperature in the Middle East

By Mark Roberti

The region is lagging behind in adoption, but it's clear, from RFID Journal LIVE! Middle East 2010, that some end users understand how they can benefit from the technology.

Last week, we held our second annual RFID Journal LIVE! Middle East event. Last year's conference was somewhat disappointing; we had great speakers, but the turnout was less than I had hoped for, due to the economic crisis and perhaps the lack of awareness in that region of radio frequency identification. We hadn't planned to hold a second event until the market matured a little, but I was approached by several vendors that felt LIVE! Middle East could help to promote awareness. So I agreed, knowing we would lose money on it.

The event this year was, shall we say, "intimate." We had approximately 85 people onsite, some of whom were from the largest automotive, oil and gas and construction companies in the region. These end users were more engaged than last year. They recognized that RFID could help them track assets, tools, vehicles, workers at hazardous job sites, and more. The questions asked of each speaker made it clear that attendees were really trying to understand how to deploy systems that would deliver value.

Several end users in the audience said they had deployed RFID systems that had not done the job for one reason or another, and that they ultimately had to be pulled out. These companies were still seeking solutions to their business problems.

RFID has always suffered from vendors and systems integrators who over-promise and under-deliver. One speaker noted that salespeople will claim tags can be read from 30 to 40 meters (98 to 132 feet) away, while engineers implementing an RFID system will say the distance is actually 10 to 15 meters (33 to 49 feet).

It's clear that the Middle East is behind, both in terms of education and in having a base of businesses that can deliver effective systems, so we'll continue to work on educating end users in the region. I think there are more services companies in that part of the world seeking to develop RFID expertise, because they recognize that there is a real business opportunity here.

The truth is that the region needs RFID, and here's why: First, most goods are imported, from seafood to apparel. That means products need to be tracked as they arrive by sea or air at ports, and as they move from ports to distribution centers, and then on to retail outlets. Given the oil wealth in the region, perhaps end users could afford to absorb the cost of inefficiencies in the supply chain. But the Middle East, like all areas of the world, has been hit hard by the global recession, and is thus less able to absorb the costs.

Another reason is that RFID can deliver huge benefits to the two biggest industries in the region—energy and construction. Oil and gas firms have huge operations with expensive equipment and tools that move to and from harsh environments, whether oil fields in the desert or offshore platforms. RFID can help track these assets, lower capital expenditures on such items, and reduce the labor costs associated with locating them.

Tracking individuals is another critical issue for oil companies. During the first 48 hours after the Gulf of Mexico disaster, several workers were missing. No one knew if they had perished in the explosion, drowned or gotten to safety. RFID can help determine if employees need to be rescued in the event of an industrial accident.

Construction is another industry in which RFID can deliver huge benefits. Cost overruns on building are very common, and are often caused by materials that don't arrive on a job site on time, or that can not be located. In many instances, i-beams and other critical structures look similar but are custom-manufactured, and must be assembled in the proper order. Sending a worker into a laydown yard to find the right item takes time—and money—but RFID can reduce the labor costs associated with finding materials.

During his presentation at LIVE! Middle East, Carlo Nizam, Airbus' head of value chain visibility, said: "Tools have a funny habit of sprouting legs and wandering off" (see Airbus Reveals the Benefits of an Enterprise Approach to RFID). This is especially true on construction sites; RFID can help locate tools quickly, thereby increasing labor productivity and reducing delays.

It's only a matter of time before RFID adoption picks up in the Middle East, and it's also a matter of education—and of developing an industry able to deploy effective solutions. We'll consult with companies in the region about whether it makes sense to host an event in 2011. Either way, we'll continue to do what we can to show end users how they can benefit from the technology.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog or the Editor's Note archive.