RFID Realities

RFID cannot be considered in isolation but should be seen as part of a whole stock management system comprising elements including bar codes, GPRS tracking of vehicles and supply-chain management software, says O'Neil. "RFID won't produce benefits on its own; it has to be part of a whole strategy."

Suppliers

Michelin:
Robert Brescia, Michelin VP of logistics says that as part of an ongoing RFID trial, the tyre manufacturer had seen savings of around 10 to 20 cents per unit. He explains that because tyres are traditionally dealt with as single items when it comes to loading and unloading, RFID technology could really benefit his company.

"If anyone is set to benefit from RFID, it's the tyre industry. All of our tyres are offloaded individually, which means we have our share of logistics problems," he says.

But Brescia adds that the manufacturer was still waiting for the right moment before deploying the technology wholesale across its business. "We are assembling a business case to strike when the momentum is right."

According to Brescia, RFID has the potential to revolutionise the way tyres are identified. This is currently done with labels, which "consumers hate because it takes about 50 miles for the residue left by the sticker to wear off".

Nestle:
The world's largest food supplier, with more than 500 factories and 250,000 employees worldwide, has been trialling RFID at case-and-pallet level all over the world. The company has been collaborating with Wal-Mart since 2003 on tracking dog food through the supply chain.

In the UK, the company has been carrying out a trial tracking Kit Kat product containers, using 900 MHz tags and 500 MW readers. The company claims the study is being broadened out to the whole supply chain from end to end despite some problems with instillation and signals reflecting of metal surfaces in the factory. Chris Tyas, Nestle's group supply chain director adds that there were also some problems with the RFID data, which wouldn't work across the corporate network because of security settings.

"RFID was about twice the cost of the existing barcode technology so we had to find benefits at least equal to that of the extra cost. The savings were mostly in labour costs and day to day or minute to minute factory operations and being able to handle mixed containers," he says.

Tyas claim the company has only scratched the surface with existing trial but until the costs come down, real benefits will be hard to achieve. Also, more retailers need to adopt the technology to make it worth Nestle attaching tags to all products. "The cost of the tags is still about 20 to 30 cents each and we ship 200 million cases a year. We need to make sure we see real benefits from all of these

Technology companies

Microsoft:
Microsoft is out to take a more formal role in the development of radio-frequency identification technology and recently announced that it is forming the Microsoft Radio Frequency Identification Council. Participants in the group include Accenture, GlobeRanger, Intermec Technologies and Provia Software.

Microsoft says it will be providing a "platform," on which the partners can create RFID-based products and services, drawing on its own Windows CE operating system, SQL Server database and BizTalk Server software.

Microsoft, like competitors Oracle and IBM, is working to develop middleware for RFID systems. In January, it added RFID technology to its Axapta Warehouse Management software for small and mid-sized businesses.