No matter how spectacular a technology may be, there needs to be a solid business case for companies to adopt it in an effective manner. The general consensus is that high-value items will be tagged initially, with lower-cost items being tagged further down the track. "People have burnt their fingers enough to know they need a good business case," Hans Van Schie, area head for innovation and partnership, Teradata told ZDNet Australia .
"RFID has two things. One is tracking an item so it doesn't get lost, and one is speeding up the process," said Van Schie. "It's all related to the real-time organisation that companies have to be." If a company has good data interrogation capabilities and good visilibility of the business their approach to implementing RFID technology would be different to companies who don't have a good view of their business.
"FedEx has great tracking, so their business case would be different to others," said Schie. "In Australia very little data is captured, so once they get this ability they'll start to say "right, I need this data". In Australia [RFID] opens an opportunity for people to start capturing that data and integrating that data."
Tim Moylan, managing director Manugistics, Australia and New Zealand, told ZDNet Australia he didn't think companies fully comprehended the capabilities of RFID, and don't know what the business case for implementing RFID is.
"They need to understand what the impacts of putting an RFID tag on a container are," said Moylan. "It's going to generate a significant amount more information than barcodes...and that's what people are coming to terms with. It's not going to be a static picture of information, you'll know where the container is at various points in time. You'll know what's inside [the container] if there are tags on the goods it contains. You'll know where an item is at a particular point in time."
"You're going to be able to plan a lot more quickly because you'll have a lot more real time information available," said Moylan. "You'll be able to react to events in your supply chain a lot more quickly than you do currently. Your visibility will be a lot higher."
Dawes also pointed out that the back-end systems to support RFID were at least as important as the technology itself.
"People are adopting a wait and see approach before they jump."
-- Tim Moylan, Manugistics
"A product's life cycle may take a megabyte of memory to track it through the life cycle," Dawes told ZDNet Australia . "RFID may take tens of megabytes of memory. So large organisations could use terabytes of data daily. Computer storage is going to be a cost."
Dawes said the problem faced by companies was a lack of standards governing backend systems. "The next move after the standard is developed for the code itself is the standard for the plug and play devices," he said. Dawes warned that companies' infrastructure would be a major determinant of how easy they found it to implement the infrastructure for RFID technology.
"Those companies that put down a standardised platform of business applications with standards across the organisations middleware will have a better shot than companies that have cobbled something together using best of breed and custom integration...They'll have to redo everything," said Dawes. "For the first 3-5 years every company will have to be custom building these things, unless they have a standard middleware that adopts standards coming out of the auto-ID centre."
However, it's not just the supply chain that will see benefits.
"The focus globally has been on the supply chain but we feel the early benefits will be outside the supply chain," said Will Duckworth, wireless expert for IBM. "A lot of companies ship items in containers and the containers are often worth more than the stuff being shipped."
Examples of this include gas and petroleum companies which used canisters and brewers using beer kegs. Duckworth said that there is US$800 million worth of beer kegs - sans beer - in the United Kingdom, so a five percent annual loss rate equated to US$40 million per year.
"Brewers [which implement RFID technology] will get the kegs back more often because they know where they are, this means the kegs will get used more often and less are needed," said Duckworth. "Pubs often swap kegs around so brewers have a problem with keg retrieval."
Other implementations of RFID have nothing to do with products at all. Security companies are putting RFID tags in the property they are meant to be guarding, which the guards have to scan to prove they were present and checking the premises. When the companies used barcodes they found some security guards were photocopying the barcodes and scanning them from home.
A Perth company, RFID Race Timing Systems, has developed a system to time long races such as marathons, triathlons and the like using RFID technology. Competitors wear an RFID tag and at the finish line they cross a pad that contains a reader which automatically registers and records the time.
"It's pretty hard to barcode a cow."
-- John Brand, Meta Group
Even animals do not escape RFID tags. Most Australians are familiar with the requirement to microchip their pets - which is RFID technology - but farmers are now getting in on the act.
Symbol Technologies received grants from the Commonwealth Dairy Regional Assistance Programme (Dairy RAP) and the Gardiner Foundation to improve the testing methods for milk samples.
Each cow gets an RFID tag with a lifetime individual ID number, which is then matched to the barcode on a sample flask containing a milk sample from the cow, practically eliminating the possibility of human error. The flask is then sent to be tested, and any problems can be traced back to the exact cow. This allows farmers to get an accurate picture of their herds' productivity and milk quality.
RFID tags are also being used to monitor herds, with the National Livestock Identification Scheme aiming to track animals from the moment they are born to the moment they die to track food safety. It will also make it easier for graziers to count their herds and sort them in various paddocks.
