RFID Finding Wider Use, Survey Shows

July 18, 2007

While open-loop supply chain applications remain a major driver for adoption of Radio Frequency Identification technology, closed-loop RFID applications such as asset management are also finding greater use.

An online end-user survey recently completed by ABI Research, Oyster Bay, N.Y., has found that radio frequency identification (RFID) is being used or evaluated for a growing number of applications across a wide range of vertical industry sectors. More than 175 organizations worldwide responded to the survey, providing a detailed picture of the current state of RFID adoption and identifying key markets trends, system requirements, expenditures and more. “The business case and value proposition for RFID is being realized across many types of organizations,” says ABI Research Director Michael Liard. “The results of ABI Research’s 2007 Annual RFID End-User Survey indicate that RFID’s opportunity is not limited to open-loop supply chain management. Other application areas include asset management, security access control, and inventory management in closed-loop environments.” While an increasing number of companies said that they were using, evaluating, or piloting the technology to support a wide number of applications, it remains true in many quarters that “compliance is king”: the single most significant driver for RFID adoption remains the mandates imposed by Wal-Mart, the United States Department of Defense, and, in Europe, the Metro Group. Where there is room for growth and opportunity—and the survey results confirm this—is in supply chain-related applications such as tracking at the pallet, case, and item levels. Not all the respondents use RFID. Some respondents evaluated RFID, but decided not to deploy the technology. The reasons non-users cited for not deploying or evaluating the technology include limited application relevance, the success of existing automatic identification solutions already, concerns about return on investment, and a lack of clarity regarding RFID’s potential benefits.ABI Research www.abiresearch.com