| Part two of RFID and the supply chain. Markets | | | | VDC reports that in the short-term as the RFID |
| The RFID market is currently in a state of increased | | | | market continues to develop momentum, pilot |
| activity and heightened interest triggered by various | | | | programmes will continue to provide a moral boost to |
| regulatory and customer mandates, necessitated by | | | | the industry, by demonstrating the value proposition |
| the need for increased supply chain visibility and | | | | of RFID and can be seen as a prelude for broader |
| security. Visibility is the foundation of supply chain | | | | adoption. According to VDC, the rapid expansion of |
| event management. It is the glue that binds the total | | | | the RFID market has been in the main subdued by |
| business decision-support and technical processes to | | | | the following factors: the lack of industry and |
| integrate the supply chain components, both within | | | | application standards; the approaching saturation of |
| the business, and with external providers, suppliers | | | | traditional RFID applications; the lack of education and |
| and customers.. These visibility and security | | | | weakness of indirect channel support; the highly |
| requirements have come about mainly as a means of | | | | fragmented competitive environment and lack of a |
| cost control and maintaining the integrity of goods | | | | convincing business case - primarily return on |
| within the supply chain and have been influenced by: | | | | investment (ROI). However, vendors have been |
| longer and more complex global supply chains; the | | | | quickly working to resolve these issues through |
| increased threat of global terrorism; increase in | | | | partner programmes, expanded product lines, |
| counterfeit goods; the emergence of grey markets; | | | | standards initiatives, new application developments |
| the need for manufacturers to protect their brands. | | | | and customer education. |
| The increased activity surrounding RFID is | | | | The RFID Printing market |
| characterised by an increase in the number of | | | | The Smart label printer/encoder is an enhanced |
| significant pilot projects by recognised companies and | | | | thermal bar code printer and set to be a significant |
| a plethora of RFID related events, along with | | | | revenue earner, through the extension of existing |
| increased amounts of media attention. Research | | | | product life cycles, whilst requiring minimal |
| suggests that interest in RFID is at its highest point | | | | investments in terms of R&D. These printers are |
| and climbing, yet shipments have not soared to the | | | | capable of printing both traditional bar coded labels |
| levels suppliers previously anticipated. The increased | | | | and on- demand RFID encoded smart labels. There |
| activity, particularly in media coverage led a research | | | | are many reasons for Smart Label Printer/Encoders: |
| firm, A.T.Kearney, to describe RFIDs current | | | | compliance mandates do not relinquish the need to |
| transition as being firmly entrenched in the | | | | have human readable data, bar coded data, along |
| technology "hype cycle." This cycle describes how | | | | with RFID encoded data so there will be a variable |
| technologies are introduced and how they mature | | | | mix of bar coded and RFID tagged items; electronic |
| over a period of time through a boom, bust and | | | | systems fail periodically, having multiple data types |
| stabilisation phase. According to the firm, emerging | | | | can guard against system redundancy; data |
| technologies at first experience a steep "hype" curve | | | | consistency which is a must across the range of data |
| as the benefits and paradigm-shifting characteristics | | | | provides a means of validation. |
| are promoted by industry pundits. A plummet then | | | | The RFID reader market |
| follows into a "trough of disillusionment" as inflated | | | | The greatest demand for RFID readers in the |
| expectations get pushed aside by the reality of | | | | short-term will be of the fixed sort, strategically |
| performance. Finally, as the benefits are better | | | | positioned within warehouses to monitor stock as |
| understood and realised, mature and stable offerings | | | | they are received, stored and dispatched. In the |
| emerge. The research firm indicate the boom and | | | | longer term, as tag prices fall and item level tagging |
| bust and subsequent stabilisation of the E-commerce | | | | becomes more prevalent the demand for handheld |
| revolution as being a good example. In the case of | | | | portable readers will increase. These RFID readers |
| RFID/EPC it is indicated that the path to maturity | | | | can cost from a few hundred dollars for a handheld |
| should be a rapid rise followed by a dramatic decline | | | | reader to up to several thousand dollars for a fixed |
| in interest, followed by a levelling off and industry | | | | reader. |
| consolidation in two to three years. By which time, | | | | The RFID services market |
| RFID hardware will become a commodity product | | | | The market for RFID related services will be in |
| and system integration and services will dominate. For | | | | greatest demand in the near-term given the |
| vendors, 2008/09 are likely to be important years of | | | | embryonic nature of the technology. As companies |
| market definition and time for establishing a firm | | | | strive to meet compliance deadlines they will seek |
| presence in the future of the RFID/EPC vendor | | | | outside help for successful implementation and turn |
| industry. Subsequently, the more astute vendors will | | | | to consultancy firms, which will drive growth within |
| successfully manage this transition and emerge as | | | | the services area. Longer term, it is anticipated that |
| wiser and stronger players. Researchers go on to | | | | software will represent a larger percentage of the |
| suggest that timing will be an important factor, as | | | | total RFID market, given more enterprise |
| first movers can quickly lose their advantage to | | | | deployments of the technology (as opposed to mere |
| savvy competitors that know when to invest and | | | | compliance), leading to software upgrade cycles. |
| when to wait. | | | | Part 3 to follow. |
| Pilot programmes | | | | |