Manufacturing News

RFID keeps inventory moving

With the current financial situation putting a squeeze on profits, manufacturers are now looking at RFID as a means of ‘cleaning up’ their balance sheets. Katherine Crichton reports.

THE many benefits RFID technology can offer Australian businesses are well documented: improved productivity and asset management; reduced delivery processing times; and increased supply chain visibility just to name a few.

However, with the impact of the global financial crisis just being realised, many manufactures are now turning to RFID to remove trapped cash in their supply chains.

This is something Mike Wills, senior VP, global sales and service with Intermec, highlighted in a recent visit to Australia.

Wills told Manufacturers’ Monthly while wide area mobility applications are the biggest areas of growth for the company now and in the foreseeable future, currently customers’ top priority is all about inventory and working capital improvement.

“In the current economic environment there’s a huge emphasis in the orientation of our products, technologies, solutions helping customers remove trapped cash in their environment. That is the single priority cry with every single one of our customers,” Wills said.

According to Wills, despite the present economic crisis, companies are willing to invest in new technology if they have a clear ROI, which he says RFID can provide.

As a key participant in EPCglobal, Intermec has helped drive innovations in RFID technologies and Wills expects to see incremental improvements in tag and chip designs as well as the ongoing performance of readers and antenna systems.

“We won’t see big step forward gains until a new technology is introduced, but adopters of existing systems will experience increases in overall performance as they develop their experience from implementing the technology in real world environments.”

Wills said Intermec will continue to focus on reader design to ensure every one of the company’s hand-held terminals is adaptable for RFID.

“The premise is that almost every one of our customers at some point will have the need. So the ability to have an existing product that can be adapted for RFID makes the hand-held terminal a better (maximised) investment for our customers and takes it to a completely new technology level,” he said.

In regards to RFID adoption, Wills says he is seeing a stronger growth rate in closed loop applications around the world but a slowdown in compliance applications.

“In closed loop applications there is a very clear line between investment and return. It’s a metric driven project, you know what kind of results you are expecting, you can measure it, and the people that fund it see 100% of the return on it.

“In a compliance situation this isn’t always the case,” Wills said.

A win for RFID

A significant milestone in Australia which is sure to encourage more uptake of the technology locally was the recent ruling by the Australian Communications and Media Authority (ACMA) allowing RFID devices up to 4W of power to be used in Australia in the 920-926MHz band.

This follows four years of significant testing on the use of 4W RFID devices by industry, led by GS1 Australia.

The ruling will now bring Australia’s passive UHF RFID systems in line with international standards and other countries’ regulations.

With the robustness of RFID performance substantially improved by increases in power available, GS1 has welcomed the decision, saying it would bring improved efficiencies and greater ROI for companies wanting to use EPC/RFID systems.

GS1 Australia’s GM of standards development, Sue Schmid, said the decision to approve 4W removed a barrier to the adoption of EPC/RFID within Australia.

“This is a much-needed boost to Australian industry which can now continue its adoption of this technology,” Schmid told Manufacturers’ Monthly.

While she concedes this move doesn’t necessarily believe the floodgates to RFID adoption has opened, it has taken way the uncertainty of whether or not companies in Australia should invest in the technology.

“There’s always been an interest in RFID, even without the four watt ruling but this is a technology which requires some commitment to be innovative.

“Also obviously not having any key leader driving the implementation of RFID is a challenge but again the flipside is that companies are looking at RFID for their own benefit so ultimately they win out rather than having to comply with a mandate,” Schmid explained.

When asked when Australia would experience a mass adoption of RFID technology, Schmid says when compared to the journey of adopting, RFID is still a baby.

“In Australia we have quite an advanced use of the GS1 barcoding systems in many supply chains, but it has taken a long time to get there.

“I think there is this expectation that RFID will be implemented quicker than barcoding, but like implementing any new technology RFID still requires organisational change and this can be challenging.

“We need to recognise that Australia started off with a quite sophisticated set of supply chains, with many of our large retailers already good at using already established data capture technologies compared with some global counterparts.

“Therefore in Australia RFID tends to be used in more non-traditional applications such as asset tracking.”

With a strong adoption of RFID globally, particularly in traceability applications in the US and EU, Schmid says it is vital for Australian companies to keep abreast and research RFID projects.

Intermec 1300 30 44 68.

GS1 Australia 1300 366 033.

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