The State of RFID/EPC Today:
Where We Are and Where We are Going
Factors That Are Affecting Adoption
Across Major Markets
INTRODUCTION
Mark Roberti
Founder and Editor
RFID Journal
Mroberti@rfidjournal.com
ABOUT RFID JOURNAL
• RFID Journal was founded in 2002
• First RFID publication
• Largest Web site: 250,000 unique
visitors per month and 2 million page
views
• Leading provider of RFID events
• Leading magazine with 10,000 circ.
PRESENTATION SUMMARY
The major developments in RFID/EPC
• Tag price/performance
• Standards development
• Proving the business case
• State of the market today
• What’s needed before adoption rises
PRICE/PERFORMANCE
Tag price/performance improves
with EPC UHF Gen 2 Standard
TAG PRICE/PERFORMANCE
Immediate benefits of Gen 2:
• Lower power consumption = longer read
range
• Faster read rates
• Better ability to read tags on cases on pallets
• Better overall system performance and
reliability
TAG PRICE/PERFORMANCE
Tag Prices Start to Fall in Sept. 2005
• Avery Dennison says it will sell its
AD-220 inlay for 7.9 cents each
(1 million or more)
TAG PRICE/PERFORMANCE
Prices are unlikely to fall much further
• Inlays are about 8 cents
• Tags still cost about 15 cents
• Companies selling at a loss
• If volumes go up, costs will fall further
STANDARDS DEVELOPMENTS
Standards continue to evolve
STANDARDS DEVELOPMENTS
The first truly international UHF standard
• In July, EPC Gen 2 was approved as an
ISO Standard (18000-6C)
• Gives end users confidence in the
interoperability of EPC equipment
• Gives countries, such as China, the opening
to adopt EPC as their national standard
STANDARDS DEVELOPMENTS
EPCglobal’s approves a format for
exchanging data
• XML used to define what tag reads mean
• Reads are associated with time, location and
status and other factors
• Manufacturer can know that a product was
damaged and brought to back room
STANDARDS DEVELOPMENTS
EPCglobal’s publishes EPC Information Service standard in April 2007
• The standard allows supply chain partners to
share data securely
• System can scale so one supplier can send
and receive EPC data with one system
• Should be more cost effective than EDI and
other data exchange systems
STANDARDS DEVELOPMENTS
EPCglobal’s Item Level Work Group
works on standards for item-level tags
• Group is examining need for:
• HF standard
• Greater tag security
• Business and technical requirements
for item-level tagging
STANDARDS DEVELOPMENTS
End users interested in item-level
tagging to:
• Reduce counterfeiting
• Create e-pedigrees for drugs
• Reduce theft
• Reduce store inventory
• Increase sales of high-value goods
PROVING THE BUSINESS CASE
Early adopters prove there are
benefits in using RFID both
internally and across the supply
chain
PROVING THE BUSINESS CASE
Wal-Mart study shows case-level RFID
reduced out of stocks by 16%
• Up to 62% on fast-moving items
• Out-of-stock items with EPCs were
replenished more quickly
• 10% reduction in manual orders
• Reduction in time spent looking for
inventory
PROVING THE BUSINESS CASE
More companies tracking promotions:
• Promotional compliance only 50 to
90%
• Sales rise 20% or more when
promotions executed right
• Increase in total promotional sales of
1%
PROVING THE BUSINESS CASE
Companies are finding internal benefits:
• Airbus
• Metro AG
• Handleman
• Volvo
• John Deere
• Esquel
• Northrup-Grumman
• Lemmi Fashion
• Shaw Industries
• Nick Tentis
ADOPTION RATES
Why isn’t adoption moving more quickly?
• Challenges more significant than many
realized:
• Overcoming physics issues
• Determining where the ROI is
• Changing internal and supply chain
processes takes time
ADOPTION RATES
Whither Wal-Mart?
Stories suggesting Wal-Mart is backing off
are not correct
• Wal-Mart is integrating RFID to the
business side, instead of a special project
• Some pushback
• Technology issues surrounding GDS
•
ADOPTION RATES
Companies across all industries are
experimenting with RFID:
• Pharmaceutical companies
• Health care providers
• High-end apparel and accessory companies
• Create solutions that scale
• Aerospace
• Chemical industry
• Forestry and paper
WHAT LIES AHEAD
Apparel/Footwear companies need to:
• Agree on an industry standard
• Address privacy concerns
• Think infrastructure but deploy in targeted
ways
• Companies must collaborate
WHERE TO GET GOOD INFORMATION
• RFID Journal (www.rfidjournal.com)
• Information you can rely on
• RFID Alliance Lab (www.rfidalliancelab.org)
• Performance testing
• Auto ID Labs (www.autoidlabs.org)
• SIGs on packaging, network architecture
anti-counterfeiting
• EPCglobal (www.epcglobalinc.org)
• Business action groups
RFID EVENTS
EPC Connection 2007
In Partnership with EPCglobal North America
Oct. 2-4, 2007 • Donald E. Stevens Convention Center • Chicago, IL
RFID Journal LIVE! Europe 2007
3rd Annual Conference & Exhibition
November 5-7, 2007
Mövenpick Hotel Amsterdam City Center • Amsterdam
RFID Journal LIVE! Canada, in partnership with EPCglobal Canada
2nd Annual Conference & Exhibition
November 26-28, 2007 • Toronto Congress Centre • Toronto, Canada
RFID Journal LIVE! 2008
6th Annual Conference & Exhibition
Apr. 16-18, 2008
Venetian Hotel • Las Vegas, NV
CONTACT INFORMATION
Mark Roberti
Founder & Editor
RFID Journal
mroberti@rfidjournal.com
Thank You!