RFID technology has been around for decades, with its use traced back to World War II, when it was used in a rudimentary form to track aircraft. Six decades later, the technology is going mainstream.
Industries across the globe are finding new use cases for RFID, and as the technology matures and prices drop, it becomes a more affordable option for applications like asset tracking, tracking work-in-process and generally creating better visibility for those companies that deploy the technology.
Each month, Terso Solutions will examine the use of RFID in a particular application or industry. Our first column provides a brief glance at the impact RFID is having on specific industries. In the future, we’ll examine use cases for RFID, the science behind it, privacy issues, pricing, how the technology interacts with the public, and other timely trends.
Retail: This is currently the sweet spot for RFID, especially with apparel retailers, who are applying RFID to individual garments to limit out -of-stocks, reduce shrink and re-direct labor from the back room to more customer-facing roles. Retailers like American Apparel, which implemented item level tagging a couple of years ago, have recorded double-digit sales gains from having the right product on the store shelves. In early November, a group of retailers including Walmart, JC Penney, Kolhs and Dillards unveiled the Item Level RFID Initiative. The consortium is designed to set standards for item level tagging in retail, and is expected to greatly accelerate the use of the technology in the retail sector. Drew Nathanson, senior RFID analyst and director of research operations at VDC Research Group, expects the retail industry to consume at least 3.4 billion RFID tags by 2014. That number is up from 400 million this year. It’s expected that RFID will become ubiquitous in the retail shopping experience within several years
Healthcare and medical: Like the retail sector, the healthcare and medical industry is interested in using RFID to increase visibility, especially with high-priced medical items like heart pumps and other implantable and surgical devices. Hospitals are also using the technology to track mobile assets like wheel chairs and IV pumps. The Disney Family Cancer Center in California has actually turned to RFID to enhance the patient experience by storing certain patient preferences and customizing hospital room settings such as music, lighting, temperature for each patient.
Pharmaceutical manufacturers and distributors think RFID could be the key to eliminating costly counterfeiting and supply chain theft. Pfizer, for example, uses RFID to track Viagra, while Purdue Pharma has used the technology for years to track the supply chain for OxyContin, a target for thieves and counterfeiters.
Aerospace: This is another rapidly developing market for RFID technology. While airports like McCarran International in Las Vegas have used RFID for baggage tracking for years, manufacturers like Boeing and Airbus — and airlines themselves — are finding multiple use cases for both passive and active RFID systems. Boeing and Airbus are using the technology to track work-in-process, which can provide huge productivity gains by locating parts quicker. Airbus also uses RFID to provide visibility for more than 500,000 hand tools in use at all of its locations.
In addition, Boeing has used RFID to help airlines to streamline maintenance operations when it comes to government-mandated inspections for equipment like the drop-down oxygen masks on airplanes and life jackets stored under airplane seats. It typically took a crew of two people 13 hours to check all of the oxygen tanks. By using RFID tags, the task was accomplished in less than 10 minutes.
Boeing is also rolling out RFID-enabled storage freezers at all of its facilities to better track tubes of sealant used to manufacture planes. The company saved thousands of dollars in a pilot program designed to reduce spoilage.
Waltham, Mass.-based Tego recently announced it is ready to manufacture millions of high-memory tags that can store large amounts of product information, including manufacturing and maintenance history. The airline and automotive industries are expected to be major markets for these high memory tags.
Banking/financial: The federal Sarbanes-Oxley Act requires most banks and financial institutions to perform frequent inventory checks of their IT equipment like servers and blades. Before the use of RFID, this was a manual process requiring teams of workers. A full inventory often took days to complete. With RFID, some financial institutions are accomplishing the task in hours. Labor savings add up quickly when you consider that major banks like Wells Fargo and Bank of America have hundreds of data centers that require IT asset tracking. The use of IT asset tracking is expected to spread from the banking and financial community to industries like insurance and telcom, and others that use large amounts of IT assets.
The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of Wisconsin Technology Network, LLC. WTN accepts no legal liability or responsibility for any claims made or opinions expressed herein.