Manufacturers still doubt the benefits of RFID

By Rick Pendrous

- Last updated on GMT

Related tags Rfid

Manufacturers still doubt the benefits of RFID
Concerns about the benefits and costs of radio frequency identification (RFID) among UK food and drink manufacturers are preventing them from...

Concerns about the benefits and costs of radio frequency identification (RFID) among UK food and drink manufacturers are preventing them from adopting this technology, according to new research.

A study* of over 100 manufacturers carried out by the exhibition organiser Easyfairs, revealed that only 17% of companies have introduced RFID or plan to over the next 12 months. This slow take-up is put down to concerns about the benefits and costs involved.

Forty per cent of respondents claimed the biggest barrier to introducing RFID was their lack of knowledge about the technology, while 37% said cost was the main deterrent.

Despite the findings, 38% of respondents reported a desire to improve stock management, while over a third needed better forecasting and 31% said they needed to improve traceability. Almost half (46%) predicted that RFID would be widespread in the sector within the next three years.

Peter Heath, md of Easyfairs UK, said: "[The food industry] is not technology shy, but it is looking for suppliers to explain the bottom line benefits of RFID before it makes the move."

For suppliers to Marks & Spencer, which is pressing ahead with high frequency 'closed loop' RFID tray systems, the arguments in favour are clearer than others, since cost is said not to be such an issue. Worldwide Fruit and Northern Foods, for example, have already installed systems at their plants supplying M&S and Northern is known to be rolling out RFID to others sites over the next year.

Northern Foods is using RFID technology supplied by Siemens, which has just launched new software allowing the integration of RFID systems into business processes. The Simatic RF-Manager manages read/write devices, collects and compresses RFID data and makes it available to the merchandise information systems.

The Simatic RF-Manager can be integrated with Siemens' Manufacturing Execution System (MES) Simatic IT to allow RFID data to be converted to business-related information, which is then used for controlling the business processes.

The holy grail of retailers is to have item-level disposable RFID product tagging. And to this end, Siemens is involved in a joint venture with fellow German printer Leonard Kurz on the development of low-cost disposable printed RFID tags, which make use of the latest developments in polymer electronics. Siemens has a target price of less than e0.1 per tag, but admits that widespread adoption of item-level tagging is still some eight years off.

Siemens accepts that the business case for manufacturers implementing RFID technology is not clear - particularly with retailers opting for different technologies. "It’s a difficult position to be in," said a Siemens spokesman. "Retailers have different ideas … we recognise clearly the difficulties faced by manufacturers."

Meanwhile, The RFID Solution Centre and Intermec Technologies have joined forces to offer an RFID capability study for companies in the food and drink market.

"We recognised very early within the RFID project that validating the capability or applicability of RFID for our specific customers’ environments is essential to ensure projects are not started that will never work with customers’ products and environments," said Simon Storey, business development director with RFID Solution Centre.

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