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Radio Frequency Identification (RFID) is making headlines in the business
world as the “next frontier” of supply chain efficiency. RFID is an
automatic identification method, relying on storing and remotely retrieving data
using devices called RFID tags or transponders.
An RFID tag is an object that can be attached to or incorporated into a
product, animal, or person for the purpose of identification using radio waves.
Chip-based RFID tags contain silicon and antennas. Passive tags require no
internal power source, whereas active tags require a power source.
Research from IDC indicates that RFID-related consulting, integration,
management and deployment will grow by 47% this year and reach $2 bn by 2008.
According to KS Raghunandan, director, ASEAN-SA industrial sector, IBM,
“RFID market will grow by 800% at $25 bn by 2025 from $3 bn in 2005.”
Whether it is having greater control over inventory or better time management
of mobile personnel and resources or reduction in maintenance and record keeping
or automated record keeping which increases efficiency and reduces paperwork,
RFID is the one stop solution for all the needs of an organization.
The passive tags can cost as little as 30 cents or even less if bought in
bulk Active tags-those with a battery-can cost far more. Some active tags
even come with temperature or pressure sensors built in, which cost more than
$100. Though it depends on the vendor and the application, typically a tag would
store around 2KB of data.
Even the government is now waking up to the enormous opportunity that RFID
provides for better governance. While addressing the national conference on RFID,
Anup K Pujari, principal secretary, Department of Information Technology,
Biotechnology and Science and Technology, Government of Karnataka, said,
“Awareness of RFID is very significant now and the government is planning to
deploy RFID in public distribution system to avoid theft, to track on trail
criminals and also to monitor traffic.”
According to Krish Mantripragada, director, Global Solution Strategy, RFID,
SCM Solutions Management, SAP, “Currently, more than 16 different industry
verticals are actively using RFID, from the manufacturing to pharmaceutical.
Even many governments are employing the technology for tracking and
identification. Pretty soon, US passports will carry RFID tags. While it started
off as a great retail industry tool, RFID has become much bigger now.”
Though RFID has been a much talked about technology, still India has not seen
any large deployments of the same. Several industry sectors have been
undertaking pilot testing of RFID, but any full-fledged implementation is yet to
take place in the SCM space.
“RFID market in India is still evolving. Adoption of RFID Technology into
Business Application is still not widespread. However, there is enough interest
from various segment into the potential benefits which RFID Technology can
provide,” said Hussain N Zaidi, manager, RFID Solutions, IBM.
IBM had recently announced industry specific solution specific to
Pharmaceutical industry.
GS1 India CEO, Ravi Mathur said, “Retail, automotive and maybe defense
would be the segments taking up this technology first. Exporters have been asked
to do it because the international retail players like Walmart. Large retailers
in India would also use it in future.”
Zaidi felt that manufacturing/distribution segment should drive the growth of
RFID in India. “Clear business benefits and RoI proposition from business
point of view will drive the adoption. However, the cost of tagging the object
will be the key factor from cost perspective.”
Despite high price, international linkages and compliance issues would lead
to the adoption of this technology at a faster pace in India.
Though this technology holds a lot of potential, this is not without
impediments in its adoption. These include high cost of implementation as
compared to traditional bar coding system, economic environment relative to
capital expenditures, lack of education, high tag/reader prices, etc.
Zaidi said that the Indian market is showing adoption towards asset
management, asset tracking, traceability and access control/security
application. However, he felt, “high tag cost will limit the adoption to
solution requiring reusable tags.”
“Cost is an issue when we are talking of putting RFID tags at an item
level. But if we look at the carton level where many Indian players are putting
RFID tags, its not such a major issue,” Mathur said.
A few product applications of RFID in India could be counterfeit detection,
product recalls, efficiency and productivity enhancements, compliance with
international requirement and out of stock management.
The cost of RFID tags has for long been construed by industry experts as
being a huge obstacle to large-scale implementation of RFID technology.
Currently, there are a lot of overheads with duty and import, which is 40%
additional cost on duties levied. Indigenous manufacturing is expected to rid it
of the additional cost.
Recently, Gemini Traze RFID had announced that it would set up India' s
first RFID tag manufacturing facility in Chennai, with an investment of
$2.5 mn. The plant is expected to be operational in October 2006. RFID
also provides a big opportunity for the Indian SIs.
Mathur said, “Currently, there are no hardware manufacturers (tags/readers)
in India, but there are a lot of Indian distributors like Intermec, Symbol etc.
In software, all big software/consulting companies-TCS, Infosys, Satyam, IBM,
HP, Microsoft, SAP, Patni, etc. have entered this space and a huge opportunity
is ready to be tapped by them in middleware, application, integration, etc. in
both India and worldwide.”
Pragati Simlote
pragatis@cybermedia.co.in Page(s) 1
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