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Having crossed the hype stage, RFID is now reaching a status
where interest in the technology is moving from building awareness to testing
waters. In India, the year 2007 will witness RFID pilots growing and the first
few will be looking at linking their RFID systems to their business
applications.
The activity has been talked about a lot in the last couple of
years, with many industry verticals and the Government advertising for RFID
solutions. Some of the prominent ones driving the adoption were the tenders for
supply, testing, acceptance and installation of RFID based systems for NIC
headquarters; LPG cylinder tracking by HPCL; Vehicle tracking by Rashtriya Ispat
Nigam; Indian Airlines asset tracking etc. It remains to be seen how these
eventually evolve after the promising start. Besides this, the railways and the
postal department have also been showing active interest in RFID adoption.
According to Kaushik Yegnan, MD and CEO of SkandSoft
Technologies, there has been a significant shift in the way companies are
looking at RFID-from the earlier skepticism to "ok let's do something
small and check it out first" attitude. Bimal Sareen, founder and CEO of
Avaana India and also president of the RFID Association of India, feels that
while there are going to be increased budgets for pilots this year, few
companies will be looking at graduating beyond pilot to the next phase of
production implementation as well. "Production implementation is the stage
where your business depends on the application and becomes a part of your
business application portfolio," explains Sareen. "Also, we are
noticing a change in the customers' mind set to include RFID in their overall
IT decision making," concurs Shailender Kumar, managing director, BEA
Systems India.
| The current
RFID market size is $4.96 bn. By 2017, it is estimated to grow to $26.88
bn |
 |
The US has
the largest number of RFID projects, followed by the UK where the RFID
market size is one-third of the US |
|
Source: (IDTechEx, RFID
Trends and Forecasts) |
The next wave of RFID, therefore, is not about talks in the air
but hardcore implementation strategies and RoI. In the last one-year, people
have started allocating resources in their budget and looking for business
process where this technology could really help in improving efficiency and
other benefits, points out Avnesh Jain of Hero Honda. The result-enterprises
are now looking at applications to start with and maximizing the RoI through the
right strategy. According to Prasad Putta, founder of Oat Systems, the Indian
market will take the learning's from the US and European markets on which
applications/solutions and the product categories have value, and adopt the
technology in a focused way.
Not Just about Mandates
Contrary to popular belief, WalMart has had little to do with the RFID
adoption in India till now. The Indian suppliers have not yet come under the
purview of the retail giant's RFID mandate for its suppliers. According to
Ravi Mathur, CEO, GS1 India, "The WalMart mandate is currently impacting
more in the US, barring pharma, for the enterprises in the India mandates, are
not yet a big driver as improving their internal efficiencies."
Padmaja Krishnan, director, Marketing, Planning and Research,
CSC India, opines that among the factors driving RFID adoption are the promise
of process optimization, operational excellence, streamlining the supply chain
and increased collaboration across vendors and customers.
| Hero
Honda's RFID Plans |
|
Hero Honda expects a steady
growth in motorcycle demand in the future, as well as a steady increase in
the complexities of manufacturing two wheelers. The company has six
assembly lines at the two manufacturing units and produces 13,000
motorcycles every day in two shifts. It produces one motorcycle in 4.5
seconds. Simultaneously, the spectrum of motorcycle models and colors is
also growing. There are around 100 variants of motorcycles, which make the
manufacturing process very complex. Also, keeping track of feeding the
right material to these lines is a real challenge.
According to Avnesh Jain,
manager, Information Systems at Hero Honda, the company is currently
evaluating the prospects of using RFID in the assembly automation process
for the engine and frame assembly lines. These assembly lines are flexible
and produce 100cc to 223cc engines. The company manufactures entry-level
100cc motorbikes to 223cc high-end motorbikes in multiple variants at the
same assembly lines. The assembly line is sequenced for alternatively
manufacturing for 100cc, 125cc, 150cc and 223cc engines. Jain feels that
RFID will enable the introduction of a process, whereby relevant
components for each of the variety of engines to be assembled are picked
based on the sequencing plan and then moved to the assembly line through
the integration of the SAP ERP system with RFID. |
Perceptions of high capital costs, low read rates and
uncertainty around standards had been some of the factors dampening the
technology's adoption in the country. However, with Gen2 having become widely
available, many low read rate issues have gone away and the uncertainty around
standards has also been resolved to a large extent. According to Kumar, EPC
standards are now more widely accepted which is helping in RFID adoption.
"While the high-costs of the tags is still a challenge by Indian standards,
the good news is that the read rates and reliability of the EPC Gen2 standard
has proven to be much more in conformance to the practical implementation
requirements," he adds. Intel has also, recently, released news about their
new chip that encapsulates 90% of all the features/functions of an RFID reader.
The opening up of the UHF band for industrial applications has further
accelerated the adoption.
Vertical Adoption
Among the verticals that have evinced interest in RFID and undergoing early
deployments are manufacturing, transport and logistics, retail, pharma, and
hospitals. According to Sandhya Sule, senior manager, Product and Technology
Initiatives, Patni, RFID may not show immediate RoI in the existing
manufacturing sector due to an unorganized supply chain in the Indian
subcontinent. However, this segment continues to be the prime beneficiary of the
RFID technology, especially in asset tracking and inventory management.
Retail, which has traditionally been the leading adopter of the
technology worldwide, has now started gaining momentum in India. According to
Putta, there have been several major retail rollout announcements, and some of
them are looking at using RFID right from the beginning. This interest could
lead to large RFID deployments in the Indian retail sector, he adds. Major
retailers are expected to deploy the technology to try and create six sigma
supply chains by error proofing and automating their supply chains. As Sule
points out, the retail boom in India makes it the low hanging fruit for RFID
implementation, especially because the infrastructure and processes would be
state of the art. Page(s) 1 2
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