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Unisys Predicts 06 will be RFID's Inflection Point

14 September 2005

Unisys Predicts 2006 will be RFID's Inflection Point

Radio Frequency Identification (RFID) technology will reach a significant turning point by the end of 2006, according to Unisys Global Visible Commerce experts. Companies will move beyond the pilot phase, implementing RFID infrastructures that will increasingly become a core element of their businesses in 2006.

"Sceptics of RFID, who see significant technical and regulatory challenges or no return on investment, are wrong. The same was true with barcode technology 30 years ago - many in the retail and consumer products industry considered it to be costly, technically flawed and unnecessary," said Glenn Bittle, Northern Region Manager at Unisys New Zealand. "Today, barcodes are on 87 per cent of the items in the supermarket, and the adoption rate of RFID across multiple industries is already faster. Many of the key building blocks are already in place, and market drivers across industries will fuel adoption."

According to Unisys, adoption within the aviation industry will more than double in 2006 due to the recent ruling, which allows passive RFID to be used for goods carried on airplanes and aircraft parts. The international shipping and transportation industry will also make great strides by using lessons learned by the early adopters - retail and consumer goods, automotive, healthcare and life sciences, and the military.

"RFID is a winning technology. It will eliminate uncertainty in the supply chain, reduce the need for inventory 'safety stocks' and enhance productivity," said Dr. Donald Bowersox, John H. McConnell University Professor, Michigan State University. "Clearly, we will experience significantly higher adoption rates as RFID applications enhance supply chain visibility."

RFID adoption made great strides with significant milestones in 2005. Building blocks such as the completion of the Gen 2 passive RFID standard - which makes the use of one, secure tag around the world possible - will aid adoption across industries.

"All of the companies I have spoken with that are involved in RFID are justifiably proud of their accomplishments, but there remains a great deal of work to be done. The Gen 2 standard has to receive worldwide endorsement, the price of tags has to drop, and the installation of the technology needs to be greatly simplified," said John Fontanella, senior vice president of Supply Chain Services, Aberdeen Group. "The good news is that we are progressing on the path of RFID adoption and there is no turning back."

Suppliers have been implementing RFID to meet the mandates established by major retailers since 2003. According to Unisys, in 2006 the outsourcing of support for RFID infrastructures will increase more than 400 per cent. This will be a direct result of companies beginning to treat these infrastructures as a core part of their business, which will be a testament to the technology's growing maturity.

"Cynics will be astounded by the technology's increased maturity," said Bittle. "Major advances will also be made as organisations learn to manage the data generated through their RFID implementations and use it to increase efficiencies. Companies will save billions of dollars through these efficiencies in the coming years."


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