NCOF Speakers: RFID's Time Is ComingGRAPEVINE, TX -- Radio-frequency identification technology, or RFID, is nearing the point where it will be positioned for widespread acceptance in the logistics industry, speakers at the National Conference on Operations & Fulfillment here said yesterday.
The obstacles to acceptance, which are mainly cost-related, are falling, said Steve Muliak, partner with The Progress Group, Atlanta, and John Baker, president of Venture Research, Dallas.
Many in logistics are holding off for much of this year but will look to the fourth quarter to begin buying RFID technology, with an eye toward implementation in 2006.
"There's a lot of people hanging out and waiting," Muliak said. "But this thing is a rolling steam engine, and it's going to arrive shortly."
RFID is a tracking technology for managing inventory and shipping. Unlike barcode readers, which scan a visual image of a barcode to collect data, RFID readers pick up a signal from a tiny transmitter.
A desire to improve operations performance partly will drive the shift to RFID, Muliak said. However, the primary movers are outside the direct marketing industry: Wal-Mart and the Department of Defense, which are mandating that their suppliers use RFID.
RFID is still in an immature phase, Baker said. One obstacle is that there are two competing data standards, which is driving up costs.
Another challenge is to make RFID tags smaller and cheaper. Tags consist of a silicon data chip, an antenna for data transmission and an enclosure that provides the outside casing of the tag. They are smaller than an ant's head, Baker said.
The technology is advancing to solve these problems, Baker said. The "holy grail" of RFID technology is a chip enclosed inside a paper label -- the paper itself acting as the antenna -- that can be placed on products.
Scott Hovanyetz covers telemarketing, production and printing and direct response TV marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters