RFID Pain Now, Rewards To Come
Survey finds implementations of radio-frequency identification can be rough going, and payback may be a long time coming
When UPS Inc. decided to begin testing radio-frequency identification technology several years ago, its approach was something like reviewing a product for Consumer Reports. The logistics company pulled together experts from several different business lines to examine and assess all the different RFID products and services, including tags, readers, printers, middleware, and systems integrators.
It was no easy task. Even though UPS has been involved in RFID industry groups working to define standards since 2001 and has amassed quite a bit of experience and contacts within the RFID community, it took as long as six months in some cases to finish the reports. "Real learning had to take place," says Bob Nonneman, the UPS industrial engineering manager who's in charge of the company's RFID efforts.
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UPS isn't alone. In an InformationWeek Research survey of 114 business-technology executives conducted via the Web in February and March, most respondents say it has been difficult to choose their primary RFID vendors, be they hardware, software, or services providers. Two out of five participants hail from companies with $1 billion or more in annual revenue.
In fact, 72% of the survey respondents using or planning to use RFID say it was extremely or somewhat difficult to select a hardware vendor, 73% say it was extremely or somewhat difficult to select a software vendor, and 87% say it was extremely or somewhat difficult to select a services provider.
That's because there are so many RFID products, many of which are only first- or second-generation versions, and so many RFID startups have yet to establish reputations. "Products don't line up and compare very well," Nonneman says. "The best example of that is middleware, which is a very overused term." The RFID middleware market began to form more than two years ago, he says, and it appeared that the number of vendors in that market increased by 50% on a monthly basis. Every company, it seems, started offering something it called middleware. "Sorting through the RFID landscape can be very daunting, even for a very credible IT team in a midsize or large company."
And once companies have settled on their RFID providers, they're not entirely satisfied with what they get. Of the InformationWeek survey respondents using or planning to use RFID, 14% say they're very satisfied with the quality of the products they've received so far. Only 18% say they aren't satisfied; the majority, 68%, say they're only somewhat satisfied.
"No one has emerged as a market leader," says Steve Banker, an analyst with the ARC Advisory Group, a consulting and research firm that specializes in supply chains.
Nonneman, who says he's somewhat satisfied with the quality of RFID products UPS has tested, isn't surprised by those numbers. "This is an emerging technology, and we are somewhere in the early part of that emerging," he says. "What we've found is that the delivery of products isn't always able to meet the planned or promised time frames. What you also find is that what's announced in terms of product availability and features precedes the actual capabilities by a good measure, by six months or so."