Intermec will use RFID technology in its own manufacturing processes and will aggressively pursue RFID business in 2005.
Intermec Technologies Corp. is ready to reap what it sows, and it plans to embed radio-frequency identification technology into its manufacturing and business processes in 2005.
For the past year, Intermec, known for its bar-code and RFID tag and reader technology, has been shipping its mobile industrial handheld computers with embedded RFID tags. The reason? To better manage any service requests that may come in on these products. The tag will let the company access the machine's history if a customer needs to ship a unit in for repair, Intermec president Tom Miller explains. "We haven't turned on the project from the services perspective, but we're ready if and when a product comes in for service," he says.
RFID will also be used to track internal fixed assets, such as computers and servers, as well as products as they move through the manufacturing process in Intermec's facilities. As more companies adopt RFID, Intermec will expand its RFID initiative beyond its four walls, to suppliers and customers.
Today, Intermec tracks manufacturing and shipments with bar codes. It's no surprise, however, that Intermec has its sights set on RFID. After all, sales of RFID tags boosted Intermec's revenue by 16% in the third quarter, ended Sept. 30, compared with the prior year.
Though most companies are still assessing all the benefits they can gain from RFID, many of those paybacks will be found in network efficiencies in 2005, Miller says. "Many people have focused on tags, readers, and protocols, but the RFID network extends to the edge and beyond," Miller says. "We believe in smart readers at the edge of the network to filter the data." Intermec is building intelligence into its reader so it can act as an edge server that can but rid the RFID network of unwanted data before it makes its way up to a database, as well as automate updates to multiple readers simultaneously. "This is to manage the tremendous amounts of data these networks have not handled before," he says. To accomplish some of these, Intermec five months ago extended its two-year wireless relationship with Cisco Systems.
An increase in RFID awareness and use has company executives at the highest level strategizing on Intermec's direction. The company is shoring up resources to take a more focused approach, and in 2005, it will concentrate on developing applications for factory-floor processes, warehouse operations, field service, direct store delivery, RFID supply chain, in-transit visibility, store floor, store operations, and store management for markets that include industrial, consumer packaged goods, transportation and logistics, retail, and government. Intermec plans to concentrate on developing imaging products for retailers and plans to release a new product line for in-store operations in 2005. It also has a contract worth more than $20 million with Home Depot to put mobile computers in all the retailers' new and existing stores.
This year, Intermec raised its research-and-development spending from a traditional 7.5% to more than 9% of revenue, but Miller expects the company will spend a little less in 2005.
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