Why VARs Can’t Dismiss RFID

By Tom Beusch, Miles Technolgies — August 16, 2012

For several years vendors, analysts, and solutions providers have tried in vain to predict “the year for RFID.” But, serious obstacles such as expensive tags, slow read rates, inaccurate reads, and impenetrable obstacles such as liquids and metals have kept RFID from reaching its full potential.

With all that said, RFID technology has recently made significant strides. Whether you’re a potential user of RFID technology or an IT solutions provider/VAR, now is a good time to take a second look at the real state of RFID.

1. RFID ROI Is No Myth
Businesses that have implemented RFID and real-time location systems (RTLS) to track assets and improve security are reporting clearer benefits and shorter payback periods than ever before. According to an Aberdeen Research study, businesses can realistically expect full ROI for RFID-based processes in 30 months, and sometimes as low as 18 months.

Consider the aerospace giant, Boeing. After testing Zebra smart label printer/encoders, Boeing decided to use RFID to identify critical parts on its Dreamliner 787 aircraft in order to help improve maintenance operations, save time during pre-flight inspections, improve traceability and safety, and streamline record keeping. After more than 1,500 flight hours of testing, Boeing reported 100 percent read rates and 100 percent data accuracy, giving it the confidence to move forward with its RFID tagging project.

2. RFID In Healthcare Predicted To Be $1 Billion Market
According to Kalorama Information’s report, The Global Market for RFID in Healthcare, RFID is playing a growing role in tracking staff members, patients, hospital equipment, and patient medications in order to improve the current state of healthcare. For example, RFID can be used to identify a staff member approaching a soap dispenser and can confirm the amount of time a staff member spends washing their hands to help reduce the spread of infections among patients. Additionally, RFID tags can be used in patient wristbands and medicine containers, significantly reducing the likelihood of patients receiving the wrong medicines or incorrect dosages. Applications like these will push RFID to become a $1 billion market in healthcare in the near future.

3. Several Vertical Markets Are Reporting Compelling RFID Benefits
Businesses in other verticals such as government, transportation and logistics, pharmaceuticals, food and beverage, warehousing/distribution, consumer goods, automotive, and utilities are citing business benefits from RFID. Depending on the project goals, common objectives RFID is used to address include saving time, preventing errors, ensuring process integrity, and performing functions that are beneficial to the organization.
In fact, an Aberdeen Group benchmark report revealed that companies employing RFID-supported processes for at least six months realized the following benefits:
  • Average cycle-time reductions of 19%
  • A 27% reduction in safety stock
  • A 24% improvement in change-over time
Many RFID applications achieve viable ROIs because users now have the flexibility to choose from an array of technologies (including tags ranging from high frequency to ultra-high frequency), and they can tailor their solution to solve specific business needs. Processes in which manual data collection creates data errors or other bottlenecks are prime candidates for RFID solutions. Even though the days of boldly predicting RFID’s arrival are behind us, the improvements that have occurred over the past couple of years and the studies that have been conducted prove that RFID is ready for primetime.

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