Cost Justification Seen As Hinderence To RFID Growth

RFID providers need to do a better job at helping manufacturers understand why and how to implement RFID solutions.

Although the RFID market continues to show some growth, justifying the implementation of these systems is keeping many companies from adding RFID to their budgets, according to results from Manufacturing Insights' 2nd annual RFID report, RFID Worldwide Perspective.

The report reveals that there are significant differences in prioritization, adoption rates, and investment levels that vary by industry and geography, and this is causing disappointing market growth for RFID technology sellers.

Manufacturers need help in understanding how to justify new RFID projects in relation to business objectives, technologies and costs, commented Kimberly Knickle, director of research for Manufacturing Insights.

In the U.S., companies rank mandates and/or federal regulatory requirements as the main reason for an RFID implementation, followed by track and trace improvements, while Western European companies are seeking supply chain solutions to help them manage the tight logistics and smaller retail stores within the EU, which require more exacting systems and processes, the report notes.

Asian companies, though, are using RFID mostly for asset tracking and improved supply chain visibility, and rank mandates among one of the last reasons for RFID deployment, according to the report.

More in Operations