Logistics applications to spur RFID sales?

By Staff -- Logistics Management, 5/1/1999

The market for radio-frequency identification (RFID) equipment now totals $655 million, but it should reach some $1.6 billion by the year 2002, says Venture Development Corp. of Natick, Mass. The research firm says that RFID demand will be driven by the continued reduction in tag unit costs, technological advancements, and increased viability of the technology.

RFID tags hold considerable promise in logistics because of their ability to mark and identify shipping units and containers. The tags generally consist of a radio antenna and a microchip. Unlike bar codes, the tags do not require a direct line of sight for reading the encoded data. In addition, the data on some types of the tags can be rewritten.

VDC notes that although RFID may supplant a certain percentage of traditional automatic identification systems, for the most part, the technologies complement one another. It adds that the tags have the greatest opportunity for deployment in supply chain applications such as cradle-to-grave tracking and closed-loop logistics management.

Despite the tags' potential for identifying shipments moving through the supply chain, VDC notes that widespread deployment of the technology faces some hurdles. It notes that RFID's potential will be largely contingent on the development and acceptance of global standards specifying operational frequencies and adoption practices. Because of differing country-to-country frequency availability and power emission allowances, realization of a global standard may be a rigorous process, according to the company