RFID Success Signals

Computerworld -

Radio frequency identification technology has been around for years, but it has never lived up to its hype.

As implementation costs go down, however, there are specific applications, including asset tracking and supply chain automation, where RFID technology makes sense, says Rebecca Wettemann, an analyst at Nucleus Research Inc. in Wellesley, Mass.

"There was a lot of excitement about RFID for a while, and then people took a step back and asked, 'Is this really ready for prime time?' in terms of being cost-effective and in terms of being a better alternative to the bar-code and scanning systems," says Wettemann. "As tags get cheaper and the infrastructure to manage all of that data gets cheaper, there are other areas where RFID makes sense, including in the retail environment."

Companies are also implementing RFID technology to track assets within their own walls or in their parking lots, says Louis Sirico, an analyst and chief technology officer at Silver Spring, Md.-based RFIDSwitchboard, a Web portal that offers companies information about deploying RFID technology.

Sirico, too, sees RFID becoming much more ubiquitous as costs decrease.

"I see RFID tags being built into assets; so it's not a question of tagging something, but there's already a tag built into the product," Sirico says. "I see that already starting to happen. The primary barrier is cost, but as volumes increase, more and more companies will start using it because its benefits can lead to ROI. As demand increases, the products are going to become better and less expensive."

Costs for passive RFID tags have dropped dramatically, Sirico says. In 2000, passive RFID labels cost about $1 each; now they go for less than 20 cents. The price of active tags has also decreased, from $75-$100 to $15-$20, he says.

Global container shipping company APL Ltd. is using the active RFID, real-time locating system and marine terminal software from WhereNet Corp. to track assets in its 300-acre Global Gateway South terminal at the Port of Los Angeles.

"The ability to find something on that 300-acre site is critical to our ability to service our customers because ... they want to know which container is in which parking stall out of the 8,000 or 9,000 parking stalls we have," says Nathaniel Seeds, director of port operations at Oakland, Calif.-based APL.

The WhereNet technology replaces tracking equipment that had been used to scan each row of containers since the facility opened in 1997, Seeds says. Using the old system, finding a container could take upward of three hours, he says.

"I describe that inventory system as 'Park it now, find it later,'" Seeds says. "But over time, as the business grew, it didn't respond quickly enough to the new pace of the operation."