DaimlerChrysler sees savings in RFID tags

But officials at the automaker said costs associated with the tags still need to drop

By James Niccolai

March 17, 2004 12:00 PM ET

IDG News Service - DaimlerChrysler AG is using radio frequency identification tags to boost efficiency on its automobile production lines, but costs associated with the technology still need to come down, the company's CIO said today.
The German automaker attaches RFID tags to the chassis of each vehicle in production, which automatically transmit data such as the color a vehicle needs to be painted, said Sue Unger, DaimlerChrysler's senior vice president and CIO.
While the tags themselves cost as little as 50 cents each, other parts of the system, such as a metal box that houses each tag, bring the total cost of the technology to almost $20 per automobile, she said. "Once that drops to 50 cents or so, it will have a dramatic impact on what we can do with RFID," she said.
Like other manufacturers, DaimlerChrysler also uses the tags to keep track of supplies and prevent its inventory from being lost or stolen, she said.
Unger spoke at the ITC World Forum in Hanover, Germany, a sister event to the giant CeBIT trade show. Dozens of vendors are expected to hawk RFID-related equipment here this week. The show opens its doors tomorrow morning.
DaimlerChrysler is also a big fan of videoconferencing to improve communications among its 362,000 employees. It conducts more than 100 meetings a day with the technology, saving as much as $14 million a year by avoiding travel and other expenses, according to Unger.
Communication is the biggest challenge facing the company, which has 104 manufacturing plants in 37 countries, she said. DaimlerChrysler uses Web portals where engineering teams in different countries can work together on projects and employees can check information without bugging their payroll and human resources departments, she said.
"Even though the economy is getting better, it's still a huge challenge for us to make sure we are competitive and to make sure we have a strategic advantage vs. our competitors," she said.

Reprinted with permission from

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