Speakers debate RFID benefits, challenges

IDG News Service - While speakers at EPCglobal Inc.'s U.S. conference today talked up the benefits of radio frequency identification, analysts watching RFID adoptions said many U.S. companies are still waiting to see a clear reason to adopt the technology.
EPCglobal, which focuses on industry-driven standards for the Electronic Product Code to support RFID, trotted out several speakers who talked about how RFID tagging can help companies track their products, cut down on theft and reduce supply chain costs. Scott McNealy, chairman and CEO of Sun Microsystems Inc., spoke to attendees of the Baltimore conference on video, saying the concept of an EPCglobal network that securely connects products to manufacturers and retailers throughout the supply chain has graduated from a futuristic concept to a reality.
"We are able to go into the supply chain and do some very interesting things," McNealy said, as executives of EPCglobal and member companies demonstrated a Web-based product-tracking system that allows manufacturers to ensure that enough of their products are on the shelves at retail stores.
Procter & Gamble Co. CIO Steve David said the company is using RFID to distinguish genuine products from counterfeit products, including fragrances and even shampoo. The company also uses RFID to identify and recall outdated products -- an important use, since customer attitudes about products can decline if their toothpaste doesn't taste fresh or their laundry soap has lost its scent, he said.
RFID uses small computer chips and antennas that are integrated into paper or plastic labels. Those chips can then be read by an electronic scanner. And unlike bar codes, RFID chips withstand dirt and scratches and can be scanned from distances upward of 25 feet.
After the crowd of about 1,400 attendees -- including integrators, manufacturers and retailers -- heard about the benefits of RFID, a trio of analysts explained that many RFID users are adopting the technology because they have to. Wal-Mart Stores Inc., a leading adopter of RFID, plans to phase in use of RFID, with major suppliers of its north Texas stores required to use RFID chips on pallets and cases by January. The U.S. Department of Defense plans to require suppliers to use RFID tags by early next year.
Many companies, trying to comply with requirements by the DOD, Wal-Mart or other retailers, are taking a "slap-and-ship" attitude about RFID by making minimal investments to meet the requirements, said Reik Read, an analyst at Robert W. Baird & Co.
Requirements from Wal-Mart and other RFID backers are driving major investments by technology vendors, said Philip Alling,