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New markets embrace RFID

9/30/08 | John R. Johnson | email

It looks like 2008 is shaping up as the year that RFID begins to reach maturity – or at least offer viable options for return-on-investment. The technology still needs to come down in price and overcome privacy concerns, but some new case studies coming to light demonstrate a wide range of new use cases – all with tidy ROIs.

In an industry that is notorious for running late, [RFID Technology] could help airlines improve on-time performance.

"A number of companies have made big bets on RFID technology," says Joe White, vice president of RFID business development at Motorola. "Two years from now, I think people will look back at 2008 as the year that those bets started to pay off."

The bets are being placed in all kinds of industry, in all corners of the world. One of those wagers is being made by Spain's national postal service, which has rolled out RFID at 37 mail depots, with more likely to come in the future. In addition, Boeing has demonstrated that RFID technology can eliminate hours of costly labor from the in-flight inspection process for airplanes. In an industry that is notorious for running late, the development could help airlines improve on-time performance.

Mike Liard, research director for RFID & Contactless at ABI Research, says that a recent ABI study confirms that RFID is being used in a growing number of applications across a wide range of vertical industry sectors.

"RFID opportunities are broad in today's market," he says. "Virtually every economic sector and industry where data needs to be collected or objects need to be tracked holds the potential for RFID applications."

Correos – the national postal service of Spain – is using RFID to track mail tagged with UHF RFID tags to monitor and manage mail delivery service nationwide. Ashley Stephenson, CEO at Chelmsford, Mass.-based Reva Systems, says that dock doors equipped with RFID portals capture data as letters and parcels move in and out of each processing depot. Reva's unique RFID infrastructure, which is installed at each location, controls the portal readers and processes the RFID tag data for location accuracy. Data is then delivered to Correos' enterprise backend systems. The depots use Motorola XR480 fixed RFID readers.

Eventually, the system could be rolled out to Spain's entire network of 200 depots, but use at the individual post office level is doubtful. Many European countries are also considering RFID for their postal systems. Peter Blair, director of product marketing at Reva, says the U.S. Postal Service has had discussions with his firm and with other RFID vendors, but has not yet announced a pilot program.

The system in Spain allows the postal service to track the movement of tagged mail in real time through its network, enabling Correos to improve the overall quality of the mail service for millions of customers. Up to 50,000 tagged mail carts, mail trays, or individual parcel pieces move through the system at once. Correos sees the system as a competitive advantage against companies like DHL and other overnight couriers.

While RFID is revolutionizing the way mail is delivered around the world, it may have an even bigger impact on the airline industry. Boeing has 40 pilot programs running at numerous manufacturing sites, including Philadelphia, St. Louis, and Puget Sound, Wash., where the technology has resulted in huge labor savings for receiving raw materials. RFID has already saved Boeing over $1 million a year for an application that tracks temperature sensitive sealants used in the manufacturing process. In addition, Boeing's pilots track tool cribs usage and reduce cycle times.

The technology could prove even more beneficial for in-flight applications, such as safety checks on the life jackets stored under each seat. Ken Porad, who heads up Boeing's automated identification program, says that it typically takes two workers 30 minutes each to make sure working life jackets are present under each seat before each flight. Boeing has demonstrated that by using RFID, the process can be completed in five minutes. At JFK Airport, where 1,000 flights depart on a typical day, RFID could eliminate about 900 man hours of labor per day for that one application.

RFID could have the same impact when it comes to inspecting oxygen masks that are stored in the ceiling above seats. Boeing's tests show that affixing RFID tags to the oxygen units could reduce the inspection time from 13 hours to approximately eight minutes.

RFID is currently approved by the Federal Aviation Administration for uses on the ground only. Porad expects that the FAA will approve RFID for in-flight use sometime next year.

"One of the most dramatic things I've seen over the last 12 months is the spread of RFID to many different verticals," says Stephenson. "It just keeps growing. New industries are taking advantage of the same tags and readers in their own respective spaces and coming up with new use cases."

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