Archive for January, 2011

Move to cloud computing will accelerate RFID adoption

Monday, January 31st, 2011

For anyone that missed last week’s issue of RFID 24-7, here is our lead story on cloud computing.

Cloud computing continues to gain steam. A study from Saugatuck Technology predicts that almost two-thirds of all new business application/solution decisions will be cloud-based by 2015.

As RFID adoption continues to skyrocket, the benefits of cloud computing are expected to further accelerate deployment of the technology. By utilizing the cloud, enterprises can avoid costly infrastructure build-outs required for RFID technology. Cloud computing can also make the integration of new data seamless, benefiting stakeholders at both ends of the supply chain.

Pallet firm CHEP, Coca-Cola, Vail Resorts and many other companies already rely on the cloud to harness the crucial data that RFID provides them. The sweet spot for 2011 is likely supply chain applications, which are expected to flock to the cloud for hosting of RFID data and operations.

Many experts believe that a cloud-based architecture will quickly enable scalable RFID, eliminating one of the biggest roadblocks to adoption of the technology. Many technology providers are leveraging the cloud to deliver solutions that make RFID and the data mined by the technology more valuable than ever before.

“In the future we see RFID device makers further cloud-enabling their solutions for the marketplace,” Joe Pleshek, president and CEO of Terso Solutions, said during a recent webcast on RFID and the cloud. “You’ll also start to see more supply chain systems leveraging cloud-based RFID solutions.”

The benefits of cloud-based RFID solutions are numerous. For starters, operating in the cloud means that end users can eliminate costly up-front expenses to build-out RFID infrastructure. In addition, users gain the ability to receive state-of-the-art software updates on a regular basis, more frequently than most companies can provide on their own. Cloud-based services usually offer more functionality, and users only pay only for the services they subscribe to.

“According to an RFID end user survey we conducted in Q4 2010, more than 70 percent of respondents cited the following four reasons for adopting a cloud/hosted platform: cost savings, ease of implementation, ease of upgrading/refresh, and speed of deployment,” says Drew Nathanson, director of operations at VDC Research Group. “That figure is even higher when looking exclusively at the Tier II and Tier III communities.”

RFID is being integrated with the cloud in many ways. The Epic Mix app allows skiers at Vail’s five Colorado resorts to track their progress on the slopes and automatically track data from each ski run, including vertical feet skied and days on the mountain. Accessible online or via a mobile phone, the app relies on RFID-enabled lift tickets that are read by readers installed at each chair lift.

Skiers can see their progress online or on their mobile phones and can also share their accomplishments via social media updates. Skiers can also track their friends on the slopes, knowing when to break for lunch, for example. And the whole process is powered by hosting data on the cloud. “Vail Resorts is blazing a trail by using RFID to marry the physical world with the virtual world,” says Patrick Sweeney, CEO of ODIN, the firm behind the RFID portion of the technology.

Coca-Cola is leveraging the cloud to harness information from its RFID-enabled Freestyle vending machine drink dispensers. The machines allow consumers to choose from more than 100 categories of soda, juices and waters. Each vending machine uses 30 flavor cartridges equipped with Impinj Monza tag chips and Indy reader chips. Readers assigned to cartridges record how many times they are used, and data is sent through wireless network to a centralized repository.

“This allows Coca-Cola to pull that information together and to analyze it for near real-time visibility to end user demand for certain flavors, as well as managing the inventory of cartridges,” says Terso’s Pleshek. “This deployment of RFID could only be done by utilizing a cloud-based infrastructure.”

That’s true in the case of CHEP, a pallet management company that includes RFID on all of the pallets it uses for freight deliveries around the world. Information collected from the RFID-enabled pallets and the bar codes of products on those pallets is connected to a cloud integration platform hosted by HubSpan, a provider of cloud-based B2B integration solutions. From that data, rules can be created for different products, such as temperature requirements for perishable goods.

Food manufacturers can put certain rules in place to dictate that certain products be stored at specific temperatures. That information is scanned and pushed up to the cloud, and HubSpan analyzes the data and creates rules that send alerts to end users about that product’s specifications.

“So by using RFID technology, we can drive information that allows businesses to be responsive to situations and be proactive,” says Nathan Cowan, general manager of global sales for HubSpan. “The cloud allows us to segment out those rules on a connection by connection basis.”

Of course, the cloud is not for everybody. Many companies have security concerns about storing data on the cloud, although Cowan says most security concerns are addressable. Companies also worry about a lack of control of data.

“You do lose some control,” says Nathanson. “You might own your data, but you lose some control and that’s one of the barriers for this. People are scared. There is some confusion out there about how the [hosting] companies are going to have ownership or even look at that data. So there are definitely pros and cons.”

While those trust issues remain to be worked out, providers of cloud-based services are emphasizing another kind of trust, that is the trust in knowing inventory information is accurate in real-time. That leads to better collaboration through the entire supply chain.

“When you can provide real time, as-it’s-happening visibility and predictive analytics as to where things will be based on what’s happening today, you create a very powerful, highly trusted, automated way of collaborating,” says Raj Saksena, president and CEO of Omnitrol, a provider of software solutions that provide real-time manufacturing visibility, supplier production collaboration, global asset tracking and product traceability. “That data can now be fed into business intelligence tools in the cloud where people can log in and get the status of things by taking the information as it’s delivered directly from operations.”

As 2011 progresses, look for smaller companies that might otherwise shy away from RFID to utilize the cloud as they begin their initial RFID deployments.

“When we think of the investment in RFID, so much work has to be done to build out infrastructure that it often times dissuades companies from implementing,” says Cowan. “Now that the cloud is being deployed as a way to facilitate information exchange, companies can dip their toe in the water and get greater benefit at low costs.”

Top 5 trends that RFID solutions providers should be aware of in 2011

Tuesday, January 25th, 2011

VDC Research Group has announced its predictions for the key trends anticipated to shape the 2011 RFID solutions market. 2010 has been a banner year for the AIDC market, with many RFID suppliers experiencing double-digit growth.

The top five trends include a continued surge in item level retail tracking; asset tracking applications that go beyond location; the emergence of authentication and anti-counterfeiting as leading applications; increased benefits from solutions convergence; and more revenues will come from new accounts rolling out RFID for the first time.

Here’s a more in-depth look at each prediction!

Adoption of item-level tracking in retail continues to surge: VDC expects item-level tracking applications in retail to continue to expand rapidly in 2011, as the solution is adopted in new accounts, scaled and expanded in existing accounts and embraced globally. Growth will also be further driven as RFID continues to migrate toward the point of manufacture.

Asset tracking applications go beyond location: Asset tracking solutions will continue to expand beyond just providing the location of an asset. They will increasingly be leveraged to provide more information about the asset—its environment, movements and users—as a means to support and enhance business processes, increase asset utilization, support compliance and minimize costs.

Authentication and anti-counterfeiting emerge as leading applications: Product authentication and anti-counterfeiting applications are anticipated to grow quickly and expand into a broad range of verticals over the next 3-5 years as companies look to create a more secure supply chain. These applications are expected to extend the functionality of existing systems beyond track and trace to protect brands, further improving ROI.

Solution convergence will provide key benefits: Although there may be overlap in functionality and capabilities, the convergence of RFID, barcode and other AIDC solutions will provide the end-user more actionable business intelligence with little disruption to existing solutions and processes. The combination of these technologies will be particularly beneficial for applications and environments, such as supply chain and inventory management.

More revenues to come from new accounts: Although approximately 80% of total global RFID revenues in 2009-2010 were from established accounts that have been evaluating/piloting the technologies for at least 18 months, VDC expects a shift in consumption coming from new accounts to occur in late 2011 and early 2012. This tipping point will be a function of favorable pricing, increased packaging of solutions and availability of off-the-shelf solutions, more benchmark and performance metrics, enhanced standards and improved business models.

Top 5 trends for RFID technology in 2011

Friday, January 21st, 2011

Everything points to 2011 as being a momentous year for RFID technology. In a recent web cast hosted by Terso Solutions, Tracy Hillstrom, Senior Product Line Manager with Impinj, talked about the top five RFID technology trends for 2011.

1 – RFID made easy: Hillstrom compares the early days of RFID to attending a concert and sitting near the light boards with a million knobs and switches, and an engineer constantly monitoring and tweaking the control panel to match the show on stage. “In the past RFID was very much like that,” says Hillstrom. “You had to be tweaking constantly. But what we are seeing for 2011 is more of an easy button approach, with readers that monitor the environment they are in and change how they read the tags to support the environment they are operating in at the moment.”

Hillstrom also says to expect more all-in-one solutions to enter the market, making deployments much simpler, and to look for a greater ability to store more data on the tag. Users will also benefit from dynamic antenna switching that monitor RF environments to determine if you in high interference or low interference areas and assure peak performance at all times.

2 – Item level tagging will drive volumes: The apparel sector continues to embrace item level RFID tagging, with more than 100 projects on record. “Modest penetration will consume billions of tags per year,” says Hillstrom. “You are seeing incredible ramp-up with more and more retailers embedding tags.”

3 – Sensitivity surpasses speed as a primary differentiator: In the early days of RFID, everything was about speed and how fast you could read tags. “Speed isn’t the issue now,” says Hillstrom. “It’s more about hard-to-read tags and how can I get to those hard-to-read tags. There will be more conversations around sensitivity and you’ll see advances in RFID in the area of sensitivity in 2011.”

4 – Privacy and security: To date, most systems have been closed loop, but we’re starting to see more open loop systems installed around the world, which will call for closer attention to privacy matters. “You’ll see a standard this year around privacy and security, and then vendors will bring those solutions to market quickly and in a reliable fashion,” she says.

5 — Embedded RFID becomes ubiquitous: Most people walking up to a Coke vending machine and other applications don’t even know RFID is inside it. And the ability to share data through the cloud or other avenues is becoming huge. “Connecting to the Internet is a huge step forward.,” says Hillstrom. “It’s all in a sense executing on the vision that gets us to a point where the Internet of things is sharing information. A lot of the RFID solutions to date have been closed loop solutions but if you look at what’s happening in 2011, it’s a major step forward not only getting to critical mass with more tags being deployed but the [progression] of these systems from closed loop and into connected systems is major step forward.”

Impinj grabs top spot in ABI Research’s 2010 UHF RFID Tag Chip Vendor Ranking

Wednesday, January 19th, 2011

Last year at this time, Impinj was preparing for its most dynamic product launch ever, its innovative Monza 4 product line. Less than a year later, the launch played major role in Impinj achieving the top ranking in ABI Research’s 2010 UHF RFID transponder IC vendor report. The report includes ABI’s independent ratings of Gen 2 RFID tag chip manufacturers for both “innovation” and “implementation.”

(Click here to read RFID 4-7’s coverage of the Monza 4 rolllout)

“Backed by the launch of its new Monza 4 product line, IC manufacturing capacity expansion, on-going tag chip cost reduction efforts, plus the majority share position of UHF RFID tag chips sold in 2010, Impinj secured the top spots in both “innovation” and “implementation”, ranking first overall among its three primary competitors,” said Mike Liard, Research Director at ABI.

Liard says that several factors contributed to Impinj’s high innovation ranking, including strong product development, significant technology leadership, effectiveness driving industry standards and active participation in RFID awareness and education efforts. Similarly, a broad set of metrics drove Impinj’s top implementation score, including the company’s leading market share, leading competitive position and strong customer support. Impinj’s Gen 2 tag chip volume far outpaces the field, establishing a majority share position. 

Impinj president and CEO Bill T. Colleran, Ph.D, says that strong volume growth will continue. “We saw huge growth in 2010 with unprecedented demand for Monza tag chips, and we expect continued worldwide market expansion in 2011,” he says. “Impinj will continue to bring innovative products to market, add capacity and work closely with our customers to maintain this leadership position.”

Retailers: Item level RFID could be ubiquitous by the end of 2012

Tuesday, January 18th, 2011

For those that missed last week’s lead story in RFID 24-7, we have posted it here. Special thanks to Motorola for sponsoring our special issue from NRF in New York City.

Item level RFID technology is well on the road to mass adoption by apparel retailers like Walmart and Jones Apparel, and could become ubiquitous by the end of next year. That was the message coming out of last week’s meeting of theItem Level RFID Initiative held during NRF in New York City. The event was attended by more than 100 retailers, suppliers, technology providers and members of academia.

The immediate goal of the group, which was formed in June and formally announced in November, is to further accelerate item level tagging by publishing industry guidelines and business case roadmaps for return on investment for retailers and suppliers.

“The technology is here and it’s pretty exciting what we will have the ability to do,” says Cynthia DiPietrantonio, chief operations officer for Jones Apparel, which operates 750 retail stores.

“No matter how good the utilization of the bar code is, it is woefully short of what you can accomplish with RFID technology,” says Peter Longo, president of logistics and operations for Macy’s.

The collaboration between Walmart, JC Penney, Kohls, Jones Apparel, Macy’s, Dillards, Levi Strauss and others in the Item Level RFID Initiative will likely lead to the biggest retail supply chain transformation since the bar code. The group will also study serialization issues, tagging compliance and how to handle the massive amounts of data that retailers will soon harness from RFID.

Longo and DiPietrantonio both shared new information about their chain’s RFID goals for 2011 and beyond. Beginning next month, Macy’s will roll out item level RFID across seven stores and will start tagging several product categories, including men’s jeans and women’s lingerie. The focus will be on product segments that are typically high margin items and that are difficult to keep in stock.

Macy’s is also turning heads by piloting RFID at two additional stores with the goal of relying on those brick locations as backup fulfillment centers for online orders that are unable to be filled at its e-distribution centers in Tennessee, Connecticut and Arizona. The increased visibility at the store level would allow Macy’s to rely on retail centers for fulfillment, something that isn’t possible today because of poor inventory visibility.

“Having gone through the EDI revolution, the reward of RFID will trump anything that we’ve done in the last 15 to 20 years,” says Longo. “It is that big, and RFID is truly a transformational technology and will take us to a place that is very different than where we are today. The debate is over. This is no longer a discretionary decision.”

Longo said that the RFID expansion will include “select categories of the business that tend to be the most opportunistic to take advantage of RFID, such as SKUs that are color and size intensive in very replenishment-oriented businesses.”

Macy’s RFID expansion will follow on the successful piloting of item level RFID at its Bloomingdales store in the Soho area of New York City, and will help the firm to “procedurally learn how to be good at using RFID technology.”

Jones Apparel, which operates 725 company-owned stores and manufacturers apparel goods sold by other retailers like Macy’s, implemented an RFID trial at two of its company-owned stores in New York City, and achieved some exciting results. For starters, the stores reduced the time for product searches by 18 percent.

“That was really the big win,” says DiPietrantonio. “For a retailer in New York City, your back room is downstairs in an ally. So when a customer asks for a size 8 red shoe, RFID gave the ability to the sales clerk to take the handheld and say we don’t have that product, but let me show you what we do have. That’s a great option opposed to running all the way down to the store room and back, only to say that we don’t have that style and risk having the customer walking away.”

In addition, receiving and transfer productivity improved by 25 percent, and the time required to conduct a full store cycle count was reduced by 92 percent. Average inventory accuracy improved from 85-90 percent to 97-99 percent. “It was a pretty exciting pilot,” says DiPietrantonio. “What we really saw was the excitement from sales associates and the store manager to have the ability to sell into products that we have in inventory.”

White paper identifies use cases for item level RFID in apparel supply chain

Wednesday, January 12th, 2011

The Information Technology Research Institute at the University of Arkansas has released a white paper designed to show the value of RFID to apparel suppliers. Unveiled at Tuesday’s meeting of the Item Level RFID Initiative at NRF, the white paper identifies more than 60 item level use cases for apparel suppliers.

The Phase I findings reveal that the potential benefits of item level RFID in the apparel supply chain reach beyond the retailer and include apparel manufacturers. For example, improved backroom-to-shelf replenishment and greater perpetual inventory (PI) accuracy, both possible from RFID, can offer manufacturers the opportunity to increase top-line sales, due to higher product availability at the retail shelf.

“The suppler side is a little more complicated,” says Cynthia DiPietrantonio, chief operations officer for Jones Apparel, which operates 750 retail stores and is also a manufactuer of apparel gods sold at retialers like Macy’s. “A review of your supply chain is very critical because there are a lot of different components that you need to take a hard look at. As a supplier, if you sell fashion products to several different retailers, you really need critical mass adoption in order for this to work because it’s very difficult to segregate you inventory.”

The white paper found that RFID offers manufacturers the opportunity to improve inbound and outbound operations at many levels. By implementing RFID, the supply chain can undertake scanning as each carton crosses the dock door at any location, which should substantially decrease the number of touches per carton. Because labor accounts for the largest portion of variable costs in an apparel distribution network, RFID is very promising in terms of labor cost reduction.

Click here to read the executive summary and download the report.

Retailers predict item level tagging could reach mass adoption by the end of 2012

Tuesday, January 11th, 2011

By the middle of next year, item level RFID will be well on the road to mass adoption by retailers. That was the message coming out of Tuesday morning’s meeting of the Item Level RFID Initiative, held at the NRF show in New York. The meeting was attended by more than 100 retailers, suppliers, technology providers and members of academia.

The immediate goal of the group, which was formed in June and formally announced in November, will be to publish industry guidelines and business case roadmaps for item level return on investment for both retailers and suppliers. The group will also study serialization issues, tagging compliance and how to handle the massive amounts of data that retailers and suppliers will soon harness from RFID.

“The technology is here and it’s pretty exciting what we will have the ability to do,” says Cynthia DiPietrantonio, chief operations officer for Jones Apparel, which operates retail stores and also manufacturers apparel goods sold through other retailers like Macys.

“No matter how good the utilization of the bar code is, it is woefully short of what you can accomplish with RFID technology,” says Peter Longo, president of logistics and operations for Macy’s, which announced it is rolling out item level RFID to four product segments and seven stores.

The joining of Walmart, JC Penney, Kohls, Jones Apparel, Macy’s, Dillard’s, Levi Strauss and others in the Item Level RFID Initiative will likely lead to the biggest retail supply chain transformation since the bar code was introduced.

RFID helps to curb drug counterfeiting

Monday, January 10th, 2011

Nice video from IBM …. http://www.youtube.com/watch?v=LVEPdV_warU

Any by the way, click here to check out RFID 24-7′s coverage of RFID is helping to fight counterfeit drugs in Africa.

Macy’s will deploy item-level RFID tagging at seven stores next month

Sunday, January 9th, 2011

Beginning next month, Macy’s will roll out item level RFID technology across seven stores and will start tagging several product categories, including men’s jeans and women’s lingerie. The focus will be on product segments that are typically high margin items that are difficult to keep in stock.

In addition, the retailer will pilot RFID at two additional stores with the hope of being able to rely on those brick locations as backup fulfillment centers for online orders that are unable to be filled at its online distribution centers in Tennessee, Connecticut and Arizona. The increased visibility at the store-level would allow Macy’s to rely on retail centers for fulfillment.

“Having gone through the EDI revolution, the reward of RFID will trump anything that we’ve done in the last 15 to 20 years,” says Peter Longo, president of logistics and operations for Macy’s. “It is that big, and RFID is truly a transformational technology and will take us to a place that is very different than where we are today.”

Longo, speaking at the NRF show in New York on Sunday, said that the RFID expansion will include “select categories of the business that tend to be the most opportunistic to take advantage of RFID, such as SKUs that are color and size intensive in very replenishment-oriented businesses.”

Longo said the expansion will follow on the successful piloting of RFID at its Bloomingdales store in the Soho area of New York City, and will help the firm to “procedurally learn how to be good at using RFID technology.”

Many retailers are choosing to tag  jeans early on because demin works well with RFID, and because many jeans suppliers are already tagging product. Another major initiative for Macy’s in 2011 will be to start mining the data it collects from RFID.

Research report: RFID will grow 17 percent annually in the North America market

Wednesday, January 5th, 2011

A new research report titled Global RFID Market Analysis till 2010” calls for the RFID market to grow at a CAGR of around 17 percent between 2011-2013, to a value of approximately US$ 9.7 Billion. The overall growth in RFID is expected to outpace other automatic identification technologies such as bar code. The reason behind this phenomenal growth is that the various applications in different verticals have emerged around this technology.

At the regional level, the report by RNCOS reveals that the Asia-Pacific region will witness the highest growth in terms of revenue. The region is anticipated to account for 27 percent of the entire RFID market by 2013. Other regions like Europe and North America are also focusing on improving their business processes through RFID technology. In Germany, for example, the RFID market is expected to grow at a CAGR of around 19 percent for the next three years.

According to the report, enterprises in European countries are using RFID for personal identification/access control, while in the Asia Pacific countries logistics and retail are the emerging sectors for the technology. Other verticals like transportation, consumer packaged goods will continue to use the technology in almost all the regions in near future. Application segments such as security-based solutions, pharmaceuticals and healthcare are in the emerging stage and are expected to drive growth in the market.