Archive for April, 2011

Omnitrol solution delivers food traceability for Firstlight Foods

Friday, April 29th, 2011

New Zealand-based Firstlight Foods knows that its customers want to know where and how their beef was produced, and how fresh it is when it arrives at the marketplace.

Through a partnership with Omnitrol and RFID systems integrator Trident RFID, Firstlight now has those checks and balances in place. Firstlight, which processes and sells high quality beef products to retailers like Whole Foods in the U.S., will rely on an Omnitrol solution that enables real-time manufacturing visibility and item-level tracking in food, meat and beverage traceability across global supply chains.

The solution will enable Firstlight Foods to automatically track venison and beef production and to accurately generate electronic meat pedigree records enabling field-to-fork traceability.

“We have successfully worked with Omnitrol in the past in delivering food traceability, so when Firstlight Foods called on us for meat traceability, we knew Omnitrol would have an answer,” says D’Arcy Quinn, Chairman of Trident RFID. “The Omnitrol platform is the industry’s most versatile solution and the easiest to deploy and scale with RFID readers at the Firstlight site. With reliable real-time tracking data, Firstlight will be able to improve their processes, reduce product damage, and automatically generate electronic records for pedigree compliancy in their meat production plants.”

 

Impinj IPO will ignite investment in RFID sector

Wednesday, April 27th, 2011

In late 2005, I predicted in another publication that a young upstart company called Impinj would some day file for an IPO. Six years later that time has arrived. In case you missed this week’s coverage of the Impinj IPO announcement, we have included it on our blog page.

Four years ago, Alien Technology created a buzz in the industry by filing for an IPO. Buzz quickly turned to bust because of poor market timing, a balance sheet that didn’t please investors, and orders that never materialized.

How is last week’s announcement by Impinj to pursue an IPO possibly worth $100 million any different? Like Alien, Impinj has never turned a profit. Impinj lost $11.4 million in 2010, and $1.8 million in Q1 2011.

Well, the losses are the only similarity, and they carry an asterisk, since tag sales are exploding, something that was not true four years ago. Today’s market features real orders and strong momentum. Impinj grew sales from $20.8 million in 2009 to $31.8 million last year. First quarter revenue for 2011 came in at $12.2 million, compared with $5.1 million for the same period last year.

“There is a different story here,” notes Drew Nathanson, Auto-ID practice director at VDC Research. “When Alien announced its IPO, the market wasn’t there yet. This is real money coming in.”

“And even though Impinj is not profitable, it is clear they will be eventually because they own so much share in a lot of these core markets that are growing at huge rates.”

Impinj will not comment on the IPO because of SEC regulations, but the company will not be profitable in the near-term. However, explosive growth is occurring in the apparel item-level sector, an industry Impinj is a big player in. And Impinj execs see item level tagging spreading quickly into non-apparel sectors like electronics, cosmetics, tires and jewelry. In fact, it is highly believed that Walmart is ready to extend its item level-tagging program to electronics and tires and possibly other non-apparel product lines before year-end.

Impinj has sold over two billion of its Monza tag ICs since the product line was introduced in 2005, including 940 million tags in 2010 alone. VDC projects the number of UHF Gen2 ICs shipped will grow from 1.6 billion in 2010 to 41 billion in 2015, a compound annual growth rate of 92.2 percent. Investors drool over such growth numbers, and such explosive growth should also push Impinj to a profit.

Impinj focuses exclusively on UHF RFID solutions, which is the fastest growing segment of the RFID market. UHF Gen2 systems are ideally suited for high-volume, item-level applications that require low-cost, consumable tags, such as retail inventory management, pharmaceutical authentication and airline baggage tracking. From 2009 to 2010, unit sales of the Monza UHF Gen2 tag ICs increased by 279 percent. Impinj is the market leader in UHF Gen2 tag ICs, reader ICs and stationary readers. According to VDC, Impinj owns 60 percent of the tag IC market, 86 percent of the reader IC market and a 25 percent share of the stationary reader market.

Impinj estimates that its technology enables more than 70 percent of the UHF Gen2 reader market when you combine the share of its Speedway reader with that of other readers based on its Indy reader ICs.

“Their innovation rate is aligned and they seem to have a very good understanding of how their markets are evolving and the constantly changing end user requirements,” says Nathanson.

Impinj will use the proceeds of the IPO to pay down debt, including venture firms that have financed the company to the tune of at least $160 million since it was founded in 2000. Published reports say that venture capital firms own about half of the company. Intel holds a stake worth about 6 percent.

A successful IPO would drive further investment in the industry, resulting in the potential for more IPOs and increased M&A activity. A year ago, RFID 24-7 reported that ODIN could be 12-18 months away from filing an IPO. Privately held ODIN has never commented on its sales, although industry estimates place revenue at $25-30 million annually. That puts ODIN at about the same size sales-wise as Impinj. ODIN CEO Patrick Sweeney said this month that first quarter sales increased by 30 percent in 2011, indicating continued solid growth.

Is ODIN on track for an IPO too? All you have to do is read into Sweeney’s blog post regarding the Impinj IPO: “The big winner will be the second company to IPO, because everyone who is sitting on the sidelines during Impinj’s road show is about to see a very successful tech company emerge and will wish they got in on Impinj; and they will climb all over themselves to get in on the second IPO in the RFID sector. If Impinj is successful, and I believe they will be, and I owned an RFID company I would be doing everything I could to be the second company out in the IPO market.”

ODIN, which acquired Reva Systems late last year, is also a potential takeover target, as are companies like GlobeRanger, Tego, Omni-ID, and Intelleflex, especially if momentum behind cold chain tracking continues.

The Impinj IPO places a spotlight on a pure-play RFID star. A successful IPO means investors will take note that the technology is finally mature and that they can invest in the industry and reap gains in the short term, instead of waiting years for payback.

“The call volume coming in from the investment community, especially the larger investment firms, indicates that they are really looking at this market in a big way,” says one industry expert. “They are looking to dump more money in, so expect a lot of acquisitions happening going forward.”

 

RFID: a green enabler when it comes to sustainability

Friday, April 22nd, 2011

I’ve been working on a top 10 list of how RFID not only benefits business, but the environment as well. Clearly, RFID qualifies as a green enabler when it comes to sustainability.

One area I’ll examine in this special report is transportation. RFID enables cars to zoom through tolls and pull into parking garages quicker, cutting down congestion and carbon emissions. I witnessed that this week on the drive to the Mt. Washington area to do some late season skiing. The toll on Rt. 95 in New Hampshire has always been a major bottleneck, sometimes tying up traffic for several miles. Now, with open-lane, high-speed tolling in place, autos cruise through at high speeds.

Click here to read RFID 24-7′s previous coverage on RFID and sustainability.

RFID is also making yard management more efficient at large distribution centers and warehouses. Even Walmart is on the bandwagon for using RFID as a green enabler. At a conference several years ago, Walmart executives noted that by having more products in stock by using item level RFID, customers don’t have to travel to another store for the product they are looking for, saving gas and lowering their carbon footprint.

Stay tuned for our report: RFID and the Environment.

Impinj files to raise up to $100M in IPO

Thursday, April 21st, 2011

Investors in Impinj may finally have a way to cash out of the company. Impinj announced on Thursday that it is filing for an initial public offering that could raise as much as $100 million. Impinj could be trading by year end, and would be the first North American-based RFID pure play to test public markets.

Impinj was founded in 2000, and has raised more than $150 million from venture capital firms. Much of the IPO proceeds will go to pay off investors, while the company will also invest in product development and expanding the business.

Stay tuned to RFID 24-7 next week for much more on this developing story. For now, check out the Seattle Times article.

Serge Blanco realizes huge productivity gains from RFID deployment

Thursday, April 21st, 2011

Retailers continue to embrace item level RFID tagging, and that includes Serge Blanco, which operates 400 retail outlets in France and approximately 20 stores in 15 other countries including Ireland, Dubai, Russia and Italy.

Designed in France and produced offshore, Serge Blanco moves more than one million items of apparel through the supply chain each year to its own retail stores and select department stores. The company turned to RFID in 2009 to curtail frequent bottlenecks, a “lack of process speed and lack of reliability, and stock rotations that were too long and time per article too high,” says Mathieu Pradier, the company’s vice president of operations

GS1 recently shared a case study with RFID 24-7 that was produced for Apparel Magazine. Here is an excerpt from the case study:

Before the solution was deployed, it took a team of 10 to receive 25,000 items on a busy day. Now, just two workers can receive 35,000 items.

“Our objective was to really optimize the distribution channel, and this has been achieved,” says Pradier. “We have reduced entry and exit times for goods by almost tenfold, which means that we are now ready for business growth of 40 percent to 50 percent. … RFID is not a passing fashion. It’s a real solution.”

Hotels adopt RFID solutions to deter theft of linens and other guest room items

Monday, April 18th, 2011

RFID is helping hotel owners to limit shrinkage when it comes to linens like towels, robes and bed sheets. According to reports in Time and the New York Times, hotels are embedding washable RFID tags into towels that trigger an alarm when guests leave the hotel with a atgged item.

According to reports, three hotels in Hawaii utilizing the technology have dramatically reduced shrinkage. High cotton prices are driving the adoption of RFID-based solutions for this market.

Optimism high at RFID Live; new solutions and innovation drive the industry forward

Thursday, April 14th, 2011

The annual RFID Live show is set to conclude in Orlando today, with an onslaught of new product announcements, the unveiling of new applications and solutions, and unforeseen optimism for the industry moving forward.

Activity in retail, aerospace and medical/healthcare is expected to skyrocket as new applications unfold in those sectors. Execs from Macy’s, Walmart, JC Penney and Dillard’s participated in a panel discussion to provide an update on the Item Level RFID Initiative, a joint effort to accelerate item level retail tagging. Some industry execs marveled that the four panelists joined together on the same stage to discuss RFID best practices when collaboration among competing retailers was unheard of just two or three years ago.

“We are rapidly moving to a world where everything in the Internet is connected, and the key element to that is RFID,” Gene Delaney, executive VP at Motorola, said in a keynote address. “Companies that convert data and filter information and get it into the hands of the right person at the right time will be able to make real-time decisions that can change the competitive landscape.”

Avery Dennison’s Jack Farrell kicked off the event’s opening day by elaborating on the company’s shipment of its one billionth tag last week, and pointing out that RFID is in the early stages of a very strong growth cycle. “We are seeing exceptional growth,” he says. “It’s across the board and it speaks well of the continued momentum behind RFID when you have large companies rolling out the technology because very simply — they know it will make them money.”

Farrell, vice president and general manager at Avery Dennison, said Avery is seeing the biggest growth in the retail apparel item level tagging, but “in three or four years it’ll be something else, whether a pharmaceutical application or authentication of consumer products.”

The show revealed a host of innovation occurring in the industry, from recent new chip announcements from Impinj and Alien Technology, to the tiny on-metal tags being developed by Xerafy for use on medical tools and other high value assets. While Alien says retail represents its biggest business sector, the company has signed five deals for bag tags at airports in Europe in the last 12 months, and has also seen increased activity in vehicle tracking in Mexico, Turkey, Thailand and parts of China.

German retailer Gerry Weber announced that it recently concluded spending an investment of about $2.7 million Euros to roll out RFID, and expects payback in two years. The investment does not include tags costs, which totaled approximately $2.8 million (U.S.) to tag about 28 million items.

One of the biggest examples of a game-changing application was ODIN’s announcement that it is partnering with the Mayo Clinic to commercialize a solution designed to automate tracking and data entry in pathology labs.

The solution could revolutionize the way that specimens are tracked as they move from one step to another at medical facilities. ODIN estimates that the average industry error rate of 10 percent could drop dramatically once the solution is introduced.

“The people at the Mayo Clinic are stunned that this is still a paper-based system,” says ODIN CEO Patrick Sweeney. “Each time a product comes into the lab, it gets re-labeled. One specimen might get re-labeled five or six times, and so it could be mislabeled during the process.”

“Pathology labs almost universally receive paper requisition forms with accompanying specimens for accessioning into the laboratory information systems,” says Schuyler Sanderson, a Mayo Clinic pathologist who has been championing RFID for AP specimen management at Mayo. “These paper requisition forms are typically filled in by hand from nursing staff and clinical providers. This practice represents a major source of specimen labeling errors, all of which have the potential for … adverse outcomes for patients.”

Mayo has been researching the RFID solution for four years, and hired ODIN last year to commercialize the solution. Mayo has already begun to roll out the solution at 42 labs in North America. Sweeney says that the average size lab could expect to pay about $500,000 for a solution, but could save $1-2 million per year, half from soft savings like labor costs and the other on material savings. ROI is expected in 12 months or less.

Sweeney expects the automated solution to become the norm for the medical industry. “You’ve got chain of custody, pedigree and accuracy through the whole system,” he says. “Mayo is committed to commercializing its IP around RFID and automating what they see as rudimentary processes. The ROI is significant but more importantly it just takes eliminating one error (and saving a life) to make this worthwhile. Now that the technology is out there that can prevent errors, medical facilities are at a liability risk not to use it. So we see it as a huge market opportunity.”

The solution clearly represents an example of how RFID can help to improve patient treatment and potentially save lives.

There are fun things we do at ODIN, like the social media applications with Vail Resorts,” says Sweeney. “Then there are things that are changing the world and this is an application that is changing the world.”

Sweeney also provided an update on his firm’s revenues, noting that sales increased 30 percent in the first quarter of 2011 over the same period last year. He expects healthcare to represent 50 percent of ODIN’s revenues in 2011.

Look for more coverage of this week’s show in next week’s issue of RFID 24-7.

RFID Live Day 2: ODIN medical solution grabs the industry spotlight

Wednesday, April 13th, 2011

The most exciting news coming out of the second day of RFID Live was the announcement by ODIN that it is partnering with the Mayo Clinic to commercialize a solution designed to automate tracking and data entry in pathology labs.

The solution could revolutionize the way that specimens are tracked as they move from one step to another. ODIN estimates that the average industry error rate of 10 percent could drop dramatically.

“The people at the Mayo Clinic are stunned that this is still a paper-based system,” says ODIN CEO Patrick Sweeney. “Each time a product comes into the lab, it gets re-labeled. One specimen might get re-labeled five or six times, and it could be get mis-labeled during the process.”

ODIN CEO Patrick Sweeney

“Pathology labs almost universally receive paper requisition forms with accompanying specimens for accessioning into the laboratory information systems,” says Schuyler Sanderson, a Mayo Clinic pathologist who has been championing RFID for AP specimen management at Mayo. “These paper requisition forms are typically filled in by hand from nursing staff and clinical providers. This practice represents a major source of specimen labeling errors, all of which have the potential for … adverse outcomes for patients.”

Mayo has been researching the solution for four years, and hired ODIN last year to commercialize the solution. Mayo has already begun to roll out the solution at 42 labs in North America. ODIN CEO Patrick Sweeney says that the average size lab could expect to pay about $500,000 for a solution, but could save $1-2 million per year, half from soft savings like labor costs and the other on material savings. ROI is expected in 12 months or less.

There are fun things we do at ODIN, like the social media applications with Vail Resorts,” says Sweeney. “Then there are things that are changing the world and this is an application that is changing the world.”

Sweeney also provided an update on his firm’s revenues, noting that sales increased 30 percent in the first quarter of 2011 over the same period last year. He expects healthcare to represent 50 percent of ODIN’s revenues in 2011.

Summary of RFID Live Day 1

Tuesday, April 12th, 2011

Avery Dennison’s Jack Farrell kicked off the opening day at RFID Live by elaborating on the company’s shipment of its one billionth tag last week and pointing out that RFID “is in the early stages of a very strong growth cycle.”

Farrell, vice president and general manager at Avery Dennison, said Avery is seeing the biggest growth in the retail apparel item level tagging, but “in three or four years it’ll be something else, whether a pharmaceutical application or authentication of consumer goods.”

“The industry has come a long way in the last seven years when it was focused around pharmaceutical, pallets, aviation and supply chain,” he said. “Clearly that early investment has been fundamental in allowing us to get to this point where we are seeing exceptional growth. It’s across the board and it speaks well of the continued momentum behind RFID when you have large companies rolling out the technology because very simply — they know it will make them money.”

In addition to retail, Avery Dennison is seeing active pilots in the coffee industry, as well as golf and wine sectors.

Farrell believes that the continued popularity of smart phones, coupled with item level retail tagging, will lead to a revolution in consumer retail habits. Noting that research shows that smart phones will outnumber PCs and laptops sold by 2012, Farrell said that increased mobile connectivity will enable an entirely different consumer experience.

“Retail item level tagging has led to significant growth, but the paradigm is changing for consumers,” he said. “People are looking for an entirely different retail experience and RFID can play a significant role.”

Farrell said that by 2013 to 2014, RFID will play a significant role in consumer product authentication, ensuring that consumers are getting what they pay for, while offering manufacturers new brand protection when it comes to counterfeiting. “This is the next big opportunity,” he said.

For example, RFID will ensure that accessories like printer cartridges are authentic, and that parts for expensive items like coffee makers are genuine.

Avery Dennison hits 1 billion mark for inlays

Wednesday, April 6th, 2011

Avery Dennison RFID has shipped its one billionth ultrahigh-frequency (UHF) RFID inlay — an industry first – and company officials say they will hit the 2 billion mark much faster than the seven years it took to get to one billion.

“We are confident that our second billion chips will be shipped in much less than half the time it took to ship our first billion,” Jack Farrell, vice president and general manager of Avery Dennison RFID said in a release. “As use cases expand and companies invest in IT process improvements, RFID solutions become almost a mandate for the future. This is a very exciting time for the RFID industry.”

Avery Dennison RFID inlays are attached to or embedded in labels and tags produced by multiple label converting partners and distributed in more than 60 countries worldwide. By providing a unique identifier for individually tagged items that can be read without the line of sight required by traditional barcode systems, RFID-based systems can collect and organize data exponentially faster and more accurately.

Over the past year, Avery Dennison RFID inlays have become more widely used by major apparel brands and retailers in item level marking systems. Retail item level tagging is expected to drive much of the growth in RFID during the next 12 months.

Avery Dennison sees UHF applications expanding beyond supply chain and into healthcare, authentication and transport logistics, as well as retail apparel. In addition to pioneering the use of UHF inlay applications, the company has moved into the established HF RFID space to facilitate the growth opportunities presented by that technology.

“We are excited about the overall future growth of RFID in both UHF and HF,” said Maggie Bidlingmaier, Avery Dennison RFID global director, sales and marketing. “The recent momentum in near-field communications technology, enabled by RFID-equipped smart phones, is particularly exciting, as it opens up the opportunity for many new applications for consumers as well as businesses.”