Reality Analysis: RFID gradually unlocks its potential

However, experience tells us that complex systems involving multiple parties cannot be implemented overnight, and even within a few years. In order to best understand the development process of RFID, a more practical approach is to study some typical applications that have reached maturity and some applications that are already in the process but are not yet mature.

Library system

Over the past few years, more than 2,000 libraries around the world have installed RFID to track library collections of books, CD-ROMs, DVDs, and other media. More than 70 percent of libraries use NXP's ICODE technology. The readers of the library found it easier to borrow books and find the books they needed. This is because RFID makes library inventory management easier.

In super-large applications, these advantages are particularly prominent. Singapore, Germany and the Netherlands have all chosen RFID to efficiently manage new libraries or libraries that have deployed new IT architectures. For example, in Singapore, more than 15 million NXP ICODE products are used in all media materials.

Retail store

Retail stores, especially chain stores, are very different from libraries in the maturity of using RFID. However, Wal-Mart, the world's largest retailer, has asked its stores and some of the largest suppliers to implement RFID programs to use labels on pallets and boxes – but not yet specific to item-level labels.

In the implementation of RFID, suppliers may think that they only comply and have no other choice. However, as a result, they may have to absorb the additional equipment costs associated with RFID. One of the major hurdles is that in order to maximize the benefits of RFID, users cannot simply replace the bar code and read the hardware of the bar code. They also need to use the inventory management process in order to realize the technical advantages of RFID.

The advantages of RFID in bar code include:
· Needn't be in line of sight when scanning · Labels can be scanned in any direction · Not affected by dusty and uneven surfaces · Multiple labels can be scanned at the same time (multilabel operation)
·Label with user-programmable memory ·Maximum level of scan automation ·Accurate inventory through automatic control ·Information directly associated with the product ·Unique ID to prove product authenticity ·Safety performance (can implement EAS function)
·Read and write function

Metro Germany requires its top suppliers to begin labeling pallets and has begun the process of applying RFID technology throughout the supply chain. METRO currently uses the NXP UCODE G2X-based tag in its cargo sending and receiving applications between its distribution centers and stores, while trying out the tag in its future stores. After adopting NXP UCODE technology, the out-of-stock phenomenon was reduced by 9-14% and the storage labor cost was reduced by 11%.

Metro and Wal-Mart are both world-class retailers with huge inventory. For them, pallet-level tagging is an excellent entry point for implementing RFID technology. However, some smaller retailers have found strong advantages in moving to the next step and adopting RFID item-level labels. For example, Marks and Spencers, Kaufhof, and Otto Versand.

These retailers have common characteristics, such as storing high-value products and sometimes actively limiting the quantity. In other words, they are retailers of fashion products. The fashion product retailer also has some of the same features as the library: no more mixed SKUs and a smaller product range, trained personnel, and very close to a closed loop system.

At the other end of the supply chain, retail stores, RFID not only provides fast and accurate inventory management, but also provides self-service cash registers and the use of RFID for theft protection opportunities.

in conclusion

Although most of the basic building blocks required for the growth of the blow-out RFID market are in place, some decision makers in the supply chain still do not see much benefit in investing in RFID equipment. The industry must take appropriate measures to ensure that the benefits of RFID are widely shared, even including consumers.