ChainLink study reveals interesting facts on RFID acceptance

• December 26th, 2006 | Business

A new study released by ChainLink Research has thrown up an interesting fact regarding RFID adoption. Most companies will add RFID to their setups in order to benefit from the technology and not necessarily to meet customer mandates.

This is a bit of a surprise because customers in this case include giants like the U.S DoD and Wal-Mart. All RFID-related activity is not necessarily related to customer mandates or the EPC technology. The study found that many companies were interested in working with active RFID tags and the passive 13.56 MHz tags.

The vale of this effort by ChainLink lies in the fact that it gathered details from the entire cross section of industry and covered an impressive 275 manufacturers. More than 180 companies were already using RFID and of these 41% were doing so for process improvements. Another interesting fact thrown up by the research is that smaller companies are treading the unknown RFID waters bravely and doing so more for the sake of improving processes than meeting mandates. Of the companies with less than $25m in annual revenue, an unbelievable 63% are implementing RFID to benefit from the technology.

The study also highlights the companies’ desires to keep the system functioning to themselves. Most of the RFID systems being implemented were closed-loop. At the manufacturer’s end, RFID finds maximum application at outbound shipping; distribution and logistics; manufacturing/plant floor; receiving and inbound materials; and asset/capital equipment tracking.

The report mentions that companies turning to RFID for process improvements are much more likely to return a positive ROI than those that do it for compliance. The main causes that hinder RFID adoption include high technology cost, lack of clarity on the potential uses of RFID, misconceptions regarding the maturity of the technology and insufficient in-house expertise to design and manage RFID.

Topping this out, the ChainLink report projected the amount of money spent on RFID in 2007 to be twice that spent in 2005.