For the second time in as many months, major corporations are meeting to discuss their progress and to compare notes in their efforts to comply with Wal-Mart's mandate to move beyond barcodes and add RFID tags on boxes and pallets by early 2005. Praised by corporations for its potential to improve distribution and damned by privacy advocates for invasion of personal rights, RFID uses radio-activated computer chips to track products in the supply chain.
For major corporations and retailers around the world, the growing commercial reality of RFID is impossible to ignore. A recent meeting of EPCglobal (the RFID trade association) in Baltimore drew almost 2,000 corporate attendees, about a quarter of which were vendors, and whose enthusiasm attested to the promise they see in commercial application of RFID technology.
"At the Wal-Mart meeting six months ago, these guys all looked like deer in the headlights," said one vendor observing the crowd at the Baltimore Convention Center. "But now, every company has an RFID pilot up and running or solid plans for one." In fact, companies with successful pilots, like Kimberly-Clark, Hewlett Packard, Dell and P&G, shared their progress at the RFID Link 2004 meeting at the Fairmont Hotel in Dallas earlier this month.
Privately, some attendees in Baltimore expressed concerns (as an executive from a leading food company put it) that "RFID is just a Wal-Mart tax." Even supporters admit that calculating financial benefits is still hard to do. But as a growing chorus of users notes: "It's not the tags, it's the data." The ultimate value will come when analysis of the information generated by RFID technology, as products move through the supply chain, sets off a chain reaction of new processes, providing greater efficiencies and reducing costs.
While the book publishing industry has taken a studious but wait-and-see position on RFID, Pearson Education is actively experimenting with inserting RFID tags in the spine of textbooks, both hardcover and paperback.
"We are monitoring the development of RFID and evaluating its cost benefit for our businesses," said John LaVacca, executive v-p and COO of Pearson's Higher Education, International and Professional Group. "It's an interesting technology that could offer future potential." The spine was chosen as a place where the tag could not easily be tampered with or removed. Reportedly, the experiment with hardcovers was successful, but the glue and heat required for binding a paperback damaged the type of tag Pearson was using.