Subject: [NEXTEL-1] Companies test RFID waters but remain in shallow end

From: [email-masked]
Date: Thu, 25 Sep 2003 22:36:18 -0400

http://www.computerworld.com/mobiletopics/mobile/technology/story/0,10801,85199,00.html?nas=EB-85199 Companies
test RFID waters but remain in shallow end Projects are on the way, but the
technology could take years to fully implement

Story by Jaikumar Vijayan

SEPTEMBER 22, 2003 ( COMPUTERWORLD ) - CHICAGO -- Executives from several large
companies last week outlined their plans to move ahead with RFID technology as a
replacement for bar codes. But there are formidable obstacles to the technology's
widespread adoption, they said.

At the inaugural Electronic Product Code (EPC) Executive Symposium held here last
week, users said it will take five to 10 years for radio frequency identification
(RFID) technology to be fully deployed at the individual item level.

Consumer products giant Johnson & Johnson is piloting the technology at some of
its warehouses, according to Pat Rizotto, vice president of global consumer
initiatives at the New Brunswick, N.J.-based company.

"We'd find huge savings if all we did was better understand what comes in through
the front doors, where it is in the distribution center and what was shipped out
the back door," Rizotto said during a panel discussion at the conference.

The next step is to determine whether retail partners would be interested in
working directly with Johnson & Johnson to implement RFID tagging, he said. The
company is also looking at using the tags to track some of the more expensive
products in its medical devices and diagnostics business, Rizotto said.

But he didn't give a timetable for implementing the technology, saying that a
formal business case has to be made for it first. "We have a good warehouse
management system. EPC will enhance what we have," Rizotto said.

Tesco PLC, a Cheshunt, England-based grocery store chain, is testing RFID in its
supply chain and at the item level by placing RFID tags on DVDs. The "instant
visibility" the technology provides is helping Tesco better understand customer
needs, improve customer service and decrease thefts, said John Clarke, Tesco's
director of group technology and architecture.

Challenges Ahead

But there are several major challenges that need to be addressed before it will be
possible for companies to take full advantage of RFID's potential, said Gerd
Wolfram, project manager at the Extra Future Store, a supermarket in Rheinberg,
Germany, owned by the $54 billion Metro AG group.

Metro is using the store as a laboratory of sorts to test RFID and other new
technologies. RFID tags are being used at the pallet, case and item level to keep
track of inventory, replenish shelves, track product expiration, enable real-time
stock-taking and better utilize storage space.

But there have been problems with the quality of RFID labels, readers and the
software for capturing RFID data, Wolfram said. The technologies have required
quite a bit of customization to work in Metro's environment. The lack of standards
for implementing RFID has also been problematic, he said.

The costs associated with RFID tags have been falling, but they're still too high
compared with the cost of bar codes, users said. And the scalability of the
technologies is also relatively untested, they added.