Automotive industry is furthest along in adopting RFID

Aug. 22, 2005
The automotive, consumer goods, and transportation and logistics industries will lead the way in implementing radio frequency identification (RFID) technology

The automotive, consumer goods, and transportation and logistics industries will lead the way in implementing radio frequency identification (RFID) technology solutions over the next year, predicts the Computing Technology Industry Association (CompTIA).

Just over one-half of more than 500 North American organizations surveyed by CompTIA have either completed RFID implementations or plan to do so within the next 12 months. This includes companies that are evaluating, pilot testing, implementing, or currently using RFID.

Among specific industry sectors, the most aggressive adoption of RFID is planned in the automotive industry, where 59% of companies surveyed say they will deploy the technology over the next 12 months. The consumer goods industry and the transportation and logistics sectors are close behind, at 58% each.

CompTIA commissioned Frost & Sullivan to evaluate the growth potential of the North American RFID market. Specific topics covered in the research include growth opportunities for vendors; end-user perspectives on RFID implementation and workforce related issues; and the need for training and certification activities associated with growth in technology adoption.

"Much of the RFID adoption in North America is being driven by mandates and directives from key organizations, including the U.S. Department of Defense, the Food and Drug Administration and Wal-Mart," says David Sommer, vice president, electronic commerce, CompTIA.

The research found that 46% of consumer goods makers; 34% of food and beverage makers; and 24% of textile and apparel manufacturers are implementing RFID solutions because of a mandate from Wal-Mart.

"Slap-and-ship" RFID implementations -- where RFID tags are slapped on cartons, cases and pallets without linking the data available back into an IT system -- are more likely to be adopted by companies subject to tight compliance mandates, the research found. For example, 56% of organizations in the consumer goods industry, 52% in the food and beverage sector and 51% in the textiles and apparel market are using the slap-and-ship method.

By comparison, 70% of banking and finance companies, 70% of information technology firms, and 67% of transportation and logistics companies are integrating RFID with their current business processes.

Forty-one percent of organizations surveyed intend to deploy RFID solutions across multiple sites, with the transportation and health care sectors the most likely to choose this route. Another 31% of organizations will implement RFID organization-wide. Twenty percent of organizations will deploy the technology at a single site only, and 17% will use it only for select products.

The findings are based on the results of a web-based survey of 510 North American companies, including current RFID users, prospective users and organization that have considered and rejected systems and applications featuring RFID technology. In addition, interviews were conducted with vendors for sales and support of hardware and software for applications utilizing RFID, IT systems integrators, resellers, and other channel organizations.

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