Shift in RFID Perception Noted

Competitive advantage closing in on compliance as motivation for engaging technology, according to Infosys survey

Fremont, CA — July 21, 2005 — Companies are increasingly moving beyond retailer compliance mandates and considering radio frequency identification (RFID) initiatives for competitive advantage, said an Infosys survey of executives from high-tech manufacturing, consumer product goods, logistics and pharmaceutical industries.

While RFID adoption continues to be driven primarily by retail mandate compliance (45 percent), competitive advantage came in a close second (38 percent). More than half of the respondents believed that their RFID initiatives have significant impact on cost reduction and asset efficiency improvements in their supply chain.

"While compliance-driven implementation is natural, the survey shows that companies believe the future holds potential for those choosing to invest in RFID as a strategic differentiator," said Sateesh Seetharamiah, RFID solution leader, Infosys Technologies Ltd. "Although there seem to be disparate levels of adoption and expectations from RFID programs, there is a consensus that RFID can strengthen supply chain efficiencies in the long-run."

While there is interest in adopting RFID, most respondents believe that there are significant technology challenges to be overcome (42 percent), such as the still-evolving RFID standards and the remaining technical implementation challenges. The cost of implementation came up as the second biggest hurdle in RFID adoption.

Eighty-two percent of respondents agreed that rapid deployment is important for the success of RFID programs, while 72 percent emphasized the need for vendors with global delivery capabilities.

The survey, conducted in June 2005, polled executives from supply chain, operations, logistics and IT functions at the RFID Day Logicon 2005, which was a logistics and supply chain conference held in Pasadena, Calif., from June 13-15, 2005. Participants were mainly from high tech manufacturing, pharmaceutical, logistics and retail industries.