Automotive, Consumer Goods, Transportation Industries Leading RFID Push

Mandates driving "slap-and-ship" adoption, but many companies integrating technology into business processes, CompTIA study reveals

Mandates driving "slap-and-ship" adoption, but many companies integrating technology into business processes, CompTIA study reveals

Oakbrook Terrace, IL — September 12, 2005 — 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, new research commissioned by the Computing Technology Industry Association (CompTIA) reveals.

Just over one-half of more than 500 organizations surveyed in North America 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 percent of companies surveyed said they will deploy the technology over the next 12 months. The consumer goods industry and the transportation and logistics sectors were close behind, at 58 percent each.

Mandate Mania

CompTIA commissioned Frost & Sullivan, a firm specializing in strategic growth consulting, 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," said David Sommer, vice president for electronic commerce at CompTIA.

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

Some Choose Slap-and-ship

"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 percent of organizations in the consumer goods industry, 52 percent in the food and beverage sector and 51 percent in the textiles and apparel market are using the slap-and-ship method.

By comparison, 70 percent of banking and finance companies, 70 percent of information technology firms and 67 percent 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 percent of organizations will implement RFID organization-wide. Twenty percent of organizations will deploy the technology at a single site only, and 17 percent will use it only for select products.

Certification in Development

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.

CompTIA is currently working with some 20 organizations active in the RFID industry to develop a vendor-neutral professional certification that would validates a technician's knowledge and skills in the areas of installation, maintenance, repair and upkeep of hardware and software functionality of RFID products. CompTIA RFID+ certification is expected to be available later this year or early in 2006.

The executive summary for this report can be viewed at http://www.comptia.org/sections/research/research.aspx. CompTIA members may go to www.comptia.org to download the report in PDF. Non-members may get details on purchasing an electronic copy of the report by e-mailing either research@comptia.org or jpolitis@frost.com.


Additional Articles of Interest

— RFID technology has the potential to change the way supply chains are managed, but in order to be effective businesses need to take a holistic look at the deployment. Read more in the SDCExec.com article "Time for RFID: Applying RFID in the Supply Chain."

— For a contrary view of the future of the RFID market, see the article "The O'RFID Factor: A 'No Spin' Look at Where Radio Frequency Identification Is Headed," in the October/November 2004 issue of Supply & Demand Chain Executive.

— For more information on trends relating to radio frequency identification (RFID), follow this link for an extensive listing of SDCExec.com articles, featuring the latest research findings on the RFID, including adoption, return on investment and barriers to implementation.


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