The Business Case for Active RFID

Active technology being rapidly adopted and creating new markets, IDTechEx reports; upcoming summit to explore practical applications.

Active technology being rapidly adopted and creating new markets, IDTechEx reports; upcoming summit to explore practical applications

Cambridge, UK — October 27, 2006 — With its ability to track, locate and sense goods throughout the supply chain, active radio frequency identification (RFID) technology is being rapidly adopted around the world, often creating new markets. Many adopters have reported rapid returns on investment (ROI) of 12-18 months, which will help drive the market for active RFID to $6.78 billion in 2016, according to industry analyst firm IDTechEx. Here IDTechEx's Dan Lawrence summarizes recent active RFID developments in the run-up to the firm's coming Active RFID Summit event.

The use of active RFID is growing rapidly, providing the ability to track, locate and sense. Active RFID covers real-time locating systems (RTLS) to track assets and people in real time; near-field communication (NFC) enabling mobile phones to act as both tags and readers, enabling new consumer services and propositions such as faster payments; and low-cost wireless sensor labels monitoring the condition of products as well as tracking and tracing them.

Users of conventional active RFID systems typically report a return on investment period of 12 to 18 months — despite the high tag cost — because since the tag is reused, often on high-value assets, the cost per use can be very low. Active RFID has recently been moving to the forefront as open standards enable widespread confidence to adopt the technology and as the technologies improve and reduce in cost.

IDTechEx research has forecast that sales of active systems, including the tags, will now grow very rapidly from $0.55 billion in 2006 to $6.78 billion 2016. Often adoption of these systems replaces nothing — new markets are created.

Active RFID in Action

In an analysis of 75 active RFID case studies from 18 countries by IDTechEx, the largest number of projects was in logistics, which had around twice the number of each of the nearest contenders — air industry, automotive/transportation and healthcare.

In the case studies, the main items that were tagged were containers, followed by vehicles, conveyances and people, and this probably reflects the market as a whole. Car remote-locking devices are products in their own right, of course, and do not tag anything. Tagging people is a significant and growing sector.

Building on the success of last year's Active RFID Summit, the second annual Summit in Atlanta, November 14-15, will bring together both end users and technology providers to detail the progress of the technology in solving real world challenges.

BP, GE and Boeing

For instance, delegates will be hearing from a joint project between industry heavyweights IBM and BP, which have implemented a system to increase worker safety and plant efficiency. Because of the large area covered by a typical BP facility, and the fact that personnel are often surrounded by flammable, dangerous materials, an active RFID system developed by IBM has been implemented. Among the many benefits of this system, personal safety is among the most important. During emergency or safety drill situations, active tags and readers provide much more timely awareness of evacuation progress and helps emergency personnel coordinate resources more effectively.

Similarly, as a manufacturer of a diverse line of products we rely on everyday, GE has a lab dedicated to evaluating the various active technologies in use. Delegates will hear from GE regarding how they are using active technologies to track their assets and the methodology used to find the best fit for their products. In addition, there is a good chance that the delegates will travel to Atlanta in one of Boeing's products. Boeing is leveraging active RFID to track some of the key components and systems in some of the most complex machines every designed.

Elsewhere, NYK Logistics' Rick Crawford will be detailing how his company is assisting retail giant Target Corporation to reduce inventory costs, enhance customer service and grow their business. In fact, he is expected to offer delegates insights into how they may be able to realize a six to nine month ROI by utilizing best practices. This payback will certainly appeal to CFOs and may help justify many further implementations.

Technology Options

On the technology side, we will hear from Wavetrend, which is providing asset tracking solutions for many industries. In addition to location, they are enabling active tags with sensors monitoring temperature or vibration and communicating this through a secure transmission protocol.

Using a technology known as ultrawideband (UWB) Ubisense is developing products that allow visibility of people and assets with resolutions of about six inches in real time. This level of accuracy has many applications, particularly where assets are tightly packed and finding something quickly is of the essence.

Delegates will also hear from the State of Georgia, which is utilizing active RFID to enhance both security and efficiency at ports and terminals. Their Maritime Logistics Innovation Center is leading the way in adopting technology that allows them to prioritize and track shipments in the international supply chain. By adopting international standards, Georgia's ports will be able to validate shipments from a growing number of ports throughout the world.

For more information on the Active RFID Summit, go to

Additional Articles of Interest

— "The strength of a chain lies in its weakest link" For insights into strengthening the weak points in your supply chain, read "Supply Chain All the Way: Strengthening the Weakest Link," an In Depth exclusive feature on

— Can ERP do everything that a best-of-breed solution can do? If you've already purchased a module as a part of an ERP bundle, what's the cost to implement an ERP collections solution? For information on these and other ERP-related questions, read "Revenue and Receivables Management: Myths and Truths about ERP," only on