RFID Adoption and Implications - empirica

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RFID Adoption and Implications - empirica

RFID adoption and implications

Executive summary

Key findings

RFID may become mainstream in Europe

over the next 5 to 10 years. A significant

adoption uptake in the retail, transportation, and

logistics sectors over the past years indicates

that RFID is expected to grow at a fast pace

over the coming 5 to 10 years.

Business stimuli will foster the

implementation of RFID. Key business drivers

for RFID adoption include mainly operational

incentives such as the opportunity to achieve

cost reductions and productivity improvements

along the supply chain and in production

processes. The focus is expected to gradually

move from operational execution activities to

the optimisation of business planning and

intelligence capabilities motivation.

Average payback time for RFID investments

is estimated to be between 2 to 3 years.

Empirical evidence indicates that the

implementation of RFID can enable labour and

total factor productivity growth. It also fosters

innovative activity leading to increases in

turnover. Depending on the implementation

scale, companies can expect a 12 to 18 months

competitive advantage from the implementation

of RFID.

RFID adoption affects workforce

composition. About 30% of companies already

using RFID report some workforce reductions.

These reductions in RFID-enabled departments

are often compensated by a reallocation of the

workforce to other business functions.

Outlook for further developments.

Technological innovations will lead to greater

integration of RFID with other technologies,

real-time locating systems (RTLS), and

business intelligence platforms. Other trends

are embedding RFID in products -such as

contact-less cards- and incorporating RFID into

product packaging, to enable recycling.

Objectives and scope of the study

This document is the Sectoral e-Business

Watch study on Radio Frequency Identification

(RFID) activities in the manufacturing,

transportation, healthcare and retail industries.

Its objective is to describe how companies in

these industries use RFID for conducting

business, to assess impacts of this

development for firms and for the industries as

a whole, and to indicate possible implications

for policy. Findings presented in this report are

based on literature, expert interviews, case

studies and the results of an international

survey of enterprises on their RFID usage

conducted by the Sectoral e-Business Watch

(SeBW) in August and September 2007 in

seven European countries.

The manufacturing, transportation, healthcare

and retail industries as defined for the study

purpose cover the business activities defined in

section 2.1.2.

RFID technology

RFID is mostly used for identifying people,

objects, transactions or events through a

wireless communication connection. It is an

automatic identification and data capture

method (AIDC), which not only helps to identify,

but also to collect data attributes about a certain

object or person, including localisation and

environmental measurements when integrated

with sensor networks. The development of

RFID technology emerges to be one of the

most interesting innovations for the

improvement of business process efficiency

across the manufacturing, transportation &

logistics, wholesale distribution and retail trade

sectors.

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