UK companies shun RFID technology

New research carried out by e.centre, the UK's leading supply chain efficiency association, shows that despite the hype, 85 per cent of UK companies have no plans to introduce radio frequency identification (RFID) technology in their organisations.

The results of the survey, which spanned all industry sectors, have prompted e.centre to call on companies to embrace the technology that is capable of dramatically improving supply chain efficiency.

The survey quizzed supply chain managers from medium to large enterprises and despite 88 per cent of those questioned agreeing that RFID was a beneficial technology, only eight per cent are using or piloting RFID in their organisations. The results are particularly surprising as a poll conducted by e.centre last summer among a sample of FMCG retailers, found 40 per cent of respondents planning RFID deployment by 2005.

Steve Coussins, e.centre's chief executive, says: "The results of this survey show an alarming, widespread indifference to a technology that will bring significant benefits to business supply chains. RFID is here to stay. It will enable all trading partners in a supply chain, in any industry sector to track and trace products in real-time and manage stock more efficiently."

The study provides further evidence that retailers are driving forward the adoption of RFID technology, with other industries failing to grasp major opportunities for supply chain efficiency. Currently big name stores, such as e.centre member Tesco, are conducting important trials, but the potential for other industries, such as healthcare, is vast.

"As with the uptake of bar coding 25 years ago, the retail sector is leading the way with implementing RFID technology," says Martin Swerdlow, chief executive, Integrated Product Intelligence (IPI). "A growing number of major retailers have announced plans to begin implementing RFID solutions in 'end-to-end' supply chains. Manufacturers and trading partners need to get active, so that RFID is a benefit to them too, not just an imposition."

A not for profit organisation, e.centre is paving the way for successful RFID adoption in the supply chain with the launch of a single, global, open standard for the technology. EPCglobal goes live in the UK in Spring 2004, removing the final stumbling block to the technology's integration with bar coding and other business-to-business communications. Almost two thirds of survey respondents agreed that such a standard would greatly encourage the uptake of RFID.

"The UK has been at the fore of RFID testing and development and yet the poll suggests that we are losing momentum," said Coussins. "We must not lose out when it comes to the final stage of implementation. It is of vital importance that UK companies begin to devise strategies for piloting and implementing the technology in line with the EPCglobal Network standard. To this end, e.centre will continue working with Industry to provide support and education and co-ordinate trials in this field. This will demonstrate that the EPCglobal Network is a cross-sector standard, which will potentially deliver benefits that exceed existing technologies."

Other top line findings from the survey included:
46 per cent of respondents agree that RFID technology could potentially deliver better results than existing technology
47 per cent of supply chain managers think that the current costs of RFID technology outweigh the potential benefits
78 per cent of respondents believe that privacy will not be an issue for consumers.