Frost: RFID Pilots, Supply Chain Management Efficiencies Ensure Asia-Pacific RFID Growth
October 29, 2007 // Published as a news service by IHS
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Buoyed by the success of the increasing numbers of radio frequency identification (RFID) pilots and projects in supply chains, end-users are becoming progressively keen on utilizing RFID.
According to Frost & Sullivan, better visibility will aid the creation of a more efficiently managed supply chain, which will enable them to reduce their overall operational cost. They can achieve greater efficiencies if the RFID project deployment takes place on an end-to-end scale.
Recent analysis from Frost & Sullivan of the Asia-Pacific RFID supply chain market found earned revenues of $170.3 million in 2006, with estimates to reach $646.3 million in 2013.
"Presently, the key driver for RFID adoption in the supply chain for the Asia-Pacific market is compliance with mandates set by retail giants located in the U.S. or Europe," said Frost & Sullivan research associate Richard Sebastian.
"Once end-users begin to realize that RFID's value extends beyond mere mandate compliance, this technology is expected to experience large-scale adoption."
An increasing number of mandates in Asia-Pacific will indirectly spur RFID adoption in the supply chain within this region. Analysts said other companies and organizations in this region are expected to announce new mandates once they deploy RFID within their own supply chain.
The ratification of standards and frequency allocation for RFID technology will make it more feasible for end-user adoption. As costs gradually come down, analysts said more end-users will be able to afford RFID in their supply chain, ensuring the technology thrives in the Asia-Pacific supply chain market in the next few years.
"To build on this greater interest in RFID, all parties involved with it need to better educate end-users about its actual benefits, without over-hyping it," said Sebastian. "Although end-users more or less understand what RFID technology is on a general level, they are unable to comprehend how RFID can transform their supply chain to be more efficient, and hence, earn them ROI [return on investment]."
Analysts said end-users need to conduct feasibility studies and plan cleverly to restructure the entire business processes to accommodate this technology. Without proper planning, they will not be able to reap the full benefits that RFID has to offer to their supply chain.
Source: Frost & Sullivan.