A growing number of midsize manufacturing and warehouse/logistics-management companies are planning for radio-frequency identification in their plants and warehouses. Just to define the trend, Progress Software Corp. polled its application partners, many of which sell software to these same companies.
Progress asked its customers, who use its relational database, development tools, and other products to build business apps, about their RFID needs and found that 45% say their customers will need RFID capabilities. The need is becoming acute as mandates from Wal-Mart, Target, the Department of Defense, and others mount. A few application partners already have incorporated RFID into their software, Progress reported last week at its annual partner and user conference.
Thirty-five percent of the application providers say the biggest business benefit of RFID will be improved inventory management, while another 30% say real-time visibility into their warehouse and manufacturing plant operations will be a major benefit.
QAD Inc., which uses Progress' products to develop enterprise resource planning applications for midsize manufacturers, is seeing more interest in RFID rather than outright demand, chief technology officer James Kirkley said at the conference. "They'll move when they have to move," he said, although a few are beginning to use RFID for internal tasks such as tracking raw materials and components. Auto-parts makers that sell into the after-market, especially through retailers such as Wal-Mart, will help spark demand in the automotive industry, he predicted.
Progress is taking steps to support its application partners' RFID efforts. The company has set up an RFID testing lab at its headquarters to help application partners build and test Progress-based RFID apps. This fall, the vendor expects to have adapter technology for linking applications to RFID readers. And Progress has positioned its object-oriented ObjectStore database, acquired when it bought Excelon Corp. in late 2002, to perform the real-time data management that RFID systems will need.
Apprise Software Inc., which develops applications for consumer-goods distributors, and Integrated Warehousing Solutions LLC, which builds warehouse and supply-chain-management apps, have already built RFID capabilities into their products. Most Integrated Warehousing customers are using passive RFID tags for routing materials within their business, but president Carl Brewer said active-RFID systems will provide managers with a comprehensive view of their warehouse and facilitate vendor-managed inventory.
Dabac GmbH, a developer of ERP apps based on Progress technology, has built RFID capabilities into its software. Cambium Forstbetriebe, a German forestry-management company, is working with Dabac to develop an RFID system for tracking logged trunks from the time they are cut to when they arrive at saw mills--some as far away as India and China.
RFID tags will be attached to harvested trees, and loggers will record data about the logs, including its size and quality, in a handheld device, Gerhard Friemel, Cambium Forstbetriebe's owner, said at the conference. When the system is put into use later this year, Friemel says, it will help track logs through each step of the shipping process and speed payment from sawmills back to his company.
Mark Palmer, Progress' RFID technical evangelist, said most early RFID applications--especially those in the retail industry--are largely automating existing processes. But some are breaking new ground. He pointed to Delta Air Lines Inc.'s use of RFID for bag-matching applications to meet Federal Aviation Administration requirements. Using RFID speeds aircraft turnaround time on the ground, he said.
Thirty percent of Progress' application partners said the cost of RFID-related hardware, including readers and tags, will be the biggest hurdle to RFID adoption, the survey found. Integrated Warehousing's Brewer said companies have a lot of installed IT infrastructure that will have to be changed before RFID really catches on.