RFID adoption to surge in 2004

A new "pulse survey" says that the global packaging industry expects that consumer, retailer, and manufacturer benefits from radio-frequency identification will accrue over the next three years.

That’s according to a Packaging Strategies/Cap Gemini Ernst & Young survey conducted March 24 of 275 participants attending the 17th annual Packaging Strategies Summit conference in Atlanta, GA. The survey indicates that the global packaging industry is bracing itself for the rapid adoption of radio-frequency identification beginning this year.

The "pulse survey" found that more than half (54%) of those surveyed believed that Wal-Mart’s 2005 supplier mandate will be a "catalyst" for the evolution of RFID adoption in the industry, compared to less than one in six (15%) who felt it is "overrated." In addition, more than half of respondents (51%) believe RFID is "a major business driver this year" or were initiating a program and action plan in 2004.

The survey also found that while more than half of respondents (58%) agreed that retail will be most impacted from the first wave of RFID adoption by 2010, nearly one-third (31%) believed that the health and pharmaceutical industries will be transformed by RFID leading to improved security for prescription drugs and reduced-shrink/gray-market losses. Not surprisingly, half of all respondents (50%) believed that globalization and off-shoring will be the 2004 business imperative that will have the greatest impact on the future of packaging strategies during the next three years.

Other survey highlights were as follows:

  • Half the packaging industry respondents (51%) believed that "improved product availability" will be the number one benefit to consumers from RFID adoption, while less than one in five (19%) pointed to consumer savings stemming from reduced product costs.

  • The jury is still out on the primary benefit of RFID adoption to retailers and distributors, as nearly four in ten (39%) chose "improved inventory turns," while one in three (33%) pointed to reduced logistics costs/handling.

  • According to one-third (34%) of survey respondents, manufacturers will benefit most from RFID adoption around "improved marketing data," while another one in six (17%) said there will be no benefit because RFID "is just another bar code."

  • In terms of potential worries around an RFID solution for a packaging organization, almost half (46%) pointed to implementation/integration, while two in ten looked to problems with tags (21%) or software (18%) for their biggest potential headache.

    An overwhelming majority (71%) believe supply chain operations should have organizational control over RFID programs, while only one in ten point to finance, sales or marketing (12%) or Information Technology (11%) to champion the RFID cause internally.

    For complete RFID survey results, click www.us.cgey.com or visit www.packstrat.com .

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