The untold RFID story: Product innovation in electronics

With suppliers working feverishly to comply with requests from major retailers and government agencies, most companies' RFID efforts to date have centered on shipment compliance, which generally benefits the client, but not the supplier incurring the investment. However, client mandated use of RFID in the supply chain barely scratches the surface of the benefits RFID offers.

Just as the Web browser served as the spark for generating innovative uses of the Internet that go well beyond Web browsing, RFID will soon transcend basic asset and inventory tracking, and will become an important aspect of the next generation of connected electronic products.

RFID allows not only greater innovation in product manufacturing and distribution, but when it is combined with the appropriate networking infrastructure it can enhance the way products themselves function -- which can mean far greater returns for electronics companies.

Big retailers (such as Wal-Mart, Metro and Tesco) have established a challenging timeline to implement RFID technology -- from their supply chain to the retail shelf. In addition, government agencies such as the United States Department of Defense (DoD) are rapidly embracing RFID and demanding that suppliers fall into step. If suppliers want to remain competitive, they will have to comply with these mandates, at the very least adding RFID to their products on item, packet, pallet or container level, depending on the demands of their most important customers.

While tagging offers benefits such as reduced out-of-stock on the retailer's shelf, cost-conscious supply chain managers will look for other opportunities to recoup investments made in RFID compliance. Indeed, most will first look to the enhanced supply chain visibility and performance RFID tagging offers. But the greatest opportunity for electronics companies lies well beyond the supply chain -- in process and product innovations that may yield even greater returns.

RFID can be used to increase automation and optimize processes across receiving, manufacturing, work-in-progress management and shipping -- resulting in faster time to market. Here, RFID can provide the crucial link between manufacturing execution systems and the physical world. For instance, RFID chips can be used on manufacturing equipment to signal condition or wear, circumventing delays caused by faulty or failing machinery. RFID application is especially compelling in situations where limited manual (human) intervention is desired. For instance, many electronics manufacturing environments require clean rooms, necessitating a solution that embeds out-of-sight, fully automated identification.

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