Smaller logistics companies unprepared for RFID roll-out

Tesco’s announcement that it has signed a multi-year contract to purchase thousands of radio frequency identification (RFID) readers and antennae is a clear indicator of the retailer’s ambitious roll-out plans for the technology, claims a senior analyst with market intelligence firm Analytiqa.

Mark O’Bornick claims this development brings more widespread implementation of RFID technologies another step closer. But he warns that while much has been reported on the effect of RFID on retailers and manufacturers, the implications for logistics providers in the middle have been largely overlooked.

Research carried out by Analytiqa shows a lack of knowledge at smaller third-party logistics providers (3PLs). This could hold back RFID implementation, claims O’Bornick, as many firms expect 3PLs to work in partnership with them to push forward RFID projects.

O’Bornick reports that Danone wants its logistics providers to bring their economies of scale into play and be “fully aware of RFID technology issues and opportunities”. Danone expects such 3PLs to take the lead, he adds.

“Item-level tracking is several years away, but there is no denying that RFID gives the companies an advantage over barcodes, ensuring product visibility throughout the supply chain,” says O’Bornick. For more details about the study visit http://www.analytiqa.com​

Meanwhile, as Wal-Mart drives ahead with its mandate for its top 100 suppliers to use passive RFID tags on cases and pallets, a separate study of ‘best practice’ conducted by US-based Arc Advisory Group among 24 companies actively investing in electronic production code (EPC) RFID has found that ‘slap and ship’ applications, where tags are manually applied at a packaging line or distribution centres (DCs), is less common than many believe.

“In our sample, 85% of the facilities where tags were applied were DCs,” says Arc service director for supply chain management, Steve Banker. “However, even when tags are applied at the DC, the term ‘slap and ship’ does not fairly reflect what is going on at many DCs. There is both more automation and more process variation than had been previously recognised.”

For more details visit http://www.arcweb.com​