Over supply and under supply in RFID
Aug 17, 2004
Systems integration experience needed
It is somewhat surprising that with many mandates and recommendations by retailers, the US TREAD act, the FDA RFID recommendation etc, there are still few "one stop shops" for RFID systems. Users of the technology are faced with approaching different companies for tags, readers, middleware, and much of the exercise is to co-ordinate these and bring he components together.
It comes as no surprise then, that the companies who adopted RFID early on are among the elite of the systems integrators, and now consult others. For example, Scottish Courage Brewing, after successfully tagging 2 million beer kegs, joined with the integrator KTP to form Trenstar, which now manages beerkegs and roll cages for Scottish Courage and other companies. Air Liquide, who used tags on gas cylinders 5 years ago, has now set up a systems integration business for RFID. International Paper, whose adoption of RFID in warehousing was a huge success, now sell systems integration for warehousing to others.
Tag supply in trouble?
With many activities such as mandates and recommendations for the use of RFID, volume demand for tags is going to jump. Cumulative sales of RFID tags over the last 60 years are paltry - 1.5 billion or so - we expect this volume to be delivered in just one year within a few years time.
However, tag suppliers are faced with a problem - do they heavily invest in scaling up now to produce hundreds of millions and billions of tags, in anticiaption of these orders, even at the risk of their business if these orders do not come through? Or do they wait and lose out to competitiors who take the risk and do? It is true that there are, however, many suppliers, so users will initially be able to source tags they need, but buying them from different suppliers presents its own set of problems.
Over supply in middleware?
There is potential oversupply in middleware with many companies - from the largest software and database companies - to startups - trying to muscle in on the act.