Survey: RFID Development Outpacing Demand

A new survey conducted by theComputing Technology Industry Association (CompTIA) shows that while vendors are gearing up for greater use of radio frequency identification applications in the supply chain, customers have been slow to accept them.

A whopping 84 percent of technology resellers, solution providers, systems integrators and consultants are planning or are likely to introduce RFID products and applications in the next three years, according to the survey.

However, nearly two-thirds of the companies, or 65.6 percent, said their customers have yet to implement even basic RFID technology. Indeed, fewer than 20 percent of their customers are active users of the technology.

Retail, Pharma and Automotive

Retail, pharma and automotive “are the areas in which we have seen the greatest interest and deployment of RFID,” CompTIA spokesperson Steven Ostrowski told CRM Buyer.

Asset-tracking and closed loop manufacturing applications are the most typical deployments, he added.

The area in which RFID is likely to bring the greatest value-add — a supply chain of multiple partners and vendors — is where deployment of the technology is slowest, he said, and probably accounts for the large percentage of vendors’ customers that have not moved toward adopting it.

“There is still demand, but adoption is moving slower than some of the projections over last couple of years predicted that it would,” Ostrowski said. “Our sense is that organizations underestimated the complexity of enabling the supply chain with RFID, especially in dealing with multiple partners and systems.”

Other barriers to adoption have been a workforce skills shortage and the still-unclear return on investment for supply chain applications, according to David Sommer, vice president of e-business and software solutions at CompTIA.

Still Bullish

Despite these realities, vendors are still bullish on the space, according to the survey, and continue to develop products and services in anticipation of future demand.

Some 89 percent plan to focus their product development and marketing efforts on hardware installation and maintenance. Just over 46 percent of the respondents said they will offer software implementation services; 38.9 percent will offer other RFID services; and 31.5 percent plan to focus on software development.

Participants in the Web-based survey included companies directly involved in the delivery of IT products and services. This is the third year CompTIA has conducted it, Ostrowski said, and the findings thus far have remained consistent.

“The number of companies offering RFID services, for example, have been relatively the same for the last three years,” he noted.

The survey reflects what most in the industry have already observed in the market, Ostrowski pointed out: “In the beginning, there was a lot of hype that everyone was going to deploy it which led to the perception that it has been unusually slow to take off.”

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