Reliable identification technology would help make significant operational improvements and a material difference to the automotive industry, which operates in a complex supply chain environment, concludes the latest RFID Market Strategy Report by research firm Research and Markets.
The report, based on a study involving 526 radio frequency identification (RFID) companies worldwide, states that most automotive companies run on just-in-time inventory management principles, but run the risk of major disruptions even with minor errors.
Research and Markets argues that the documented advantages of RFID over barcodes hold true for the automotive industry as well - a sector that is generally ahead of the technology curve compared to other manufacturing sectors and can implement and adopt complex systems, provided vendors present them with a compelling financial or deployment model.
"Most automobile companies have already implemented RFID for parts tracking, capital asset management or vehicle-related applications. They are not new to RFID technology," says Research and Markets senior manager Amy Cole.
"Being small in number, auto assembly companies wield significant clout in driving the entire supply chain to implement new technologies such as RFID."
The report also provides market estimates and forecasts by geographic region, as well as profiles of RFID vendors, applications, technology, standards, industry sectors, success strategies and implementations worldwide.
Among the key findings of the report are that there is broad agreement among analysts about the potential and opportunities for RFID, despite varying predictions regarding growth rates and adoption.
The study also concluded that companies should have an enterprise-wide and global strategy for RFID technology and infrastructure. However, the report cautions that, while RFID provides a start, it is not a solution for all business/supply chain challenges.
It further found that the key to success is in collaboration, as no single vendor can offer end-to-end solutions with their own products and services.
Research and Markets claims that the worldwide RFID market was valued at $1.49 billion in 2004, including sectors such as RFID readers, active tags, passive tags, ICs, software and services.
In terms of an update on RFID industry trends for this year, the report notes that rapid growth rates predicted for RFID, based on the Wal-Mart compliance deadline of January 2005, did not materialise.
"As companies get deeper into RFID planning and analyse potential business process changes, and with the introduction of Gen2 products, the nature and scope of projects will change, with a long-term roadmap. This is a good thing for the RFID ecosystem as a whole, and helps avoid future implosion from poorly planned and implemented solutions," the report points out.
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