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RFID in Manufacturing: The race to radio-tag is heating up in manufacturing
Market Report, June 2005, 2716  €


Description

IntroductionRFID is a technology with huge potential in manufacturing.
With multiple applications leading to recognizable business benefits, the global market for RFID in manufacturing is slowly picking up.
Looking at how RFID can be applied to manufacturing and the market dynamics ensures that vendors will be able to bolster their offerings into this key vertical.ScopeThe report looks at the technology behind RFID from a high level and details some of the characteristics behind both hardware and software.The report also investigates the strategy and coverage of 8 different RFID vendors including IBM, SAP and Sun.The report discusses how RFID technology can be applied and implemented to various manufacturing processes within a factory and highlights key issues.This report forecasts the RFID market from 2004 to 2010.
The forecast includes vertical and geographical data as well as RFID technology.HighlightsDatamonitor expects RFID uptake to be gradual.
The impact of exogenous factors such as mandates on manufacturers will continue to drive the greater RFID market to a point where not complying with mandates becomes less expensive than compliance.A part of RFID applications depend on the activity of business partners in the supply chain.
Co-operation between trading partners requires integration of IT systems.
Data integration vendors who are experienced with integrating POS data with IT systems are well placed to capitalize on an area of RFID that is not big now, but will be in future.It is Datamonitor's view that RFID needs to be employed to complement already implemented MES software.
MES, traditionally, has always had a considerable price tag, and as such, many manufacturers who were early adopters of that technology, will be reluctant to discard such a major investment.Reasons to PurchaseThe report looks at what RFID technology is, what is driving it and how it can be applied.Discover how vendors should educate the market to convince manufacturers to take RFID solutions on board.Get to know Datamonitor's estimates for the global market for RFID software, hardware and services.

Sommaire
 
TABLE OF CONTENTS
 
CHAPTER 1 EXECUTIVE SUMMARY 3
 
Introduction 3
 
Key findings 4
 
RFID technology 4
 
Applications of RFID in manufacturing 4
 
RFID considerations 5
 
Implementation options 5
 
Competitor dynamics 6
 
The future decoded 7
 
Introduction 7
 
The RFID market, 2004-2010 7
 
Key findings 8
 
CHAPTER 2 INTRODUCTION 19
 
What is this report about? 19
 
Who is the target reader? 19
 
How to use this report 20
 
CHAPTER 3 RFID TECHNOLOGY 22
 
Introduction 22
 
Key findings 22
 
A brief introduction to RFID 24
 
RFID can be used in batch, process and discrete manufacturing 25
 
The report primarily addresses RFID software 25
 
RFID is being driven by mandates and a desire for more efficient supply chains 26
 
There are multiple mandates driving RFID uptake in manufacturing 26
 
Manufacturers are using RFID to make their supply chains more efficient 27
 
RFID hardware is comprised of multiple components 28
 
There are various types of RFID tags, each suited to different applications 28
 
Readers & antennas are responsible for scanning tags 31
 
RFID software is mainly made up of middleware, but edgeware is starting to grow popular 32
 
RFID middleware deals with the data coming from the tags 32
 
RFID edgeware deals with RFID data before it is sent to middleware 33
 
The EPC Global Network provides an indexing service for multiple parties in the supply chain 34
 
Conclusion 35
 
A magic price point of $0.05 is unrealistic – each business will make its own decision 36
 
Commoditization of RFID tags will not occur any time soon 36
 
Readers look to be an important developing technology 37
 
CHAPTER 4 MANUFACTURING APPLICATIONS OF RFID 38
 
Introduction 38
 
Key findings 38
 
Breaking down manufacturing helps for easier analysis 40
 
Production line applications provide significant benefits 40
 
Production line tracking allows for greater visibility into work in progress (WIP) 40
 
Production flow analysis helps reduce bottlenecks 41
 
Production & yard organisation reduces time spent locating products 42
 
Sensor-based RFID alerts monitoring systems to changes in critical conditions 42
 
Labor applications help increase efficiency by reducing human error 43
 
Asset management is a key area for RFID in manufacturing 43
 
Tracking and managing assets can help reduce production downtime and enhance maintenance 44
 
Inbound inventory and materials can be tracked using RFID 44
 
Ordering & distribution can be enhanced using RFID 45
 
RFID helps keep track of distribution assets through close monitoring 45
 
RFID tags help picking and packing processes become more accurate 46
 
RFID data from upstream and downstream partners can be used for better production forecasting 46
 
Conclusion 46
 
Business partner participation can affect the benefits received by an RFID-enabled manufacturer 46
 
Effective communication between RFID hardware and enterprise applications is crucial for manufacturers 47
 
Different applications of RFID will be adopted at different rates 47
 
CHAPTER 5 RFID CONSIDERATIONS 48
 
Introduction 48
 
Key findings 48
 
Other IT strategies might have a higher priority than an RFID implementation 50
 
The risk of excessively complicating business processes might detract from an RFID solution 52
 
RFID needs to live in harmony with existing manufacturing execution systems (MES) 52
 
Data quality could be the downfall of RFID deployments 54
 
RFID data storage is a small issue, but one that should be watched 55
 
RFID will not replace barcodes immediately – instead they will both be used for varied applications 56
 
The security of RFID data and tags is not a huge issue now, but one that could be in the future 58
 
Choosing the right RFID technology takes into account several factors 59
 
Selecting the right reader for each RFID application is key for complex production processes 60
 
The orientation of tags and readers could affect crucial read rates 61
 
Some materials affect the transmission of RF signals, and need different RFID setups 61
 
The amount of data generated by RFID requires a solid network base 61
 
Conclusions 62
 
CHAPTER 6 IMPLEMENTATION OPTIONS 63
 
Introduction 63
 
Key findings 63
 
A phased RFID implementation can spread both the risks and costs of a strategy 64
 
Phase 1: pallet & case tagging is being used particularly to meet customer mandates 64
 
Phase 2: asset & labor tagging can provide instant impact for manufacturers 65
 
Phase 3: unit-level ID tagging is the most in-depth type of RFID deployment and yields the most benefits 65
 
Manufacturers can focus on an internal RFID deployment, an external one incorporating partner integration, or a combination of the two 68
 
Conclusions 70
 
Datamonitor believes that larger manufacturers will implement RFID gradually, while smaller businesses may go straight to phase 3 71
 
Datamonitor expects internal RFID deployments to outnumber external in 2005 71
 
CHAPTER 7 VENDOR PROFILES 72
 
Introduction 72
 
Informatica 73
 
HP 75
 
Ascential 77
 
Oracle 80
 
Vizional 83
 
SAP 85
 
IBM 87
 
SUN 89
 
Conclusions 91
 
Expertise in retail could help software vendors selling RFID to manufacturers and vice versa 91
 
Education and demonstration must be key strategies for software vendors 92
 
CHAPTER 8 THE FUTURE DECODED 94
 
Introduction 94
 
Key findings 94
 
The RFID market, 2004-2010 95
 
Global RFID market to exceed $6 billion by 2010 95
 
North America to lead – EMEA and APAC to grow quickly 96
 
Germany and the UK are key EMEA RFID countries 97
 
China and Japan will lead APAC as it reaches a total $1.26bn by 2010 99
 
Manufacturing will account for 49% or $3bn of RFID investment in 2010 101
 
Pharmaceutical, CPG and the automotive industry will drive global manufacturing spend on RFID 103
 
Hardware comprises the bulk of RFID revenue with services playing a greater role in the future 109
 
CHAPTER 9 APPENDIX 112
 
Future readings 112
 
SPP writing team 113
 
How to contact experts in your industry 114
 

 
LIST OF TABLES
 
Table 1: RFID applications in batch, process and discrete manufacturing 25
 
Table 2: RFID tag types 29
 
Table 3: RFID vs barcodes 57
 
Table 4: Production line applications 66
 
Table 5: Asset management, inventory management, labor applications 67
 
Table 6: Ordering and distribution, up/downstream data flows 68
 
Table 7: By 2010, North America will have hit $2.6bn while EMEA will only just edge past $2bn 97
 
Table 8: EMEA RFID revenues 99
 
Table 9: APAC RFID revenues 100
 
Table 10: RFID vertical revenues 102
 
Table 11: RFID manufacturing revenues 104
 
Table 12: RFID cost split 2004 - 2010 109
 
Table 13: RFID hardware investment projections 111
 

 

 
LIST OF FIGURES
 
Figure 1: RFID software vendors from a variety of backgrounds 6
 
Figure 2: North America will be the biggest market for RFID from 2004 to 2010 8
 
Figure 3: An overall view of RFID technology 24
 
Figure 4: The report focuses on just manufacturing in the supply chain 26
 
Figure 5: A typical RFID setup includes readers, antennas and tags 32
 
Figure 6: RFID middleware stack 33
 
Figure 7: The EPCGlobal network relies on EPC Information Services 34
 
Figure 8: RFID affects different areas in manufacturing 40
 
Figure 9: In 03/04, 78% of manufacturers surveyed had decided to wait and see about RFID. 51
 
Figure 10: RFID and MES integration 53
 
Figure 11: RFID data integration will take time 55
 
Figure 12: Value generation: nternal vs external RFID deployment 69
 
Figure 13: RFID software vendors from a variety of backgrounds 72
 
Figure 14: An overview of HP 75
 
Figure 15: An overview of Ascential 77
 
Figure 16: An overview of Oracle 80
 
Figure 17: An overview of Vizional 83
 
Figure 18: An overview of SAP 85
 
Figure 19: An overview of IBM 87
 
Figure 20: An overview of Sun 89
 
Figure 21: North America will be the biggest market for RFID from 2004 to 2010 97
 
Figure 22: UK and Germany are the biggest European RFID countries, with 23% and 28% market share respectively in 2010 98
 
Figure 23: Most RFID revenues in 2004 were generated in Japan, but China is growing faster 99
 
Figure 24: Manufacturing is the largest RFID vertical, with 49% of investment in 2010, dropping from 54% in 2004 101
 
Figure 25: Pharma, CPG and automotive will generate the most global manufacturing RFID revenues from 2004 to 2010 103
 
Figure 26: CPG will grow its market share by 6% between 2004 and 2010 in EMEA 106
 
Figure 27: Pharma will grow strongly in North America, reaching 18% market share for RFID investment by 2010 107
 
Figure 28: High-tech and electronic RFID investment market share will increase by 2% between 2004 and 2010 in APAC 108
 
Figure 29: Hardware is the largest cost for RFID 109
 
Figure 30: Tags and labels will shrink from 48% of total hardware cost in 2004 to 39% in 2010 110
 

 
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