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It's underway
Adoption of radio frequency identification technology is underway in many countries, with some industries already beginning to realize tangible benefits. In health care, R&D and diagnostic labs are tracking samples and chemicals more efficiently; and some pharmaceutical manufacturers, distributors, and retailers have begun employing it to identify counterfeit or expired items. Several nationally known U.S. hospitals are experiencing payback from systems that track and reorder supplies. China has issued more than 1.5 billion RFID-enabled consumer payment cards as part of its "Golden Card" project.
In the supply chain, RFID technology is being used to decrease cost and increase security in shipping and inventory management. Utilizing RFID and global positioning systems (GPS) in a “cross-docking” application that matches inbound ocean freight containers with outbound truck trailers, a leading third-party logistics provider (3PL) has reported a 20 percent productivity increase in its Port of Long Beach, California, operations. In a similar application at the Port of Los Angeles, another 3PL is moving 12,000 containers a week in the space formerly used to move 7,000 containers.
RFID can potentially enable port authorities to quickly and accurately check entire containers for hazardous and illegal goods, instead of simply spot-checking selected containers. And RFID-enabled seals on containers promise substantial improvement in cargo security.
Some airports and airlines have begun trials in baggage handling to reduce losses. In automotive manufacturing, RFID technology is combined with sensors to automate a variety of processes.
This is only the beginning. The vast majority of applications have not yet been conceived.
In this early phase of the RFID market, forecasting spending after widespread adoption, perhaps ten years from now, is difficult. One analyst predicted global market expenditures in 2015 of about $27 billion (“RFID’s Explosive Growth”, Line56, February, 2005). In 2005, the value of the worldwide market for RFID products and services was estimated at $2 billion. The current growth rate of RFID is more modest than had been projected in 2005, but the market is growing. Transformative technologies like RFID, which affect organizations' back-end systems, inter-organizational communication, and industry standards, do not take hold overnight. Yet, numerous organizations are already experiencing efficiency gains from RFID implementation.
Adoption will spur reduction in the cost of RFID tags, and vice versa. With passive tag prices currently ranging from $.07 to $.30, the so-called “magic tag price” of $.05 may be a year or more away. Sub-cent tags made of printed plastic in lieu of silicon may be yet farther away. Given the eventual cost reductions, market size will be determined by Asia’s adoption of the technology and the development of truly global standards