RealTime IT News

RFID's Marquee Cast Expands

Some of the biggest names in technology -- IBM, Microsoft, Phillips, Oracle -- came out strong on RFID this week, with announcements of initiatives and pilot projects.

The rush of announcements is due to mandates from Wal-Mart and the Department of Defense that key suppliers begin tracking of pallets of goods by January 1, 2005 with radio frequency identification (commonly referred to as RFID).

"Top suppliers have no choice but to get ready for this," said Nucleus Research analyst Kathy Quirk. "There's enough business out there for vendors to need to make the outreach to customers. You have a captive audience that needs to get a solution in place, with a tight deadline."

That deadline is tight indeed. With most of these vendors planning to have their RFID solutions in distribution mid-year, suppliers are in the position of either betting their relationships with top customers on pilot software or scrambling to get their RFID projects up in just six months.

Adding to the mix, Oracle Tuesday announced that the next version of its Oracle Warehouse Management software would include RFID and electronic product code (EPC) capabilities. The announcement took place at the software vendor's AppsWorld users' conference, held in San Diego this week.

The new version of the software is expected to allow for automated processing of inbound and outbound shipments of pallets or individual cases of products. The company said the information would be available to its Oracle 10g Database and Server systems. Oracle said it expects to ship the new version of the software this summer.

The company said that 7-Eleven has been evaluating the technology for the last year. "We are keenly interested in the new RFID capabilities within Oracle Warehouse Management," 7-Eleven CIO Keith Morrow said in a statement.

On Monday, IBM and Royal Philips Electronics said they would work together to develop RFID hardware and software for supply chain management, retail and asset management. They'll also cooperate on developing sophisticated smart cards with biometric authentication for banks, governments and event ticketing. For example, smart cards could be used to identify recipients of government services such as health care.

Eric Gabrielson, world wide director RFID of solutions for IBM Global Services, said the two companies plan to provide an end-to-end product, from tags to middleware to business consulting, that's based on industry standards. The companies will comply with the EPCglobal specifications for RFID technology.

IBM and Phillips have already started one joint project: an RFID system for Philips Semiconductors' manufacturing and distribution facilities in Taiwan and Hong Kong. In the first phase, wafer cases and carton packages will be tagged at Philips Semiconductors' Kao Hsiung manufacturing site in Taiwan and the division's distribution center in Hong Kong. The project began in November and will be up and running by the end of 2004.

Gabrielson said the companies would use the internal project as a proof of concept. "It has a specific return on investment that they want to try to find," he said. "We'll combine skills with Phillips and learn from each other to create industry vertical solutions."

Not one to be left on the sidelines, Microsoft Business Solutions Monday also revealed details of a pilot project with Danish snack manufacturer KiMs. KiM is a midsize Danish manufacturer that ships some 100,000 pallets of snacks per year. The project extended Microsoft Axapta business software, which KiMs already uses, to incorporate data from RFID tags into demand planning, event management, trading partner collaboration and warehouse management. The project went live in December 2003 after three months of work.

This news followed RFID announcements last week from SAP and TIBCO . SAP announced a package built on its Web Application Server that manages data received via RFID tags and integrates it with SAP R/3 and mySAP ERP. The company said it has done pilot projects with Procter & Gamble. TIBCO announced a partnership with tag maker Alien Technology to let Alien's tags send data through TIBCO's integration infrastructure. Both SAP and TIBCO hope to have their products in distribution by the middle of this year.

However, suppliers need to keep in mind that they won't see any return on their RFID investments in the short term, according to analyst Shrupi Yadev, also of Nucleus Research. But the arrival of major software vendors should give them some confidence.

"It will be helped by the fact that IBM and Phillips and companies like them are starting with in-house deployments," she said. "Then, they'll extend that as an offering for their customers. Definitely, it will be reassuring to customers that companies are pouring R&D into this area."