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[February 25, 2004]
Target's Supplier Mandate Further Validates RFID Claims, Says ABI
Continuing the worldwide RFID supply chain adoption push, Target, the fourth largest US retailer, announced supplier RFID mandate plans last week. In broad terms, Target’s announcement furthers RFID’s push for legitimacy in supply chain visibility initiatives. In more direct terms, it signals that consumer packaged goods (CPG) suppliers should reconsider short-term minimalist RFID compliance efforts and look at a more holistic enterprise, with a cross-customer focus and long-term RFID solution planning, notes technology research firm ABI.
When Wal-Mart bespoke its RFID mandate in spring 2003, its suppliers progressively educated themselves on RFID and its potential in the warehouse and supply chain. When the Department of Defense (DoD) and leading European retailers decreed 2005 mandates, suppliers, still not convinced these commitments would intersect, pushed separate trials within warehouse and distribution center settings.
Now, however, Wal-Mart is not alone in U.S. retail RFID compliance issuance. With an RFID hardware, software and integration services market expected to exceed $7 billion by 2008 according to ABI, Target’s RFID announcement genuinely commits suppliers to multi-customer commitment that is not tied to Wal-Mart’s three Texas-based distribution centers. New RFID-enabled supplier distribution center locations mean either increasing one-off RFID out of the box solutions, or pushing larger, integrated RFID solutions that span multiple locations across the country. In short, CPG suppliers must now ask: how many $250,000-$500,000 RFID-in-a-box compliance products do we buy before we shift directions and plan larger, more IT-focused supply chain and enterprise RFID solutions?
With recent RFID initiative announcements from Cisco, Microsoft, Oracle, SAP, and TIBCO, traditional enterprise application, software, and networking companies are sensing larger interconnected RFID opportunities.
Approaches and insights to these business issues are addressed in ABI Research’s RFID Subscription Service. The information service follows the technologies for RFID applications, including asset management, supply chain management, and point-of-sale, and also covers RFID standards, applications, and vertical markets. Selected RFID vendors, integrators, developers, and IC manufacturers are profiled, along with their various technologies and product offerings.
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