IBM has opened up the doors on a new European test and interoperability laboratory for piloting and proving radio frequency identification technologies. The adoption of RFID will not only help retailers and consumer goods manufacturers better manage their stocks, it will also offer a potential windfall for the likes of IBM Global Services, Accenture and Computer Sciences.
The new centre, which is based in Nice, France, will test RFID chips, data-collection readers and related applications software to find out if they integrate effectively and work well together. It will mirror the facilities of IBM's existing RFID testing laboratories at Gaithersburg, Maryland and Kanagawa, Japan.
Last month, RSA Security said it would start to offer early adopters of RFID technologies a range of application security test and design services. But it is the big services firms of Accenture, Computer Sciences, Deloitte Touche Tohmatsu, and IBM Global Services that stand to gain the most from RFID adoption.
According to the latest market forecasts, manufacturers are expected to spend $3bn on RFID technology and services in 2007, up dramatically from current spending levels of about $500m. Some 1,000 IBM employees are already involved to some extent with RFID.
RFID technology is poised to revolutionise the way products are manufactured, tracked, sold, and bought across business supply chains. RFID uses low-powered radio transmitters to read data stored in smart tags embedded with tiny chips and antennas. The tags are attached to packaged goods that can communicate with electronic reading devices and deliver a message to a computer that alerts retailers and suppliers when a product is taken off a store shelf or moved out of a warehouse.
The business benefits being mooted for RFID are particularly compelling to retailers and consumer packaged goods companies. Procter & Gamble estimates between 10 per cent and 16 per cent of its products may be out of stock at any one time. Reducing that by just 10 per cent to 20 per cent could mean a revenue boost of between 1 and 3 per cent, worth more than $400m.
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