Radio frequency identification (RFID) is the most rapidly growing segment in today's automatic identification industry. The creation of the Auto-ID Electronic Product Code (EPC) Standard coupled with now affordable RFID tag costs and the mandated adoption of the Auto-ID EPC Standard by Wal-Mart for all its suppliers by 2005 will drive rapid deployment.
The use of RFID and the adoption of the Auto-ID EPC Standard will provide data about products delivered to the market never available before. With EPC, each and every good produced will have its own serial number. Manufacturers, distributors, retailers and consumers will have information about a unique product available to them at any given time. In addition, RFID as an identification technology will radically change processes as we know them today within the Supply Chain.
While the potential benefits from RFID are great, Catalyst expects the adoption rate to evolve initially from applications involving tracking at the pallet and case level to tracking at the item level. This evolution will progress as the cost and capability of deploying RFID at the item level becomes more economical and operationally feasible. Adoption will also be tempered by the implementation issues that RFID surfaces. While its capability is far greater than bar code, RFID presents operational issues caused by RF interference in the environment as well as confirmed read accuracy.
We expect the adoption of RFID across the Supply Chain to bring significant benefits. RFID will enable automatic product replenishment thus potentially eliminating stock outages at retail locations. Customers will be assured they are receiving the freshest product. Quality and product traceability will be improved. Theft will be reduced. The most significant benefit should come in reduced costs through efficiency gains and operating improvements that will be driven by RFID.
Catalyst recognizes that its customers must be able to adopt this new standard while at the same time migrate from their current use of bar codes. This migration will take years to accomplish. To facilitate this migration, Catalyst is enabling its entire product suite to adopt the use of the RFID EPC standard and the process changes that the RFID EPC standard will bring. At the same time, Catalyst will support the mixed identification environment of active and passive RFID and bar code that will exist in customer operations for years to come. Additionally, due to the complexities surrounding the installation of an integrated RFID solution, Catalyst has broadened its Consulting Services capability to offer its customers RFID planning and implementation services on a global basis. Catalyst has also formed key strategic relationships with RFID partners to ensure that its customers are receiving the best and most complete RFID solution.
This document summarizes the approach Catalyst International is taking to provide RFID enabled solutions to its customers.