Expansion in North American RFID market

The radio frequency identification (RFID) markets in North America are expected to witness significant growth with the rising need for highly responsive and integrated information systems.

The radio frequency identification (RFID) markets in North America are expected to witness significant growth with the rising need for highly responsive and integrated information systems.

Greater deployment of RFID will enhance the demand and supply balance in automotive, aerospace and industrial manufacturing.

New analysis from Frost and Sullivan reveals that the North American Radio Frequency Identification Markets for Automotive, Aerospace and Industrial Manufacturing earned revenues of $71.3 million in 2005 and estimates to reach $225.7 million in 2012.

The production and logistics divisions in the automotive, aerospace and industrial manufacturing sectors have increased focus on expanding their operations and decentralising supply chain activities.

Participants are moving toward lean manufacturing trends and outsourcing operations across global supply chains to achieve cost efficiencies and remain competitive.

"RFID has remarkable potential to integrate these supply chain and enterprise resource planning (ERP) systems with manufacturing applications," states Frost and Sullivan Research Analyst Priyanka Gouthaman.

"It enables tracking and identification of inventory (inbound as well as outbound), work-in-progress (WIP), critical assets, spares, tools and high-value components, thereby providing real-time operational visibility across the length of the value chain".

However, current technology-enabled processes concentrate mainly on specific areas such as procurement, manufacturing and warehouse management, rather than on the integration of the various systems across geographic locations and logistic partners.

"RFID will facilitate integration of such stand-alone systems and synchronisation of data across supply chain partners, thereby aiding real-time tracking of assets," notes Gouthaman.

"It helps manufacturers to improve production planning as well as reduce costs related to shrinkage, obsolescence, under-utilisation of existing resources, warehouse space and transportation".

While such benefits are likely to boost the adoption of RFID among large manufacturers, smaller participants will have to be lured with cost-effective systems as well as processes aimed at capturing value from investments.

"Most vendors offer starter kits that enable small end-user enterprises to experiment with limited investment scope and envision the potential benefits of the technology prior to large-scale pilots or deployments," explains Gouthaman.

Apart from vendors' initiatives, the market is also receiving ample support from statutory authorities in the form of industry regulations and policies.

These regulations could help in effective product recall management, which has been a major cause for concern in the manufacturing segments.

"The efforts of the Automotive Industry Action Group (AIAG) and EPCglobal data in integrating the B-11 tire and wheel label as well as RFID standard enables item-level tagging within the industry," states Gouthaman.

"The US Federal Aviation Administration (FAA) is likely to propose a policy for the use of passive and active RFID technology for tracking cargo and aircraft components".

Such legislative influences and regulatory compliances are anticipated to stimulate industry-wide adoption levels and drive the growth of the RFID markets.

North American Radio Frequency Identification Markets for Automotive, Aerospace and Industrial Manufacturing is part of the AutoID and Security subscription service, which also includes research in the following markets: World retail RFID markets - a retailer perspective, World RFID in retail and supply chain applications - a supplier perspective, World RFID in healthcare and pharmaceutical applications, World RFID middleware markets, and World RFID based applications markets.

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