RFID is India Software Inc’s route to retail

Radio Frequency Identification is a hotbed of activity for Indian software companies targeting the global market in retail, logistics and manufacturing, says Abhinav Singh

RFID can constitute a breach of privacy as anyone having a tag reader, authorised or not, can track an object or a person wearing an RFID tag, says Sameer Parekh

Radio Frequency Identification has become a buzzword amongst Indian software companies and most are gearing up to tap this market. R&D teams have been constituted to study the subject and to develop solutions for the global market as RFID as a concept is yet to catch on in India. Attempts are being made to increase awareness in India to highlight RFID’s benefits. Nascent market with tremendous potential The RFID market is still in a nascent stage but industry sources say that Wal-Mart and the US Department of Defence’s (DoD) mandate will drive the RFID market in a big way in 2004. Wal-Mart has asked 138 of its retail suppliers to be RFID-enabled at the case- and pallet- (racks or the wooden platform on which cases are stacked) level by January 2005. Similarly, the US DoD has asked all its suppliers to be RFID-enabled by January 2005. DoD is piloting RFID—all defence supplies to recent conflicts areas in Iraq and Afghanistan were RFID-enabled. Industry sources expect that the top hundred suppliers meeting Wal-Mart’s mandate will spend $2 billion. Assuming an initial spend of about $8 million by around a hundred Wal-Mart suppliers of which about 50 percent would be the cost of software integration, we arrive at a figure of $400 million. Similarly, DoD has annual purchases of over $120 billion. Assuming around $20 million spend per DoD supplier that’s a potential market of $1.4 billion. As these are the two biggest announcements in this space, the overall market for software services built around RFID technology is $1.8 billion in 2004. Indian labs for RFID research Many Indian IT companies have ventured into the RFID space by setting up R&D teams and labs. Patni Computer Systems set up an RFID lab eight months back. The lab is manned by supply-chain and RFID consultants and it has already delivered an RFID pilot based on Auto-ID’s RFID framework (Auto-ID or automatic ID was an initiative taken up by the Massachusetts Institute of Technology) that integrates into a SAP back-end for processing transactions. Dilip Dhanuka, general manager, Patni Computer Systems says, “Customers use our RFID lab to understand the impact of RFID on their business processes, to develop a prototype or to simply enhance their understanding of the areas of their business that can make use of this technology.” Wipro Technologies is setting up a lab dedicated to RFID technology. The company plans to experiment with RFID within its Electronic City campus in Bangalore. Mani Subramaniam principal consultant, Retail & CPG at Wipro Technologies says, “We have plans to RFID-enable our campus apparel store to showcase RFID and its role in the store of the future.” Wipro Technologies has tied up with US-based OATSystems to work on developing a framework that will help customers meet Wal-Mart’s standards. Infosys Technologies is contemplating a pilot within its campus to implement RFID for a better understanding of the technology. Retail to drive RFID, others verticals will pick up RFID in the retail segment, with item-level tagging of data, is expected to result in shorter queues and smoother replenishment of stock. This will ensure the quality of perishable goods, allow customised offers and promotional schemes too would be easier for retailers to implement. Dhanuka says, “Retailers will be able to make major gains in terms of product visibility, in the back rooms and on the shelf, freeing up personnel from tracking and ensuring item availability, giving them time to interact with customers. This often takes up to 70 percent of their time.” With access to real-time Point-of-Sale (PoS) data, retailers will be able to plan replenishments better and help manufacturers improve demand planning. Real-time PoS data will inform retailers as to what’s selling and what is not. The next wave After retail it will be the turn of manufacturing, distribution, logistics and security to adopt RFID. Organisations in these verticals have started piloting the technology. Dhanuka adds, “RFID can streamline just-in-time Kanban, Six Sigma and lean manufacturing strategies by tracking information at a granular level. It can ensure verification and validation of processes as well as compliance with standards and regulations in manufacturing. The technology helps improve visibility and control over raw material and critical components, leading to better synchronisation between demand and supply.” RFID’s potential in logistics is huge. It can help improve asset tracking, leading to optimum asset inventory levels, in turn reducing waiting time. It can beef up security and authentication procedures for containers and help generate audit trails of efficient shipment routes. Similarly, in the pharmaceutical sector RFID can improve raw material tracking for the manufacturing audit trail, in batch tracking and control and in product tracking for high-value or regulated drugs. Yet to reach critical mass RFID technology is at the pilot stage in most organisations even in the US and Europe. Subramaniam says, “The benefits of RFID pilot projects will start surfacing only in 2008-09. Adoption will be slow in India as the retail sector is not organised and RFID requires an organised retail sector to be successful.” Many are also sceptical about privacy issues. Sameer Parekh, managing director, Intellicon says, “RFID is still in a nascent stage and standards are being set up. It can constitute a breach of privacy as anyone having a tag reader, authorised or not, can track an object or a person wearing an RFID tag.”

The high price of RFID tags and readers is a stumbling block too. U B Praveen Rao, senior vice-president, retail distribution and consumer packaged goods, Infosys Technologies says, “A tag is priced at 10-20 cents and a reader at $500 on an average.. Mass usage will bring down the cost of readers and tags in the next two years. Besides, some RFID readers today cannot read through metal and liquids.”

Mani Subramaniam says the benefits of RFID pilot projects will start surfacing only in 2008-09; adoption will be slow in India as the retail sector is not organised and RFID requires an organised retail sector to be successful

Siddhartha Mukherjee, vice president and head retail practice, Cognizant Technology Solutions says, “RFID standards are quite fragmented. There a debate on the level of frequency bands to be adopted and there is no standardisation in the information stored in RFID tags. It has been observed in pilots that the accuracy of tag readers has been less than 80 percent, with misreads and redundant reads being an issue. Making the tags more robust and improving read efficiencies without impacting cost will be a major challenge for tag manufacturers.”

Companies are conducting seminars to spread awareness about RFID. There’s no doubt that this is a significant opportunity for India Software Inc.. and some of the biggest software exporters are already in the race, looking at RFID as a means to provide additional value to their clients in retail. Over time, as RFID usage spreads to other verticals, knowledge of this technology and experience in executing projects in this space will become a necessity for Indian software houses.

RFID initiatives from India Software Inc
Company	Initiative
Patni Computer	Systems Patni's Lab has delivered an RFID pilot that integrates with a SAP back-end for processing transactions. It has successfully delivered a complete Animal Tracking System for an overseas customer to track farm animals.
Wipro Technologies	It has been associated with the Auto-ID lab at MIT for the last two years. Wipro Technologies is among the first Indian companies to become a member of the Electronic Product Code (EPC), a unit of the Uniform Code Council that oversees the development of standards behind the development of RFID in retail and consumer product goods. It is setting up a lab to study RFID and plans to try out the technology in its Electronic City campus at Bangalore. The company is working on a pilot project with a UK-based retail company and is talking to three other customers in the US and Europe.
Infosys Technologies	One of the founding members of EPC. It undertakes consulting on areas where clients can effectively implement RFID. Infy is working with a US-based logistics player in the RFID space.
Intellicon	Intellicon sells retail solutions from Tag Master, Zebra and MIRC in India. It worked on a pilot project for BEL Bangalore in the RFID space three years ago where tags were installed on employee buses. Buses inside the BEL campus were tracked with the aim of gauging employee punctuality.

RFID applications and frequencies used
Frequency range of a tag	Used for
125-135 kHz	Animal tracking and keeping a track over beer kegs.
13.56 MHz	Library automation
862 to 928 MHz	Retail stores.
2.45 GHz	Vehicle tracking over toll bridges.

abhinav@expresscomputeronline.com