JP Mishra, Country Manager – India, Newland AIDC in an interaction with Industry Outlook shares his views on how the RFID market is evolving in India, the various challenges faced by enterprises in implementing RFID in supply chain management, and more.
The global RFID market is anticipated to reach USD 31.5 billion by 2031, growing at a CAGR of 10.2 per cent until 2031. How do you see this market evolving in India? What are the major factors driving the growth of this market?
While the global RFID market is growing, the Indian market size was valued at 523 billion in 2022 and it is projected to approximately reach to around close to 1800 million, by the end of 2030. Therefore, the growth from 2021 to 2030 is approximately 14.1 CAGR. I can observe the difference in the growth in this industry after being in the AIDC industry for almost a decade. There is substantial growth, and the demand for RFID now is really high.
The major factors driving the growth of this market include the initiatives taken by the government to boost RFID-based solutions in various industries. For instance, in the tollgates, all the cars have come with FASTag stickers and this is where the RFID is being implemented to a larger extent. And secondly, several industries are implementing Industry 4.0 or smart manufacturing systems, and these are driving the RFID market growth in the country.
Restricted visibility along with inaccuracies can completely halt production and limit a company’s overall efficiency. One solution that gained momentum several years ago is RFID and while some people today may argue that with the large expansion of IoT integrations, RFID is now outdated or archaic in some way. What is your opinion about this?
RFID is not outdated, rather it is a future technology that is evolving with new features. Earlier in the track and trace industry, the adoption of barcodes was very less. Companies started using barcode readers and barcode labels in their products for better tracking, and traceability. Since RFID at that point in time was highly expensive the adoption of RFID was not as expected but it was slow. However, today with new kinds of advancements in technology in the RFID sector, it is one of the biggest players in the AIDC industry. AIDC stands for Automatic Identifications and Data Capturing. This is used wherever traceability is required.
When implementing RFID in supply chain management, what are some common challenges that organizations face?
Supply chain management depends on a few factors. It is based on the industry, for instance, in an industry such as the e-commerce and logistics industry, or the retail industry, the industries rendering services to other companies are reluctant to use RFID devices, and RFID technology owing to its cost. This is because firstly in E-commerce, the margin for the supply chain is very less. Furthermore, if they are going to implement RFID on all products which is much costlier than the traditional barcode labels, it will increase the cost. Therefore, this is one of the major challenges faced by companies in implementing RFID technology.
Another major challenge is in choosing the right solution provider who would help in implementing the RFID technology efficiently. The third challenge is that RFID does not apply to all kinds of applications. Therefore, it is important to choose the right application that would help in utilizing the various benefits of the technology.
The most common RFID application is for tracking and management. This includes inventory management, asset tracking, cargo and supply chain logistics, and vehicle tracking. Please elaborate on how RFID can be used in the supply chain for improved visibility and distribution.
There are various types of tracking methodologies that are being implemented in RFID technology. For instance, RFID is helpful in asset tracking. Now let us take an example of a company that is adopting an asset tracking system with RFID technology. The company can implement RFID tags on all its assets. There are two different kinds of assets that include movable products and the other is your fixed products. When it comes to fixed assets, we can easily track all the material with a single-handed RFID reader. However, for the movable product, we can tag all our movable assets such as laptops or phones, etc. So, when the movable products are moving inside the company, they can be easily tracked within the company's premises and this would help in knowing which products are being moved within the company premises and what products are being moved outside the premises.
Secondly, in the warehouse management process, when any pick-to-light process is carried out, the most common technology that is being implemented is the RFID technology. Here with the implementation of RFID technology, there will not be many errors and most often there are no errors. Therefore, it helps in obtaining better traceability in supply chain warehouse management. The other industries where RFID is implemented are cargo tracing and Garment industries.
What are some future trends in the supply chain industry, and how can the suppliers and traders stay ahead of the curve in this area?
The future supply chain trend as I mentioned earlier, are divided into different industries, for example, there are industries where the cost is viable single costs. There are several industries where tracking is really important and it is carried out in a better way with the help of RFID technology. So, the future for RFID technology is bright as people today have started understanding the real need for RFID technology. Because when it comes to barcode technology, for instance, when you are adding a barcode label on a product, it includes a process where a user has to scan it manually. Also, in warehouses or manufacturing facilities, you have to assign one specific user who should scan every product manually. However, this is not the case when implementing RFID. Users need not scan all the products one by one. The products can either be scanned automatically through the fixed RFID device or with the help of a hand-held RFID device as well. Also, the product can be identified or read from a distance. Therefore, there are huge opportunities for RFID not just in the supply chain industries but also in the retail and garment industries as well.