New BT unit taps up RFID market

As more companies begin to disclose details of internal trials of radio frequency ID tags, BT has launched a new business group to focus on helping businesses with RFID projects.

silicon.com's sister site ZDNet UK has learnt that the group, known as BT Auto-ID services, will work with other BT business units such as the IT services group Syntegra to steer companies through RFID trials and implementations.

Speaking to ZDNet UK on Tuesday at the second annual RFID ROI Forum in London, Geoffrey Barraclough, head of the new department, explained that BT has been investigating the potential of RFID for around ten years and likened its network of tags and receivers to a "telephone exchange".

He said he currently has around 12 staff but the organisation is looking to recruit more in the near future. BT Auto-ID will offer four basic services for companies planning an RFID implementation: a starter pack for evaluation support; yard management tools to automate the management and identification of trucks; an asset manager; and a supply chain event manager.

The launch of the new unit is the latest sign that momentum behind RFID is growing. It comes in the same week that Microsoft, IBM and Phillips have announced partnerships and new products around the technology. Meanwhile, Labour MP Tom Watson is planning an adjournment debate on the issue in Parliament this week while the National Consumer Council will hold the first summit on its impact in two weeks' time.

Despite the potential improvements to supply chains and logistics promised by RFID, the technology is still immature and there are issues such as costs and standards that must be solved before it becomes more pervasive, said Barraclough.

Geoffrey O'Neil, director of strategic projects for Woolworths UK, also speaking at the two-day event in London's Excel conference centre, said there needs to be international cooperation on RFID standards for the technology to be a real success. "We need cooperation on a global basis. We don't want different flavours of RFID developing in clusters around the world," he said.

O'Neil added that most companies were also overlooking some important issues surrounding the cost of RFID projects and claimed that integration with enterprise applications and logistics infrastructure was the real problem. "A lot of people seem to be focused on the cost of tags but I am far more interested in the costs of integration," he said.

RFID cannot be considered in isolation but should be seen as part of a whole stock management system comprising elements including bar codes, GPRS tracking of vehicles and supply-chain management software, said O'Neil. "RFID won't produce benefits on its own; it has to be part of a whole strategy."

Robert Brescia, Michelin VP of logistics, also speaking at the conference, said that as part of an ongoing RFID trial the tyre manufacturer had seen savings of around 10 to 20 cents per unit. He explained that as tyres are traditionally dealt with as single items when it comes to loading and unloading, RFID technology could really benefit his company.

"If anyone is set to benefit from RFID it's the tyre industry. All of our tyres are offloaded individually, which means we have our share of logistics problems," he said.

But Brescia added that the manufacturer was still waiting for the right moment before deploying the technology wholesale across its business. "We are assembling a business case to strike when the momentum is right." According to Brescia, RFID has the potential to revolutionise the way tyres are identified. This is currently done with labels, which "consumers hate because it takes about 50 miles for the residue left by the sticker to wear off".

Woolworths has been trialling RFID for more than two years, initially as part of a Home Office project but more recently internally to investigate the benefits of using the technology in the supply chain between its distribution centres and stores, said O'Neil.

Another stumbling block companies encounter with RFID projects is the huge amounts of data generated, warned BT's Barraclough. He said some businesses are investigating intelligent agent technology to analyse the information harvested from chip-tracking systems. "This [RFID] will fail if it generates more information today then people can cope with. No one is going to implement a new WAN simply to cope with RFID data," he said.

Other solutions to the RFID information overload issue include the increasing use of the Multi Protocol Label Switching (MPLS) industry standard protocol, which prioritises the distribution of packets across a network, he added.

When questioned on whether there were any applications for RFID as a part of BT's recent £2.7bn contract to help modernise the NHS, Barraclough claimed the technology had the potential to improve the way blood supplies are managed.

"Blood is going to be huge. RFID has the potential to automate the way data on blood supplies is managed and speed up the whole inventory process," he said.

Andrew Donoghue writes for ZDNet UK