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Supply chain automation is a giant opportunity for Swiss RFID sector

RFID's tracking technology is proving popular on supply chains (Texas Instruments)

The radio frequency ID technology that traditionally used in cattle tracking and toll collecting applications is being increasingly used in the warehouse and loading docks.

Companies as diverse as Infineon, Volkswagen and Manor AG are now using RFID for improving supply chain automation.

Intellion AG is a spin off of the University of St Gallen and MLab, the Swiss research institute that sets standards for RFID along with MIT. It was founded to deal specifically with the demand for RFID's supply chain application.

Its CEO, Kai Millarg, says his company, established three years ago, is currently working on some very large-scale projects.

Growing demand

According to a recently published report by Venture Development Corporation (VDC), the global shipments of RFID hardware for supply chain management applications reached nearly SFr117 million ($89 million) in 2002.

It has an estimated compounded annual growth of 38% per year through to 2007.

Millarg says demand for RFID in the supply chain is driven by the realization that the technology can fix one of the weakest links in supply chain automation.

Once a manufactured item leaves the production line, it also goes "offline" onto a trolley or a pallet, box, or container on its way to distribution.

Management does not have the kind of electronic tracking and automatic tracking that it would like to have when the goods are in a box on the loading dock, he says.

The consulting firm does not just look at one link in the supply chain when doing a project, rather it "evaluates the strategic impact of RIFD on the customers' business and process".

That is the reason that Millarg says works with both the HSG, for its business process know-how, and the ETH Zurich, for technology insights.

"In some cases, you can even design new, customer driven services," says Millarg. Business is good for the three year old company. It employs eight people and is writing its balance sheet in black ink.

Other consulting firms building up know-how in this field are SAP SI and Accenture.

Total control

Supply chain applications are driving demand for a new generation of "active" RFID tags that broadcast information wirelessly.

Installed in the base of RFID tags are "passive" devices. A passive device responds only when bathed in an outside signal (inductive coupling).

Austrian RFID specialist, Identec Solutions makes such long-range devices. The company's founder and CEO, Wilhelm Gantner, says his tags and systems are typically used in tracking, and monitoring very large items.

For example, Volkswagen is using an RFID solution from his company to track and find automobiles once they leave the assembly line.

Other customers include Deutsche Post, General Electric, Caterpillar, and UPS.

Usually battery powered, the critical design feature of the silicon inside the tags is that it is a low-power design, something the Swiss chip manufacturer, EM Electronic Marin, a subsidiary of SWATCH, is good at.

EM Electronic Marin claims to be number one in delivering RFID silicon, citing the VDC study as source.

Other Swiss firms in this market include GS Automation, which makes the RFID tag handling equipment, as well as NagraID SA, Datamars in Lugano, and Legic Identsystems.

Sokymat is a global player with capacity to manufacture 200 million units per year.It designs and sells systems targeted at specific applications. Sokymat Germany, for example, is specialized on automotive applications.

Valerie Thompson

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