RFID Enables Industrie 4.0

For a number of years, ARC has conducted research in the area of RFID. The first studies were published in the early 2000s.  The technology itself is significantly older, it has been around for decades. At the turn of the millennium, the technology gained greater interest in the industry for use in product tracking.

RFID

Florian Güldner, Director of Research at ARC Advisory Group

Specifically, it was Walmart that was pursuing the technology as an evolutionary step to manage inventory throughout the entire supply chain. However, the interest subsided until the 2010’s, when RFID technology was reignited by the fervor of Industrie 4.0 and the rise of IIoT in manufacturing.  As a result, we forecast a double-digit growth in terms of units for RFID in manufacturing.  RFID was identified as enabling technology towards achieving the goals set out by Industrie 4.0/IIoT.  Over the years, companies developed further applications for RFID in manufacturing and identified the technology as a key driver and enabler for their business.

In 2017 the market grew at almost double digit and we expect the growth in 2018 to be even higher.  While Western Europe and Japan already have a good installed based of RFID readers and the markets are mature, North America and China are now catching up. While North America has a good RFID penetration in the supply chain and logistics area, the usage in manufacturing is still behind Western Europe.

Next to the adoption of RFID for basic manufacturing applications, including track & trace, product and material flow, intralogistics, asset management, etc. there are new applications rising, which promise to push the market further.  These include IP protection, smart maintenance, or even RFID used within sensing solutions .  This also means that there is a deeper integration into ERP, MES, PAM, and the control layer.  RFID turns out to become a more generic technology and suppliers and users are just starting to unlock the complete potential.

Top players in the market are Balluff, Omron, Pepperl+Fuchs, Sick, Siemens, and Zebra Technologies (alphabetical order).  But there are also a handful of smaller players, which often serve only as component suppliers, but are highly specialized. Examples include OmniID, Smartrac, or Xerafy, just to name a few.  We expect the number of players stay constant or even increase.  Technical barriers are low and application know-how becomes more important, so new companies from other areas may step in.

Overall, the RFID in Manufacturing market is facing interesting times.

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