Last week, IBM released a new business event processing software application that it says will help companies do more with data collected via barcodes, RFID tags, and other wireless sensors.
But in order for customers to take advantage of the new software, they will need to have a substantial RFID and wireless sensor infrastructure already in place – or be prepared to make a significant RFID investments to create one.
Called WebSphere Sensor Events, the software is intended as an "on-ramp" for bringing real-world events into the virtual IT world, according to Scott Burroughs, a software strategist for IBM who worked on developing the new application.
"You're collecting data in the real world -- you're in a factory, in a warehouse – places that are not IT-focused," Burroughs said. "You need to get that data into an environment that makes it useful…. This is a platform for extracting the important actual event data for analysis."
Once the data is integrated into an IT environment, WebSphere Sensor Events analyzes the data and can trigger automated business processes or alerts to workers, he said. It can help manufacturers, retailers and others track and manage supply chains and inventory, as well as comply with industry or government regulations. Business intelligence software can also analyze aggregate RFID data to spot larger supply chain trends or inefficiencies, he added.
That scenario assumes, however, that the company in question already has invested in RFID tags for tracking the location of its crates and in wireless sensors on its loading dock that monitor temperature. Investing in such RFID and wireless sensor technology can cost tens of thousands of dollars, if not more, and could require a significant reorganization of a company's physical infrastructure.
While there are no definitive numbers regarding industry adoption of RFID technology, Gartner estimates that total spending on RFID will increase from $1.2 billion in 2008 to $3.5 billion by 2012, indicating that there are still substantial numbers of companies and industries that have yet to make the investment.
Further, much of the RFID adoption that has occurred was spurred several years ago by requirements from Wal-Mart and the Department of Defense that all their suppliers do so. Since then, "this uptake was swiftly followed by a delay in sales and in further adoption," according to Gartner.
IBM, for one, thinks the investment is worthwhile for most companies, as does Michael Liard, RFID practice director at ABI Research in Oyster Bay, N.Y. Liard said that while the upfront costs of RFID and similar technology can be substantial, companies should consider the inefficiencies and waste such technology can eliminate.
"You can't just look at it as a price tag," Liard said. "You've got to look at it like what types of business problems are being solved and what value propositions are being brought into the enterprise by leveraging these sensor-based technologies."
Software like WebSphere Sensor Events further enhances the value of RFID investments, he said. Where early adopters used RFID tags and other wireless sensor technology mainly to increase supply chain visibility and determine the location of items, companies can now use analytics software to leverage that data to better understand and improve their business processes.
Liard also predicts adoption will continue to rise as RFID and wireless sensor technology has use cases in virtually every industry, from energy and pharmaceutical companies to consumer packaged goods and even fashion retailers.
One company that has invested in RFID technology and plans to use WebSphere Sensor Events in the coming months is Golden State Medical Supply. The Valencia, Calif.-based company prepackages third-party pharmaceuticals, in part to reduce pharmacist errors.
The company recently completed equipping all its prepackaged bottles with RFID tags and plans to use the IBM software to track the product all the way through the supply chain, according to CEO Jim Stroud. He said Golden State made the move in part to comply with California state regulations but also in hopes of providing the data to customers who want to know where their medications came from.
For the company to realize its goal of a complete view into its products supply chain lifecycle, however, the pharmaceutical companies whose products Golden State prepackages will also have to adopt RFID technology, a step most have not yet taken, Stroud said.
"It's been a slow process to get going," he said. "We have to find customers that actually have the RFID technology on their end to read the data. And we haven't really been able to do that successfully yet. We know it's being worked on, though."