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Low-Cost RFID Smart Labels

International Markets & Opportunities in Europe & North America

Publication Date   January 2007
Publisher   Vandagraf
Product Type   Report
Pages   300
ISBN Number   not applicable
Product Code   VAN001
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Summary


This structured, easy to navigate report covers all the key aspects of RFID Labels Markets & Opportunities.

Who should buy this report

  • Label printer converters,
  • packaging converters,
  • labelstock laminators,
  • RFID inlay suppliers,
  • ink & adhesive suppliers,
  • RFID label converting equipment builders,
  • brand owners,
  • RFID label software providers,
  • systems integrators,
  • financial institutions and potential investors.

    The principal author, James Bevan, has some 25 years professional experience in the packaging / labels/ logistics sector, during 20 years of which, he has been actively engaged in international consultancy projects. He has a number of years experience, researching, analysing and writing techno-economic reports, continuing to building on skills learned with the Battelle Institute in Geneva during the early 1980s.

    We, at Vandagraf International, have been tracking the progress of low-cost RFID smart labels for over 5 years and have dedicated the past 12 months to studying the world of RFID in depth, attending a series of major European RFID related conferences during this period. In this way it has been possible to piece together a balanced picture of the state of the low-cost RFID smart labels business today and to build a clear grasp of the future potential for low-cost RFID smart labels.

    Amidst the hype, there are now exceptional opportunities to be exploited in the low-cost RFID smart labels market - This has been a number of years in coming, But the market for low-cost smart RFID labels is now poised to achieve dynamic double digit growth.

    The collective will of the large major players (on both the supply and demand side) in this industry is now robust and still gathering momentum.

    Low-cost RFID smart labels are set to revolutionise the world’s supply chains over the next decade. The advantages are compelling and include the following:

    • RFID labels operate by wireless radio and do not require direct line of sight, which can be a major plus (and in some situations a potential minus). Bar codes are read optically and do require direct line of sight.
    • RFID labels can store an identifier number in a silicon chip. Billions of different unique numbers are possible, so that RFID labels have the potential to identify very many individual items. Bar codes can generally only identify a type of product (a single stock keeping unit SKU with a unique bar code number will describe all products of that type.
    • The entire data capture process can be automated so that human error may be eliminated.
    • The data captured has the potential to be networked across entire supply chains in ‘real time’.

    While a significant disadvantage is the cost of RFID labelling:

  • Although the incremental cost of printing a bar code may be close to zero, an RFID label has a measurable unit cost
  • Roll-out of RFID label technology will continue to require major investments in readers and other equipment and software.

    • On balance, the advantages are going to outweigh the disadvantages and the potential financial rewards are there for the taking, as some major retailers have already been discovering.

    The tipping point for widespread adoption of RFID labelling will occur some time in the not-too-distant future.

    Content


    Executive Summary

      • 1 Forward
      • 2 Background
      • 3 Defining the scope of the report
      • 4 Low-cost RFID smart labels (silicon chip-based, chipless)
      • 5 Cost aspects
      • 6 The Self-adhesive label as a carrier of choice for RFID inlays
      • 7 Label types
      • 8 Self-adhesive RFID labels
      • 9 World markets for all types of labels
      • 10 The role of label printer / converters
      • 11 The potential advantages / disadvantages of low-cost RFID smart labels
      • 12 Demand side drivers
      • 13 Mandates to suppliers by retailers and the US DoD
      • 14 Supply side - Manufacture of RFID labels
      • 15 Barriers to progress
      • 16 Standards & frequency issues
      • 17 Europe versus North America – Rate of RFID Label adoption
      • 18 Priority Benefits for RFID Labels for Different End-user Sectors
      • 19 Forecasts for Worldwide Markets for Low-cost RFID Smart Labels by Value and by Volume – 2005 to 2015.

    Introduction – Low-Cost Rfid Labels

    • 1 RFID An introduction
      • 1.1 RFID Defined
      • 1.2 Background
      • 1.3 Historical Timeline – RFID Technology
      • 1.4 Markets for Auto-ID Technologies
      • 1.5 Low-Cost RFID Smart Labels Versus Bar Codes
    • 2 Types of RFID Label
      • 2.1 2 Major Frequency Ranges - Low-cost RFID Smart Labels
      • 2.2 EPC UHF Low-cost RFID Smart Labels - 900 (868 – 915) MHz
      • 2.3 The Need for ‘Flat Response’ UHF Gen 2 RFID Antennae / Inlays for Global Operability
      • 2.4 Case Study - Omron Introduces New Gen 2 RFID Inlays
      • 2.5 HF Low-cost RFID Smart Labels - 13.56 MHz
      • 2.6 Main Characteristics of HF Versus UHF Low-cost RFID Tags / Labels
      • 2.7 Product Offerings – Components Versus Finished Labels
    • 3 Low-cost RFID Label Types & Form Factors
      • 3.1 Pallet / Case Level VIP RFID Labels
      • 3.2 Prime Item Level RFID labels
      • 3.3 RFID Labels with Innovative Constructions
        • 3.3.1 Flag Tag – Rafsec / Sato
        • 3.3.2 Space Tag – Paxar
        • 3.3.3 RFID Enabled Hang-Tags / Swing-Tickets
        • 3.3.4 Tubular Woven Labels
    • 4 RFID Label Printing and Over-printing
      • 4.1 Background to RFID Label Printing
      • 4.2 Printing Process Options:
      • 4.3 Annual Sales of Narrow Web Roll Label Presses – Evolution of Market Share
      • 4.4 RFID Enabled Desktop Label Printers Printers & Printer / Applicators
    • 5 The Basics of RFID Inlay / Label Manufacture
      • 5.1 Low-Cost RFID Smart Inlay Construction
      • 5.2 Strap Attachments (Fixing Silicon Chips to Antennae)
      • 5.3 RFID Label Laminate Construction - Triple layer & Dual layer
      • 5.4 Creating an RFID Smart Labelstock
    • 6 Driving Down Unit Cost of RFID Labels
      • 6.1 Printed RFID Antennae
      • 6.2 Chipless and other Related RFID Technologies
        • 6.2.1 Chipless RFID Technology – Inkode Corporation
        • 6.2.2 Chipless RFID Concept - Scientific Generics Flying Null Magnetic Bar Code
        • 6.2.3 Chipless RFID Technology - Surface acoustic wave (SAW)

    Part A - End-Users

    • 1. Retailers – Low-Cost RFID Smart Labels
      • 1.1 The World’s Leading Retailers
      • 1.2 RFID Labels in the Retail Chain
      • 1.3 Retailing of Fast Moving Consumer Goods (FMCGs) - Supermarkets / Hypermarkets
        • 1.3.1 Low-Cost RFID Smart Labels in Retailing
        • 1.3.2 Retailer Low-cost RFID Smart Label Pilots – Historical Time-Line
        • 1.3.3 RFID Labels in Supermarkets / Hypermarkets
        • 1.3.4 Case Study Wal-Mart, US - The First Retailer to Mandate Low-cost RFID Smart Labels
        • 1.3.5 Case Study ‘Future Store Initiative’ - Metro Group, D
        • 1.3.6 Case Study Tesco plc, UK - An Early Adopter of RFID Labels in Europe with 2 RFID Projects - Secure Supply Chain Program for Pallets / Cases – DVDs at Item Level on Smart Shelves
        • 1.3.7 Case Study Retailer European Adoption Programme (EAP)
      • 1.4 Retailing of Clothing (incl. Sportswear and Footwear)
        • 1.4.1 The World Market for Retail Clothing (incl. Sportswear and Footwear)
        • 1.4.2 Out-of-stocks (OOSs) - A Major Concern for Clothing Retailers
        • 1.4.3 RFID Labels for Retail Clothing
        • 1.4.4 Case Study - Marks & Spencer (M&S) - Two Separate RFID Pilots and Rollouts (Item Level – Clothing / Fruit – Returnable Packaging)
        • 1.4.5 Case Study - Metro Group - Kaufhof Warenhaus AG and Fashion Company Gerry Weber International AG
        • 1.4.6 Case Study - Benetton – Item Level Clothing RFID Label / Tag Pilot Halted Due to Privacy Concerns
        • 1.4.7 Case Study - Prada Fashion – An Innovative Early Experiement with RFID Technology at Item Level in a Clothng Retail Setting
      • 1.5 Retailing of Consumer Electronics
        • 1.5.1 Digital Televisions & DVD Players
        • 1.5.2 DeskTop, LapTop Computer Hardware & Consumables
        • 1.5.3 Mobile Cellphones
        • 1.5.4 Retail Trends for Interactive Video Games
        • 1.5.5 RFID Labelling – Consumer Electronics - Potential Financial Benefits for Manufacturers and Retailers
        • 1.5.6 Cost Aspects - Consumer Electronics - RFID Adoption
        • 1.5.7 Case Study – Best Buy - US Mass Merchandise Retailer of Consumer Electronics Products
      • 1.6 Early Versus Late Adoption – RFID Technology in Retailing
    • 2 Brand Owners - Low Cost Passive RFID Labels
      • 2.1 The World’s Leading Brand Owners – FMCGs (Fast Moving Consumer Goods)
      • 2.2 Leading Brand Owners - Early Involvement in RFID Labelling - The Auto-ID Center
      • 2.3 ‘Slap & Ship’ - A Minimal Approach to RFID Labelling has been used by Some Brand Owners
      • 2.4 Challenging Physics of RFID Labelling Leads Major Brand Owners to Rethink the Design of their Product Packaging
      • 2.5 Brand Owners - Fast Moving Consumer Goods (FMCGs)
        • 2.5.1 Case Study - Gillette - Shaving Products
        • 2.5.2 Case Study - Nestle Deutschland - RFID Labels for Food Products
        • 2.5.3 Case Study - Unilever Germany - RFID Labels for Home & Personal Care Products
        • 2.5.4 Case Study - Kimberly Clark, US - Paper Products
      • 2.6 Brand Owners - Clothing (incl. Sportswear and Footwear)
        • 2.6.1 Case Study – Lemmi Fashion, D
        • 2.6.2 Case Study – Levi Jeans – RFID Labels for Item Level RFID Tagging / Labelling of Clothing in Mexico and the US
        • 2.6.3 Case Study - VF Corp - RFID Labels for Item Level RFID Tagging / Labelling of Clothing
      • 2.7 Brand Owners - Consumer Electronics
        • 2.7.1 Case Study - Hewlett Packard (HP), US
      • 2.8 Early Versus Late Adoption – Pros & Cons
    • 3 Pharmaceuticals and Healthcare Products - Low Cost Passive RFID Labels
      • 3.1 Overview of the Pharmaceuticals and Healthcare Sectors
        • 3.1.1 The World’s Leading Brand Owners – Pharmaceuticals and Healthcare Products
        • 3.1.2 The Market and Growth Opportunities - Pharmaceuticals and Healthcare Products
        • 3.1.3 Future Trends in Pharmaceuticals and Opportunities in RFID Labelling
      • 3.2 RFID in the Pharmaceuticals and Healthcare Sectors
        • 3.2.1 Adoption of Low-Cost RFID Smart Labelling - Pharmaceuticals and Healthcare Products
        • 3.2.2 Potential Benefits of RFID in the Pharmaceuticals and Healthcare Sectors
        • 3.2.3 Forecast Time-scales for RFID in the Pharmaceuticals and Healthcare Sectors
        • 3.2.4 Case Study - Astra Zeneca, UK – An Early Adopter of Chipless RFID Labels - Recognition Feature / Electronic Handshake
        • 3.2.5 No Single Standard Frequency in Sight for Item Level RFID Labelling of Pharmaceuticals Products - UHF versus HF
        • 3.2.6 Case Study - Pfizer / Viagra – HF RFID Labelling at Item Level
        • 3.2.7 Case Study - Purdue Pharma / OxyContin – Item Level UHF RFID Labelling
        • 3.2.8 Case Study - Cardinal Health – Pilot Completed in 2006 - UHF RFID Labels at Pallet, Case and Item Level
        • 3.2.9 Case Study - GlaxoSmithKline (GSK) Tests RFID on HIV Pharmaceutical Product - HF RFID Labels at Item Level
        • 3.2.10 Profile - Aegate Project – Authentication at the Point of Dispensing
        • 3.2.11 Profile - CVS/pharmacy Inc. – US based Pharmaceuticals Retailer - Smart Shelf Pilot
      • 3.3 Track and Trace - Audit Trail and Pedigree - RFID Labelling - Pharmaceuticals and Healthcare Products
        • 3.3.2 Pedigree Laws – How they work - Flow of Data and Accountability
        • 3.3.3 Electronic versus Paper-Based Pedigree Systems
        • 3.3.4 Pedigree Laws for Pharmaceuticals – The US Food & Drug Administration (FDA)
        • 3.3.5 Pedigree Laws for Pharmaceuticals – Individual US States
        • 3.3.6 European Pedigree Regulations for Pharmaceuticals will Come
      • 3.37 Case Study - Cap Gemini Drug Security Network (DSN) Lab - To Facilitate Implementation of electronic pedigrees
        • 3.3.8 EPCglobal Ratifies E-Pedigree Standard
    • 4 Military Applications – Low-Cost RFID Smart Labels
      • 4.1 World Armed Forces & Defense Spending
        • 4.1.1 National Armed Forces around the World – Number of Personnel
        • 4.1.2 Armed Forces for the leading European EU member countries
        • 4.1.3 Defense Spending in Selected Countries
      • 4.2 US Armed Forces
        • 4.2.1 US Department of Defense (DoD) / Defense Logistics Agency (DLA)
        • 4.2.2 Case Study - RFID in the First Gulf War in 1991
        • 4.2.3 Case Study - RFID in Iraq – New and Repaired Parts – Sense & Respond Logistics
        • 4.2.4 DoD / DLA and RFID – Active RFID Technology
        • 4.2.5 The Linking of Active and Passive RFID tags / labels through the DoD / DLA Supply Chain
        • 4.2.6 US DoD / DLA – The Introduction of Passive RFID Labelling Technology
        • 4.2.7 DoD / DLA Supplier Implementation Plan & Guidelines
        • 4.2.8 DoD / DLA Supplier Implementation Plan
        • 4.2.9 Updated Mil Standard for Package Labelling
        • 4.2.10 The US DoD / DLA Approach to their Respective Suppliers Differs from that of Major Retailers
        • 4.2.11 Key Differences between DoD / DLA and Retailers
        • 4.2.12 Overcoming Initial Difficulties with Implementation
        • 4.2.13 Case Study – Read-rates – Ramstein Air Force Base in Germany
        • 4.2.14 Case Study - Lockheed Martin
        • 4.2.15 Case Study – Savi Technology, US – SmartChain Consignment Management Solution (CMS)
        • 4.2.16 Case Study - Avery Dennison Wins DoD / DLA Purchase Agreements
      • 4.3 The Wider Impact of the DoD / DLA Mandates - Beyond the US
        • 4.3.1 NATO (North Atlantic Treaty Organisation)
        • 4.3.2 NATO - Low-cost RFID Technology – Roll-out is Starting
        • 4.3.3 Case Study - Syscan International’s newly developed ICE (Intelligent Communication Enabled) network technology.
    • 5 Third Party Logistics Operators – Low-Cost RFID Smart Labels
      • 5.1 Logistics Sector – Evolution of Industry Structure
        • 5.1.1 Different Types of Third Party Logistics Operators
        • 5.1.2 Trend to consolidation in the Third Party Logistics Operator Sector
        • 5.1.3 Leading Air Express Cargo Companies (DHL, Fedex, UPS)
        • 5.1.4 Case Study - Kuehne-Nagel (K+N) – World No 1 in arranging seaborne cargo
        • 5.1.5 The World’s Leading Third Party Logistics Operators - Contract Logistics
        • 5.1.6 Large-scale Highly Automated Retailer Distribution Centres
        • 5.1.7 Profile Tesco Frozen Crick Project – Third Party Logistics Contractor Exel
      • 5.2 Low-Cost RFID Smart Labels – Third Party Logistics Operators
        • 5.2.1 Low-Cost RFID Smart Labelling in a Warehouse Environment
        • 5.2.2 RFID Labelling & Warehouse Management Systems (WMS)
        • 5.2.3 Enhancing the Services That an RFID Enabled Third Party Operator Can Offer Customers
        • 5.2.4 Third Party Operators can also Obtain Internal Benefits from RFID
        • 5.2.5 Requirements for Different Types of RFID across a Complex International Supply Chain
        • 5.2.6 DHL - 3 Distinct Areas of RFID implementation: Fashion Logistics, Retailer Metro Group project, Postal services
        • 5.2.7 UPS (United Parcel Services) – A Pro-active Investor in RFID Technology
        • 5.2.8 Case Study Deutsche Post Corporate Security – RFID Enabled Tamper-evident Packaging
        • 5.2.9 Case Study Metro Group - Future Store - Product Flow System
        • 5.2.10 Formation of the EPCglobal Logistics and Transportation Group

    Part B Drivers & Barriers

    • 1 Background – Drivers & Barriers
      • 1.1 Drivers & Barriers - Low-cost RFID Smart Labels
      • 1.2 Unit Price Falling by end 2005 - Low-cost RFID Smart Labels
    • 2 Key Triggers / Benefits / Regional Focus - The Low-Cost Passive RFID label Revolution
      • 2.1 Key Triggers by End-user Sector
      • 2.2 Key Benefits for End-Users (Retailers, Brand Owners, Pharmaceuticals, Military, Third Party Logistics Operators)
      • 2.3 Retailer Primary Aims and Focus by Region (Europe versus North America)
      • 2.4 Distribution and Retail – Business Practices in Europe and North America
    • 3 European Retail and Branded Products Industry Focus
      • 3.1 Reduction of OOS (Out-of-Stocks) / Increased Product Availability and Other Secondary Benefits - A Key Benefit for Retailers
      • 3.2 Primary Benefit of Low-cost RFID Smart Labels for Retailers - OOS (out-of-stocks)
      • 3.3 Reduction of OOS (Out-of-Stocks) / Increased Product Availability and Other Secondary Benefits
      • 3.4 Traditional Approach to Re-stocking Retail Shelves
      • 3.5 The Low-cost RFID Smart Label Way of re-stocking Retail Shelves - Practical Benefits of Low cost RFID Labels
      • 3.6 RFID Labelling of Returnable Packaging Units in Retailing (eg: Plastic Trays)
      • 3.7 OOS (Out-of Stocks) – Industry Average Levels
      • 3.8 Case Study - Wal-Mart Has Achieved Early Success with Low-Cost Smart RFID Labels achieving 16% reduction in OOS (out-of-stocks) in 2005
      • 3.9 Limited Duration Special Promotions - The ‘Bullwhip Effect’ – Amplification of Stock Level Fluctuations Along Supply Chains
      • 3.10 Case Study – Procter & Gamble (P&G) – Joint Venture to Improve Supply Chain Visibility and Replenishment Performance
      • 3.11 The Benefits Stack - The Impact of Widespread Usage of RFID Smart Labels for Retail Products will be Far Reaching
      • 3.12 The Virtuous Circle of Potential Benefits for Retailers
      • 3.13 Mandates to Suppliers by Retailers
    • 4 Product Related Crime / Counterfeiting / Brand Protection
      • 4.1 Background to Brand Protection Issues
      • 4.2 Variations on the Theme of Counterfeiting
      • 4.3 Worldwide Losses from Product Related Crime from 2000 to 2002 with Forecasts to 2010
      • 4.4 The Pharmaceutical Sector is at Particular Risk in Relation to Product Related Crime
      • 4.5 The Urgent Need for Brand Protection in the Pharmaceuticals & Healthcare Sectors
      • 4.6 Pharmaceutical Packaging – Security Features
      • 4.7 The Increasing Role for RFID Labelling in the Fight against Counterfeiting
    • 5 The Need for Global Standards – Radio Frequency & Power Aspects
      • 5.1 A Summary of the Full Radio Frequency Spectrum
      • 5.2 Frequency Bands Reserved for Non-Label RFID Applications
      • 5.3 The Two Dominant Frequency Ranges for RFID Labels – UHF versus HF
      • 5.4 Developments in Global Standards for RFID Labels
      • 5.5 Towards Global Usage of UHF RFID Labels - Regional Differences in Usable Frequency Ranges for UHF RFID Labels
      • 5.6 European versus US RFID Regulations
        • 5.6.1 The EU and RFID Labels
        • 5.6.2 The Dense Reader Issue / Listen-Before-Talk – EU Regulations
    • 6 Consumer Privacy - A Key Issue for Consumers
      • 6.1 Background to the Consumer Privacy Furore – RFID Labelling
      • 6.2 History of RFID and Consumer Privacy
      • 6.3 Consumer Privacy Related Regulatory Actions
      • 6.4 Case Study - Marks & Spencer (M&S) – Addressing Consumer Privacy Concerns – Item Level RFID Labelling of Clothing
      • 6.5 Case Study - The Aegate Approach - A Pro-active ‘Privacy Code of Conduct’

    Part C - Forecasts

      • 1 Low-Cost RFID Smart Labels - Very High Growth Potential is Leading to Major Market Opportunities
      • 2 Value Growth Forecasts - RFID Markets by Region - Low-Cost RFID Smart Labels - 2005 to 2015
      • 3 Volume Growth Forecasts - RFID Markets (Global, Europe & North America, Low-Cost RFID Smart Labels) - 2005 to 2015
      • 4 Volume Growth Forecasts - Pallet / Shipping Case / Item Level - 2005 to 2015
      • 5 Volume Growth Forecasts - Breakdown by End-User Sector (Retail Supply Chain, Pharmaceuticals, Military, Third Party Logistics Operators, Non-Label RFID Tags) - 2005 to 2015
      • 6 Volume Growth Forecasts - Silicon Chip-Based RFID Labels versus Chipless RFID Technologies - 2005 to 2015
      • 7 Value Growth Forecasts - Components of the Low-Cost RFID Smart Label Market (Labels, Readers and other Hardware, Software, Integration Services) - 2005 to 2015

    Appendices

      • I EPCglobal Tag Classes
      • II The Auto-ID Center and the EPCglobal GS1 (Global Standard) Organisation
      • III The EPCglobal Network
      • IV Important Advantages Come with the New Gen2 RFID Standard
      • V Status of Industry Standards - ISO / IEC
      • VI Issues around Intellectual Property Rights and Patents
      • VII Historical Evolution of Bar codes
      • VIII Types of Linear Bar code
      • IX EAS – Electronic Article Surveillance (Anti-Theft) Tag / Labels – Binary On / Off – Not RFID
      • X Towards Global Harmonisation for UHF RFID

    Glossary Of Terms

    Acknowledgements