Survey shows RFID adoption slow in public sector
Although plenty has been written on the benefits of radio frequency identification (RFID), its adoption into the marketplace has been somewhat slow, a trend reflected in a survey of RFID adoption in the public sector purchasing profession. Preliminary results of the survey indicate that about 9 percent of public sector organizations are currently using RFID, and another 19 percent are considering its adoption and implementation. Most respondents (42 percent) agreed that current RFID technology is still in the introduction phase of the product lifecycle. RFID technology involves transmission of radio signals from tags attached to products and is useful for enterprise supply chain management to improve the efficiency of inventory tracking and management. The survey also showed a majority of respondents (55 percent) believe their organizations are laggards with regard to RFID adoption.
The National Institute of Governmental Purchasing, Inc. (NIGP) conducted the study to provide a detailed picture of the current state of RFID adoption and to identify key market trends, systems’ requirements and expenditures. The study examines the differences across three groups (current users, those considering adoption and those neither adopting nor considering adoption). Study findings indicate significant differences among the three groups.
Demographics and study findings
Reflecting the views of 219 respondents, the study showed:
The impetus for the vast majority of RFID initiatives comes from within the organization itself: Of those using RFID, 70 percent report the initiative to adopt came from within, while 90 percent of those considering RFID adoption report the initiative came from within.
Of those using RFID or considering RFID adoption, 43 percent report they use or would use a combination of active and passive tags, with 28 percent reporting they are only using or considering active tags and 22 percent only using or considering passive tags. Active RFID tags contain a battery to transmit signals autonomously; passive RFID tags have no battery and require an external source to provoke signal transmission.
Both current users (34 percent) and potential adopters (23 percent) agree that difficulty in incorporating the new technology into their existing infrastructure is a challenge to implementation. Identifying an RFID tag system (11percent and 26 percent, respectively) and cost (20 percent and 23 percent, respectively) were also reported as implementation challenges.
The majority of respondents (60 percent) work in organizations with yearly revenues/budgets of approximately $10 million to $100 million, while 26 percent work in organizations with less than $10 million in yearly revenues/budgets. Fourteen percent work for larger organizations with revenues/budgets greater than $100 million.
Managerial implications
The study also suggests that those currently using RFID within their organizations consider it a mainstream technology to a much higher degree than do non-users/non-adopters (specifically, a 4.75 average rating vs. a 3.94 average rating for users and non-users/non-adopters, respectively, on a 7-point scale). This result should be expected since the vast majority of those who have adopted RFID did so under their own initiative and should report RFID as a mainstream technology.
However, those currently using RFID do not feel the same way about RFID being a “core technology critical to [their] organization’s future success.” Current users rated RFID as being a core technology at 3.6 on a 7-point scale, while non-users/non-adopters gave a rating much lower (2.85 on a 7-point scale). This result was somewhat expected once the opinions regarding the position of RFID within the product lifecycle were revealed. In other words, most respondents believe RFID is still in its introductory phases and, therefore, are doubtful of its efficacy as a core technology critical to their organization’s future success.
When asked about management and employee acceptance of RFID technology, users and non-users/non-adopters varied greatly in their feelings. Users rated top management acceptance much higher than non-users/non-adopters (4.55 vs. 3.05 on a 7-point scale) when it came to RFID technology. Following this theme, users rated frontline employee acceptance of RFID technology higher than non-users/non-adopters (4.15 vs. 3.03 on a 7-point scale). Potential adopters tended to respond in the same manner as non-users/non-adopters on both top management and frontline employee acceptance. These results indicate that current users believe a major hurdle has been overcome regarding RFID: management buy-in. However, top management as well as frontline employee buy-in appears to be an impediment for those who have not adopted yet or are not considering adoption.
NIGP conducted the study in collaboration with John F. Kros, Ph.D., Associate Professor; S. Scott Nadler, Ph.D., Assistant Professor; and Haozhe Chen, Ph.D., Assistant Professor; all from Marketing and Supply Chain Management at East Carolina University, Greenville, N.C. Of 2,360 email invitations sent to NIGP agency member representatives, there were 219 usable survey responses, for a 9.3 percent response rate.