RFID Talk Blog

Amazon deal emphasizes importance of logistics technology

With all the emphasis on RFID in retail, it’s easy to forget that the retail RFID movement began as a supply chain initiative. That famous “Walmart mandate” from 2003 was an indication that the giant retailer saw big gains to be had in its supply chain and distribution center operations.

It took a few years to realize that the real sweet spot for retail is at the store level, where reduced out-of-stocks and increased revenues drive most item level retail deployments. And while retail rollouts are sexy and claim most of the headlines these days, logistics is still a hotbed for technology, including RFID.

One of the line of Kiva automated robots

Look no further than this week’s announcement that online behemoth Amazon is acquiring material handling and logistics technology firm Kiva Systems for $775 million. A customer of Kiva, Amazon decided it was a worthwhile investment to just spend three-quarters of a billion dollars on the developer of robots used to automate distribution centers.

“Amazon is a retail company and they must have done a thorough cost benefit analysis to determine that these robots make warehouses more efficient,” says Sanjay Sarma, one of the founders of the MIT Auto-ID Center, and recently named chairman of the EPCglobal Board of Governors. “The point is that logistics is a place where we leak money. We absolutely leak money, and RFID’s contribution there can be huge.”

“Amazon has long used automation in its fulfillment centers, and Kiva’s technology is another way to improve productivity by bringing the products directly to employees to pick, pack and stow,” Dave Clark, Amazon vice president of global customer fulfillment, said in a statement.

The purchase is a sure sign that despite the focus on the retail floor, retailers are still pursuing improvements throughout the supply chain. After all, RFID in retail won’t work unless items are tagged at the source of manufacture, which requires an RFID-enabled supply chain. So work progresses in logistics and supply chain apps, just at a quieter pace.

Evidence of that can be seen in today’s announcement from Omni-ID that it is unveiling a new family of products designed specifically for attaching to, or embedding into tools and other equipment to enable inventory tracking, location monitoring, foreign object detection and maintenance tracking.

“For a number of years, we’ve been working with customers in the manufacturing, logistics and industrial assets industries and have seen the broader need for a better way to track tools for maintenance compliance, inventory management and foreign object detection really emerge,” said George E. Daddis, Jr., PhD, CEO of Omni-ID.

Click here to view RFID 24-7’s coverage of RFID and the supply chain and logistics.

 

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