Due to an ever vigilant eye cast toward the bottom line, manufacturers of all shapes and sizes probably aren’t all that enamored with investing in too much IT these days; unless, of course, the investment creates new efficiencies. RFID is one such technology that has been perpetually touted as the next “killer app” for manufacturers due to the robust visibility and security it offers. New research and success stories indicate that many of these RFID claims are true.

Manufacturing.net has a couple of good articles on the subject. The first one discusses the business case for RFID, while the second dispels myths behind the sometimes controversial technology.

A Frost & Sullivan report is highlighted in the first article, which basically states the obvious: “The use of Radio Frequency Identification in manufacturing can boost productivity and increase revenue, and is emerging as a favorable solution for security issues throughout the supply chain.”

More interesting, the report states that the European RFID markets for automotive, aerospace and industrial manufacturing generated revenue of $23.7 million in 2005, and estimates are gauged at $109.3 million in 2012 — not a lot of money in the grand scheme of things but a sizeable jump, nonetheless.

Speaking of money, the study was unable to determine a specific return on investment from RFID implementation, since RFID benefits depend on its level of integration, according to Manufacturing.net. “Over-optimistic or unclear objectives for implementing RFID are likely to have a negative impact on ROI and deter wider adoption,” said Frost & Sullivan Research Analyst Rengarajan Srinivasan. “New entrants are likely to have a better understanding of the nature of ROI that is practically achievable from the experience of early adopters and increasing numbers of credible pilot schemes.”

In addition to a lack of credible ROI, a lack of standards and compatibility issues with existing IT systems are also giving many manufacturers cold feet. That’s the big idea behind the second Manufacturing.net article, “RFID Myth-Busting,” which briefly outlines the progress made in RFID standards over the past several years, such as a defined protocol between the four frequency bands of RFID: low-frequency, high-frequency, ultra-high frequency and the microwave frequency band.

“What the industry needs now are application notes, guidelines and best business practices to show potential users the value of RFID and what it has to offer,” said Dan Mullen, president of AIM Global, the Association for Automatic Identification and Mobility. “A manufacturer can use bar coding, mobile computing, wireless communication devices, and RFID in a plant environment. If a manufacturer is currently using a bar code system, they do not have to rip-out that system and replace it with RFID technology, unless that is the best decision for cost benefits and efficiency.”

In addition, Mullen contends that due to the reusability factor of RFID tags — data on them can essentially be erased and used repeatedly — means a manufacturer can recover the cost of installing an RFID system. That’s probably a big reason why both the Department of Defense (DoD) and Dairy Farmers of America (DFA) are, ahem, milking RFID for all its worth.

Meanwhile, Materials Handling reports that DoD Defense Distribution Centers (DDC) successfully deployed an extensive RFID network across 69 facilities on 19 locations across 11 states in less than 130 days. Here’s an excerpt:

DDC is leveraging RFID and wide-area workflow capabilities to create enhanced visibility of the location and movement of global military assets. As the prime contractor, ODIN technologies conducted detailed site assessments, selected equipment, installed and tested the RFID portals to 100 percent accuracy before they were formally accepted by the Government.

Another seeming success comes via this announcement, which says Dairy Farmers of America (DFA) has successfully deployed and integrated an RFID solution. DFA comprises more than 20,000 family-owned dairy farms in 49 states. DFA markets 34 percent of U.S. milk production, supplying cheese, butter and other dairy products through brands such as Borden and Keller’s Creamery. Here’s how the DFA solution plays out:

The system greatly reduces operating costs compared to traditional slap and ship solutions, as Josh Drake, RFID Systems Engineer, explains. “Once you get it set up and calibrated, it keeps on rolling. We’ve had no hardware downtime since the equipment was deployed in late 2005. The system is very easy for line operators to use and requires minimal training. To start a tagging job, the operator accesses the…system from their PC using a web interface, enters the product number and production order number, and clicks Start.”

So there you have it. A handful of solid examples that RFID is still making in-roads in the manufacturing community. Does it make sense for your operation?