Apple brought near-field communication (NFC) technology into the spotlight with the release of the iPhone 6. Equipped with NFC, the new phone allows users to make "tap-to-pay" retail purchases. While it's still early, the technology, according to industrial tech experts, has potential applications in discrete manufacturing, process industries, and transportation and logistics, too.
NFC, built on radio-frequency identification (RFID) technology, has the ability to communicate at fast rates with high reliability at short ranges, typically up to 10 cm. NFC chips, called tags, embedded in devices can function actively or passively and transmit and store data. The most common NFC configuration, now found in retail environments, is an embedded sensor communicating with a low-power active reader in a mobile device.
Hubert Selvanathan, principal at Waterstone Management Group, an advisory firm focused on serving the technology sector, sees some good business cases for NFC in industry. "NFC delivers on the value proposition of RFID but with additional capabilities that allow it to be extended for other uses," he said, noting potential asset-tracking applications in supply chain management, logistics, and MRO (maintenance, repair and operations).
However, he cautioned that "adoption of these applications in the industrial and manufacturing sector is very early stage." Said Selvanathan. "We are aware of a handful of conversations. Companies are not even at the pilot stage yet."
Aida Paola Conti, an analyst in the industrial automation and process control practice at Mountainview, Calif.-based research firm Frost & Sullivan, agrees that industrial applications of NFC are preliminary but promising. Conti told ThomasNet News that because manufacturing firms want better resource utilization and lower performance variability, they are "driving ubiquitous connectivity and connected efficiencies from previously disconnected assets and systems."
Conti thinks NFC could be the next natural progression of machine-to-machine communications. Since two NFC-enabled devices can communicate and exchange data with each other, specific business process execution algorithms could be assigned and the devices can "work dynamically based on the data exchanged."
Most of current news around NFC relates to mobile payments, where the wireless technology is being used at retail points-of-sale (POS) for touch-and-go data exchange between mobile phones and payment systems. In fact, nearly all late-model smartphones are equipped with NFC technology; it's just the chip might not be necessarily activated. NFC-based mass-transit ticketing systems are being rolled out in some markets.
A new study from Albany, N.Y.-based Transparency Market Research predicts that the market for NFC technology will grow at a whopping 43.7 percent compound annual growth rate, increasing from $1.7 billion in 2012 to $20 billion in 2018. In its market assessment, Transparency accounts for NFC readers, tags, secure elements, and controller chips. NFC readers should grab most revenue share, the analyst reports, with the adoption of NFC in smartphones as the key growth driver.
In the longer term, though, NFC technology could become a ubiquitous enabler in wireless communications, allowing machines and devices to be connected anywhere and anytime. NFC's interoperability with RFID makes it particularly useful and positions it well for market adoption. The technology can function at low or zero power -- which means no battery is needed, lowering operational costs and adding to its appeal for designers of devices and systems. This is one of the competitive advantages of NFC over other wireless communication options, such as Wi-Fi, ZigBee, and Bluetooth.
Applications of NFC in logistics and supply chain management are starting to appear. For example, Los Angeles logistics company Rehrig Pacific recently announced that it is offering NFC-enabled case-level packaging and recycling systems. So far, Rehrig Pacific is billing its offering as a system that increases a brand's engagement with the retail consumer. However, it's worth noting that Rehrig Pacific is also in the business of offering asset-tracking systems and services, so it seems likely that it will expand NFC offerings into the larger supply chain management space as opportunities arise.
Frost & Sullivan sees NFC as part of a larger ecosystem of technologies contributing to smart manufacturing. This emerging progression, the analyst says in a report on the Internet of Things (IoT) and smart manufacturing, will be profoundly affected by a greater presence of mobility in discrete manufacturing and process industries. NFC and RFID are keys to applications in such areas as product location tracking, asset control, and automated machine diagnosis.
Netherlands-based manufacturer NXP Semiconductors is one company that thinks NFC can brighten smart manufacturing. NFC tags are highly configurable, essentially giving a product a "smart memory" that can be updated and added to as a product goes through the factory, the warehouse, the distribution chain and into the hands of the end-user. A tag's memory can assist in post-sale processes such as customer support, return logistics and end-of-life disposal and recycling. In other words, NFC allows each product to document its own history throughout its life cycle.
Such capability is one of the values NFC can deliver to the maintenance function, Selvanathan said. "Companies spend a significant amount of labor, money, and time maintaining equipment, but historically that has been a very manual process." This is because, often, field service personnel don't have information about the specifications and maintenance history of a given piece of equipment, making the service task difficult and time-consuming. "The maintenance folks already carry smartphones, and by having NFC tags or labels affixed to the equipment, they could pull up the equipment maintenance history."
Other use cases for NFC, said Selvanathan, include inventory and asset management, as well as automating the tracking of work orders. He cautioned, however, that manufacturers will have to evaluate such use cases in terms of feasibility and cost-benefit before deploying NFC in their operations. "It's very early-stage," he said, "but the opportunity is there."