Automotive Industry Trends

Implementation in the Automotive Industry

Issue Table of Contents

Challenges Ahead for RFID An Overview of RFID in the Automotive Industry Implementation in the Automotive Industry

The automotive industry has lead the way in implementation of RFID technologies. It has had to overcome several issues to do so. Implementation entails first and foremost the willingness to change the way things are done. RFID promises great things, but it has been difficult to know if they would become real enough fast enough to justify the expense and the turmoil. Once the decision has been made, obstacles appear, including the high cost of establishing an RFID business architecture, acquiring and installing the hardware and software, initiating training and certification for employees, and, of course, the purchase of the microchips themselves.

General Motors, one of the companies on the forefront of the RFID wave, has moved forward with a number of technologies, using tags with embedded chips to track inventories, assembly devices, and other heavy equipment. GM is pressing ahead in the management of its now exponentially greater data flow, and hopes are that the company will see a 10 to 20 percent reduction in production costs as its investments in wireless technologies begin to pay off.

The applications for RFID range from supply chain management to vehicle security and beyond. Once the conversion to the new architecture is complete, managers will have access to an instantly updated at-a-glance supply chain. Work-in-process tracking is particularly amenable to RFID because the silicon chips can withstand high temperatures, shocks, and paint and don’t require line-of-sight contact with the reader. For companies relying on a just-in-time inventory management, which includes most automotive companies, this process will greatly improve efficiency and eliminate the major disruptions that can be caused by even a minor error. Another application that implies great cost savings is the ability to track parts racks and cases, some that can cost $1500 each, with many thousands shipped out each day, never to be seen again. To be able to retrieve and reuse these containers would represent a savings figure in the millions per year. RFID technology is already well established in vehicle security. Ignition key–based security systems, immobilizers that require communication between a chip in the key and a reader in the vehicle in order for the engine to start, have dramatically reduced theft. In the future, chips will report directly to a vehicle’s Telematics system, monitoring dozens of conditions, so that warnings can be sent to the driver before a problem arises.

Once the new technology’s challenges have been met, industries that took bold steps to implement it will gain significant cost-saving benefits, including reduced labor costs and reduced shrinkage due to theft, improved data availability, accuracy, and linkage, and better tracking of inventory, assets, and production processes. For many industries, it is not a question of if RFID is right for them, but how fast they can make the switch and how long it will take to see measurable rewards. As more and more companies follow the lead of automotive industry, those who hope to do business with them or compete with them will need the compatibility, agility, and assertiveness that RFID offers.

Subscribe to eNewsletter