LONDON--(BUSINESS WIRE)--According to the latest research report released by Technavio, the global radio frequency identification (RFID) market for industrial applications is expected to grow at a CAGR of over 19% until 2020.
This report titled ‘Global RFID Market for Industrial Applications 2016-2020‘, provides an in-depth analysis of the market in terms of revenue and emerging trends. To calculate the market size, Technavio researchers have considered the revenue generated from RFID used for only manufacturing applications. The market size includes the revenue generated from licensing of software as well as shipment of RFID hardware.
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“Leading vendors such as Honeywell and Datalogic have increased their investment in the R&D of RFID devices. Datalogic spent USD 43.66 million on R&D in 2015, an increase of 34.17% when compared to USD 34.54 million in 2014. Also, many vendors are partnering with software and hardware suppliers to develop technologically advanced products,” said Sunil Kumar Singh, one of Technavio’s lead industry analysts for human machine interface (HMI) research.
“This focus on research and development has helped vendors introduce cost-effective RFIDs that are also efficient in terms of data security. Thus, with improved accuracy and reduced prices of RFID devices, its adoption among many new end-user segments is anticipated,” added Sunil.
Some of the other driving forces behind the growth of the global RFID market for industrial applications are as follows:
- Increased adoption of RFID systems for inventory management
- Use of RFID system for error reduction in data entry
- Increased need for RFID middleware
Increased adoption of RFID systems for inventory management
Inventory management is an important process that represent investments involved, from a range of activities that include manufacturing to the sale of a given product. Mismanagement of inventory can lead to significant financial loss and result in inventory glut or inventory shortage. Initially, inventory was tracked manually or through barcode systems that required many workers to manually count products. An RFID system plays a key role in inventory management. With the introduction of automatic data capture (ADC) technology such as RFID end-users are able to oversee purchase orders with an eye on the amount of stock required for the replenishment of SKUs. Data generated through RFID systems also help organizations identify customer preferences and employ discount offers and loyalty programs according to the results. These benefits associated with the adoption of RFID primarily drive this market.
Use of RFID system for error reduction in data entry
Manual data entry is time consuming and presents a high possibility of introducing errors. With the introduction of RFID and barcode systems, firms can record and recognize data entries automatically and more accurately. These systems help detect warehouse errors such as collecting the wrong goods.
In many industries such as manufacturing, logistics, and warehousing, tracking the inventory produced and moved, especially at the production stage, is crucial. A simple error can lead to financial asset losses. Rectifying such errors is time consuming. Hence, manufacturers and vendors are increasingly adopting RFID to collect information such as serial number, price, and this helps in counting digitally, thereby improving data entry and reducing financial losses.
Increased need for RFID middleware
Features of RFID middleware such as data accuracy and the acceleration of processes enable the visibility and traceability of products throughout the supply chain. Also, it increases the speed of the production processes and reduces the work-in-progress status and inventory levels for manufacturers. Thus, manufacturers deploy hardware and software-enabled RFID middleware in their RFID systems of supply chains. This in turn lowers costs and increases the time to market products.
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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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