Radio Frequency Identification (RFID) is opening up ample opportunities for the pharmaceutical industry to reduce inventory cost, protect the supply chain against counterfeits and prevent variation during product manufacture. But the reality is that the penetration of RFID in the pharma space is limited because of its prohibitive costs, technical challenges and lack of trained manpower to handle the technology. The key issue is the poor return on investment (ROI), which is deterring companies from adopting the technology. Yet, companies are extremely receptive to this technology and are willing to experiment it, said Narasimha Subramanian, managing director, Essae Technologys Pvt. Ltd, in an e-mail interview with Nandita Vijay. Excerpts:
How far RFID has penetrated into the Indian pharma industry?
At this time, most of the companies are either at pilot or drawing board level as the ROI is still an area of concern. There are various applications talked about for RFID use but no visible commercial success is seen in this arena.
How receptive are companies to this technology and what is the kind of investments to be made by them?
Companies are extremely receptive to this technology, due to the hype created and willing to experiment it. Everything stops once the ROI is not in line with the application, where they intend to use this technology. Investments depend on the application, range and the level of automation required by the client.
What are the emerging trends in RFID?
The products have started emerging with extremely high good read rates in the market. The new Gen II standard is paving the way for standardization of products and interoperability of products similar to the barcodes. New trends in RFID tags enable to work with metal and liquids. Today, metal and liquids are two big enemies for RF technology and solutions are emerging to overcome such difficulties.
What are the challenges faced by companies that offer RFID?
Standards are still evolving and the products are expected to adhere to these standards. Changes are taking place at a rapid pace and obsolescence is high due to the rapid changes in standards. The challenges faced by the companies and suppliers are to keep up with the rapid changes that are happening in the market space. Apart, there is a lack of technical pool with sound understanding of RF as a technology.
What according to you is the future of this technology?
The future is extremely promising and adoption by many companies would bring the product prices down, as the volumes keep pushing up. Also, this is a technology here to stay and would be as revolutionary as what internet is today.
Is there enough expertise for implementing this technology in India?
There is very limited availability of people with an expertise in RFID. Efforts must be made by the companies to train employees in this field. The companies may have to make a lot of initial investment to get the personal trained in this field.
Would you describe Essae's entry into RFID and attempts at its commercialisation?
Essae Technologys, which is a total barcode and EAS solutions provider, has been in the RFID space for some time and is exploring more opportunities in this field. For RFID, the company has printers and readers from reputed manufacturers. Essae Technologys gets printers from Zebra Technologies of USA and portable readers from Unitech of Taiwan. We have not yet commercialized the opportunity, though we have made a few sales to software developers, who utilize these products in their software developments.
What inspired the company to embark on RFID front and do you have any plans to make investments in this space?
Huge opportunity projected by various surveys and studies conducted across various vertical markets have inspired the company to try its luck in RFID front. We would start with manufacturing the RFID tags as and when the commercial equilibrium is reached. Apart, we will also explore opportunity to set up a pilot lab in our office for customers to explore the technology.
What is the kind of expertise required by companies to foray into RFID?
To market these products, companies need strong technical understanding of RF as a technology. Technical expertise of the supplier would broadly determine the success of any RFID initiative for the end user. RFID is complex, but understanding of the nuances of the technology would help smooth operation apart from solving the issues at the field level. From a customer's point of view, a strong team is required to arrive at the ROI for the application, where the technology is intended to be used. However, RFID technology cannot be used for all applications, as ROI is difficult, due to the high initial cost. There are alternative technologies that can be used in applications, where ROI is not clear for usage of RFID technology.