An emerging technology that uses radio tags to track shipments has found new takers: government-run postal and railway services.
Coming on the heels of pilot projects run by local retail chains, the adoption of RFID (short for radio frequency identification) systems by the Indian Railways and India Post is expected to give a fillip to the technology this year.
RFID systems use microchip-enabled tags that transmit high-frequency radio signals, making it easy to track them compared with older systems that use bar-code stickers and readers. Wal-Mart, the world’s largest retailer, has been driving the adoption of RFID by its suppliers.
The Indian Railways and India Post plan to deploy RFID for tracking the movement of goods as they seek to reduce operational costs and become more competitive.
The railways have already invested Rs2 crore in ‘tagging’ 1,000 wagons. If satisfied, the railway ministry may invest up to Rs250 crore in putting RFID systems on all its wagons, a senior executive at the Centre for Railway Information Systems said on condition of anonymity. The railways run over 2.16 lakh wagons carrying more than a million tonnes of freight a day.
“About 60,000 sacks of mails move across our centres in the country and there’s no way we can track them manually,” said Faizur Rehman, a senior India Post official. The department plans to kick-start a pilot project later this month for its Speedpost service between Mumbai and Delhi. If successful, India Post may invest close to Rs100 crore on RFID.
According to tech industry insiders, the Indian Army has just finished a pilot that involved 1,000 RFID tags to manage its top-secret documents.
With such big potential customers, experts predict 2007 will be the year radio-tagging takes off in India. “With Wal-Mart entering India, RFID will definitely gain momentum in the retail segment,” said Dennis Fuchsof German RFID tag- maker Feig Electronic.
Dropping costs have also helped. Prices for each radio tag have halved to Rs35. Some private firms such as Bangalore’s Madura Garments have already seen the benefits of RFID. The apparels company reduced its inventory time to 60 hours, a fifth of what it took earlier, when it ran a pilot with 3,700 cartons between its factory and warehouse.