A new study by the Rolling Meadows, IL-based Fibre Box Association indicates that radio frequency identification (RFID) implementation, using today's high-cost, low-reliability tags, will add significant cost to corrugated boxmaking operations. And at present, the operational benefits of RFID implementation on the box operators will not offset these costs.

The study, commissioned by the FBA's RFID Task Group, is intended to help corrugated-packaging suppliers understand and plan for the future as partners in the supply chain. The study evaluates the impact that RFID deployment will have on corrugated box suppliers over the next three years and beyond. Operational problems (e.g. removing boxes with defective tags) and capital improvements required for in-line tag application also were identified.

The RFID Task Group recognized that studies had already been done examining the impact of RFID on other portions of the supply chain, specifically retailers and consumer-goods firms, but no work had been published regarding the impact on packaging suppliers. FBA commissioned Forrester Consulting to conduct a study from July to September 2004. Forrester created a costs/benefits model and supporting report for a fictional, yet representative US corrugated box manufacturer. The scope of the study was limited to the converting operation.

Focused on make-to-order corrugated boxes, modelers defined requirements and costs for in-line tagging on flexo folder/gluers and specialty folder/gluers, as well as a representative company's operations and RFID approach. The model was then used to detail the potential RFID benefits in corrugated box production and distribution, quantify the incremental capital expenses and overall annual costs, and compute net benefits/costs on a three-year basis.

The summary report and model are available to FBA member companies. More info: 847/364-9600, www.fibrebox.org