Checkpoint and Philips announce RFID joint venture

Within the scope of the agreement, Checkpoint Systems Europe will be building and integrating applications and solutions for the retail industry and its supply chain based on Philips HF and UHF RFID chip solutions including EPC. In addition to collaborating on tags and readers, the two companies will deliver system integration services that address the specific needs of retailers seeking to adopt RFID in their supply chains.

"Philips is forging this alliance because we believe Checkpoint is uniquely positioned in the retail sector,"​ said Christophe Duverne, vice president marketing and sales for the identification business at Philips Semiconductors. "RFID brings tremendous opportunities for value creation, in particular to the retail sector and this partnership will focus on capturing these opportunities."​

Albert Roger, vice president and general manager RFID Checkpoint Systems Europe said: "Checkpoint has recently deployed RFID solutions based on Philips RFID chips in more than 12 in-store and supply chain applications thus far in 2004. Our plans for additional turn-key and custom applications, to be launched throughout the year, will continue to take advantage of Philips significant research, development and manufacturing capabilities as a leader in the RFID industry."​

In addition, Checkpoint and Philips will combine their expertise and development efforts resulting in synergies that could lead to a significant lowering of the cost of RFID tags in the foreseeable future through some of the most advanced RFID tag manufacturing techniques and processes.

Through Checkpoint Systems CheckNet Services, which comprise Checkpoints tag, label and service bureau solutions, companies will now have a phased and easy to integrate approach to RFID implementation. By leveraging Checkpoint Systems retail market leadership with Philips expertise and technology strengths, both companies will gain greater scope, interaction and feedback from current and potential retail supply chain customers.

Checkpoint Systems​ is an international company that specialises in product identification and shrink management solutions for the retail industry and its supply chain. Checkpoints solutions provide its customers greater efficiencies from the point of manufacture to the point of sale and improve the consumer shopping experience.

Royal Philips​ Electronics of the Netherlands is one of the worlds biggest electronics companies and Europe's largest, with sales of €29 billion in 2003. Its 164,500 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, semiconductors, and medical systems.

RFID is fast becoming the de facto technology for ensuring speed, efficiency and reliability of data in the supply chain. As a result, full-scale implementation of RFID will be made available to the large number of retailers and suppliers whose objective is to meet industry mandate deadlines, some of which are set for 2005. The two companies are already working together on several projects in the European retail industry, including the Metro Group in Germany.

Other RFID-based partnerships include the alliance between Sun Microsystems and Capgemini. Both firms recently launched a jointly-developed Radio Frequency Identification (RFID) solution to enable packaged goods companies to comply with RFID mandates issued by a growing number of leading retailers.

Both Sun and Capgemini claim that the RFID solution is unique because it has been designed from the ground up to optimise the full supply chain. The solution addresses business justification and supply chain modelling, as well as expertise in the application landscape at both the enterprise and middleware levels.

Stringent legislation, consumer concerns about food safety and growing pressure from retailers have forced food manufacturers to look at every possible means of ensuring traceability and efficiency throughout the supply chain. RFID is increasingly being seen as the most viable solution. The importance of the concept is that it recognises the interconnectness of the food industry. It suggests that that closer collaboration between every aspect of the food supply chain is inevitable.

Legislation has been a significant driver. The recent US Bioterrorism Act and forthcoming EU legislation on traceability have added to the pressure on manufacturers to get their house in order and be able to trace products right through the chain. The problem traditionally has been a lack of investment in the food production sector.

This is now beginning to happen on the manufacturing side, through tracking and tracing and through closer collaboration with retailers. Industry experts believe that over the next few years, manufacturers will have achieved significantly tighter control over their processing and packaging operations.

Ultimately, it is in the manufacturer's long-term interest to invest in a system that can trace and organise operations from start to finish. The cost of compensation or a product recall means that the cost of installing an RFID system is less of a factor than it ever was.