The business model and structure of the manufacturing industry has grown well beyond the scope of a single enterprise and location, making radio frequency identification systems indispensable to its functioning, according to a new study from Frost & Sullivan.

With increasing adoption of lean manufacturing strategies pushing most manufacturers to focus on and outsource niche operations within global supply chains, RFID technology will help sustain high levels of performance, the firm says.

The study, “Analysis of the Global RFID in Manufacturing Market,” finds that the market earned revenues of $1.29 billion in 2013 and estimates this will nearly quadruple to $4.99 billion in 2020. The study covers passive, active and battery-assisted passive RFID.

RFID technologies are designed to enhance supply chain visibility and control of inventory, operations and logistics across diverse manufacturing points. The systems facilitate real-time tracking of assets in different locations, which can increase productivity and enable cost-effective allocation of resources.

These potential benefits, along with reduced labor requirements, increased accuracy of information and improved customer service, boost RFID adoption among manufacturers looking to realize higher return on investment, the report says.

“Opportunities for RFID solution providers exist across all application segments within the manufacturing industry,” Nandini Bhattacharya, Frost & Sullivan measurement and instrumentation senior research analyst, said in a statement. “Growth prospects in the automotive and aerospace manufacturing sectors are especially promising, owing to supportive industry regulations."

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