Should companies invest in RFID? Is it dead?
Why is Wal-Mart quietly back tracking on their initially aggressive RFID initiative.
Many technologies become over-hyped. Service providers and consultants are tempted to proclaim they can solve virtually any problem with the latest and greatest technology. Within the supply chain world no technology capability has been more hyped in the last ten years than RFID. But as with many technologies that do not live up to the hype, companies become dismissive of the potential benefits the technology could provide.
RFID undoubtedly can provide tangible value to companies….when they deploy it correctly, for the right reasons.
Ad hoc projects of limited scope, done at the bleeding edge, provide little or no benefit. A recent study by four university professors entitled “Empirical Evidence of RFID Impacts of Supply Chain Performance” found that for an organization to realize significant value from RFID the technology needed to be deployed across the entire business operations or supply chain. Even deploying RFID throughout your company may not deliver significant net value unless you are working closely with your extended supply chain (suppliers, manufacturers, logistics service providers, etc.). To remain competitive companies are required to collaborate and work more closely with their supply chain partners. This will be a pre-requisite for companies looking to really leverage the value of RFID (in a non-closed loop scenario).
It is important that you consider the complete spectrum of data capture and communication options. There are different technologies for data capture and transmission e.g. pen and paper, kanbans and barcodes. Many companies have advanced to: two-dimensional barcodes, multi-part barcodes, voice technology, etc. Is RFID (passive or active) the right data capture and communication solution to make a difference for you throughout the touch points of your extended supply chain?
One reason RFID’s will continue to drive business process enhancement is that the cost of the underlying technology is rapdily becoming much cheaper – due to both new production technology and higher volumes of RFID tags produced. In addition there have been several advancements in reading the RFID tags which in some cases have dramatically lowered the hardware costs as well as the underlying costs and performance of wireless networks, servers, mobile devices etc and dot net middleware to reduce the cost of turning the RFID data into a meaningful set of transactions for an erp system.
