RFID: profit or loss?
RFID (Radio Frequency Identification) is not new and yet it is a major talking point today. But why the hype? Well – the costs are dropping and technology has moved on to take advantage of the benefits. This excitement is not irrational even if the figures quoted are all conflicting. There seems to be a consensus that the revenues will be huge and that RFID will change everyone’s life.
But care is needed to ensure that the ever increasing complicated laws are adhered to. Robert Bond a Partner in Faegre & Benson and a specialist in intellectual property fires a few warning shots about the Data Protection Act.
In the following pages leading companies involved in RFID explain just why they are working so hard to take advantage of this technology and give case studies to show their early successes.
However much of the current hype tends to be focused on the retail sector but in my view this is misguided. RFID is bigger than this.
Putting in a RFID system raises many considerations that are greater than just the project.
Does the coding system conform to the standards that are being laid down at present? Who and what is the Halifax based government backed trade association AIM UK?
However my concern is just how companies will evaluate the financial benefits for an investment in RFID and get the authority to invest in the technology.
A generation ago I was the Finance Director of a high security lock manufacturer when bar coding was coming in. No-one could show me the benefits of spending money on the project except that it was useful at the point of sale.
I then heard of several companies that had invested in bar coding and were having a torrid time with several false starts.
I was convinced that my view to delay bar coding was correct.
How wrong I was!
Looking back today with the benefit of hindsight I can see the lost opportunities in manufacturing and stock control that bar coding offered. Had our suppliers used bar codes just how we could have simplified goods inwards and the accuracy of adjusting stock records. But nobody told me!
Return on investment
Moving to RFID I can see the huge benefits to any organisation but I wonder if the return on investment will be relayed through to the finance area. Will the project get the support of the “bean counter”?
From the consultants view over the past years I have seen companies struggle with plans and the implementation of new systems. Some had not even designed a project and had flown into new areas because it was the thing to do. Others had bought software and then decided to make it work. Some even thought that the problems of their business were unique. They were not! So why re-invent the wheel?
Technicians who are probably quite correct in their technical aspirations do not even set out a SWOT analysis of the project or it’s ROI. They will moan that it always comes down to money!
If what I read is true that Wal-Mart has insisted that their top suppliers must use RFID in the supply chain within 90 days, it seems inevitable that some of these suppliers will fail.
Just what can go wrong and at what cost?
What is needed is a benchmark to help others. So to this end I wonder if there is a company that is about to start on an RFID project that would be brave enough to let David, Martin or me to sit in on their project plans. Is there anyone bold enough for us to report on the progress of their project (warts and all)? We would not be there to interfere or to give advice and confidential information would remain just that.
But it would give the chance for our readers to learn about the problems and ensure that their own projects are planned and implemented properly.
If there is such a company then please email me at firstname.lastname@example.org in the first instance.
Roger Lewis, FCMA FCIM DipM MCMI, is a specialist in company acquisitions disposals, recovery and strategic planning.
Martin Banks Co-editor of Application Development Advisor is an award winning journalist and trainer in IT and state of the art technology for 36 years.
David Norfolk, BSc, MBCS, CITP, CEng, CNE Co-editor of Application Development Advisor. Executive Editor IT Policies and Procedures.