RFID Demands a Measured Response

By Oliver Hedgepeth

Apr. 10, 2006—A bar code can add value to a product when recorded as a product count, usually as a single custody event, at a single location, isolated in time. An RFID tag can add value to that product by describing its chain of custody from birth up to the current point in time, and maybe even forward to the next product disposition event. With bar codes, you think about what to count; with RFID, you think about how much more to count. And for any technology, the first step in this thinking process of defining a new metric, or measure of performance, is to understand clearly the functions the technology performs.

A bar code label may display only a product's invoice number, whereas an RFID tag can tell the story of where that product was born, where it has been and where it is going, and it may also contain an alert notice of when to drop the product's retail price. During the RFID Academic Convocation hosted by MIT on Jan. 23-24, 2006, the need to start analyzing the assumptions about current and new metrics was discussed, if not all too briefly, by a few attendees in response to repeated questioning.


Some attendees indicated RFID would change nothing about the units currently used to measure supply chain performance, such as weeks or months of inventory held in a warehouse, the number of days customers must wait for product to arrive, or the days or weeks required to process product requisitions. Others described RFID as just the latest technology that would fade from memory in three or four years.

In the 1960s, similar statements had been made about the impact of computer usage, at a time when decision-making started to shift from using a computer as a high-speed calculator to using it as a tool that could model manufacturing processes, examine complex weapon system metrics, and give recommendations on which truck or weapon to purchase. What changed from the 1960s to the 1980s were some of the old metrical units of weeks and months. The previous units defined a perceived need for computers to simply summarize logistics supplies in a warehouse. Today, however, units such as nanoseconds are the movers of global wealth.

The metaphors and paradigms describing the changes technology brings to our data and information-demanding society seem to shift first, before the metrics and their units shift, when a new technology enters the business stream. Do you remember the record player? It's been replaced by the compact disc (CD) player. Revolutions per minute (RPM) is a term the music industry once used while producing analog vinyl records; recordings, now digital, are measured in kilobits per second. Just as the automobile used to be called the horseless carriage, so is RFID now being hailed as wireless bar codes.

Presently, we measure inventory in units of months or days, not hours, minutes or seconds. RFID usage could change that, depending on how retail stores use the technology. The stage is set for RFID to shift some metrics, refining the units of measurement as companies modify some of their operations to add RFID, replace bar codes, redefine the workspace and workers' functions, and update their computer middleware and product communications protocols.