Understanding the Whole Solution

By Ann Grackin

July 3, 2006—ChainLink Research has been researching the RFID market for several years, focusing on user needs and adoption. What has become obvious along the way is that a company's knowledge of the technology often does not match the needs and opportunities RFID can provide in terms of transforming its processes and business.

In addition, some vendors' knowledge is very limited to their particular product segment. Naturally, they will communicate to the customer the value of their solutions, but those products may miss the mark of what the customer actually needs. In addition, users are selecting technology without much understanding of what we call the "whole solution." In order to have a healthy market, these mistakes need to be avoided.



RFID, the Whole Solution
It may seem obvious to avid readers of RFID Journal, but for many firms, the concept that RFID is a gateway between the sensory or physical world (RFID and related technologies such as sensors, GPS and wireless) and the digital world (IT systems, better known as software) is not well understood. The majority of users are basing their purchases on the perception that RFID is a bar code on steroids. In other words, they see it as being a process of the past. This is typical as new technologies emerge. The full import of what these technologies can really do takes time to understand—and by then, it seems so obvious.

So how can companies prevent these buying mistakes?

The RFID Supply Chain

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RFID's Supply Chain
RFID devices, like most electronics, are manufactured across a chain of value-adding steps. Depending on your company (whether an RFID technology provider or end user)—even if you are buying directly from a label converter, printer company or consultant—you need to know what is required at each stage to meet your business requirements.

Generally, at the right end of the chain, you will work with a converter or a distributor of auto-identification solutions. However, this is not always the case. Many end-user firms need highly customized solutions due to the nature of their product, its packaging, the environment in which it operates in and the solutions it offers. Thus, you might find yourself buying from or partnering with the upstream side of the RFID supply chain.

If you think about the "charter" of RFID use—sensing, identifying and communicating information—you can understand the rich market of players presently offering RFID solutions. We like to use the term primary positioning, since many players operate in a variety of solutions areas.