Retail EDITOR'S NOTE
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The Obstacles to RFID Adoption
Time and secrecy about success stories are among the greatest hurdles that must be overcome in the adoption of radio frequency identification.
By Mark Roberti
July 2, 2007—People often ask me what I consider to be the biggest obstacles to adoption of radio frequency identification, specifically regarding technologies based on the Electronic Product Code (EPC). Most people would say it's the lack of a clear business case and the cost of the technology. The answer I give: "Time and secrecy."
Cost is not really an issue. No matter what a technology costs, companies will adopt it if it delivers significant benefits. The lack of a clear business case is also something of a red herring, as many large companies know there are significant benefits to be had from adopting EPC technologies in their supply chain—such as reducing out-of-stocks, increasing sales of promotional items, improving track and trace, and recalling capabilities.
Time is probably the biggest hurdle. It took some of the earliest EPC adopters three or four years to get to the point where they could achieve such benefits. They had to conduct rigorous testing to make sure the technology worked for their specific applications, and in their particular environments. They launched field trials, worked with software companies to develop or fine-tune applications, built network infrastructures to support larger rollouts and refined their business processes.
It won't take quite that long for fast followers, because the hardware and software now exist, the benefits have been proven and roadmaps are available. Consumer products goods manufacturers, for example, can read our recent cover story on how Kimberly-Clark is tracking promotional displays to learn how it can use EPC to boost its own sales of promotional items in stores (see Kimberly-Clark Gets an Early Win). And retailers can read our case study on Wal-Mart to see how it's using EPC to reduce out-of-stocks (see Wal-Mart Tackles Out-of-Stocks).
Still, even with all these advantages, fast followers will need to test tags on their products, as well as the ability to read tags consistently in their particular environments. They'll need to set up network infrastructures to handle the RFID tag data, while installing software that can leverage the data and integrate these applications with their RFID systems. Finally, they'll need to change their business processes to take advantage of the data. All of these steps take time.
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July 2, 2007—People often ask me what I consider to be the biggest obstacles to adoption of radio frequency identification, specifically regarding technologies based on the Electronic Product Code (EPC). Most people would say it's the lack of a clear business case and the cost of the technology. The answer I give: "Time and secrecy."
Cost is not really an issue. No matter what a technology costs, companies will adopt it if it delivers significant benefits. The lack of a clear business case is also something of a red herring, as many large companies know there are significant benefits to be had from adopting EPC technologies in their supply chain—such as reducing out-of-stocks, increasing sales of promotional items, improving track and trace, and recalling capabilities.
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It won't take quite that long for fast followers, because the hardware and software now exist, the benefits have been proven and roadmaps are available. Consumer products goods manufacturers, for example, can read our recent cover story on how Kimberly-Clark is tracking promotional displays to learn how it can use EPC to boost its own sales of promotional items in stores (see Kimberly-Clark Gets an Early Win). And retailers can read our case study on Wal-Mart to see how it's using EPC to reduce out-of-stocks (see Wal-Mart Tackles Out-of-Stocks).
Still, even with all these advantages, fast followers will need to test tags on their products, as well as the ability to read tags consistently in their particular environments. They'll need to set up network infrastructures to handle the RFID tag data, while installing software that can leverage the data and integrate these applications with their RFID systems. Finally, they'll need to change their business processes to take advantage of the data. All of these steps take time.
