Annin Puts ROI on Hold

After the order has been verified, scanned and tagged, the operator moves it to the 42-feet-long RFID conveyor line, which is outfitted with a cage portal housing three Alien antennas attached to one Alien reader. Each tag is read and verified, and the information is recorded in SAP.

Once the pallet or cases have been completely loaded onto the belt, the operator closes out the order by sending a pallet RFID tag through the conveyor. "The final tag we send down the line is the pallet tag," Smith says. "When the pallet tag is read, the system knows that all items previously read are commissioned to that particular pallet." Data collected via RFID is compared with information in Annin's SAP database, and if the orders placed don't match those packed, the system alerts the staff.

According to Smith, Annin spent approximately $50,000 to implement the system, receiving financial incentives from CIBER and SAP to participate in the RFID project. For now, the company has not yet achieved an ROI because it is not using the system to reduce chargebacks. "There is no active ROI at this point in time," he says, adding, "It's in a dormant state."

Since the RFID system first became operational, Annin has shipped out more than 7,500 case tags and 500 pallet tags. Although Annin is not shipping to a large number of RFID-enabled Wal-Mart sites, Smith says, the manufacturer has learned valuable lessons from its RFID implementation. These include gaining an understanding of RFID "by separating the technology from the hype" via hands-on experience.

"Every business case is different," Smith says. "You have to learn how to deal with the changing environments—the vendors, the technology and the culture. It's a culture change at the human level, because many people feel threatened by the technology." He adds, "It has been a learning experience. I really felt that the car could be driven at 150 miles an hour, but the car has been driving at 55 or 65. The opportunity down the road is to drive at 150 miles per hour."