By Anthony Higginbottom

To meet deadlines for putting RFID tags on pallets and cases shipped to major retailers, manufacturers have to decide whether to start with a minimalist “slap-and-ship” approach or initiate a full-scale integration. Slapping tags on products just before they leave the manufacturing facility or warehouse could cost $2 million to $20 million annually, according to Forrester Research. Integrating RFID with back-end systems is much costlier.

So when should a company simply slap and ship? And when should it opt for a full-scale RFID integration?

Each company needs to do a business-case analysis to determine the best approach to achieving RFID compliance. But here are some things to consider. Slap and ship is a short-term stopgap approach that can be used only with small volumes of product. A full-scale implementation is a long-term, strategic option that involves deploying RFID enterprise-wide. The initial costs and effort required are much higher, but so is the potential return on investment.
The key to mitigating risk in RFID planning is to transition from a short-term, tactical approach to a long-term strategic one. When is the right time to begin making that incremental transition? To know that, a company has to determine its “tipping point.”

The tipping point is determined by analyzing when the financial benefits of a full-scale integration outweigh the cost of using a slap-and-ship approach. In other words, when you can save more by integrating RFID with the back end than it’s costing you to slap and ship, you’ve reached the tipping point.