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Plan an RFID Field Trial That Delivers
8. Run the field trial—then run it again.
Launch the field trial and observe and measure carefully. After the results have been analyzed and the process changes correlated with the outcome, make any changes needed to improve the field trial, such as eliminating the extra person checking orders. Then, run the field trial again, analyze the results again and correlate the process changes with the outcome. Keep repeating the process until it's clear that the results of the field trial were determined by the RFID-supported process change and not external factors.
9. Determine the ROI.
When you have confirmed that the results are attributable to the use of RFID, calculate the ROI by multiplying the savings across product lines and/or facilities and subtracting the cost. Say, for instance, using RFID to improve pick-and-ship accuracy will reduce chargebacks by $100,000 per distribution center per year and eliminate the staff needed to confirm orders, saving another $180,000. How long will it take for the savings to offset the investment in tags, interrogators and infrastructure needed for the RFID system?
10. Combine use cases.
EPC technologies are a form of infrastructure that can be used to solve more than one problem at the same time. rfid journal coined the term "benefits stack" to describe the many small applications that can contribute to solving a single larger problem, such as out-of-stocks, manufacturing defects or excess inventory (see The Road to ROI). After the benefits from one use case are confirmed, examine how the same infrastructure could be applied to other use cases. By piecing together different use cases, companies can offset the cost of complying with tagging requirements and, when the costs of RFID systems decline, achieve a healthy ROI.
"It's about looking at individual pieces and realizing that because this is a systemic technology, it can impact a whole variety of things," says Rehling.
As you follow these 10 steps, keep in mind that things you do in, say, step six might cause you to rethink something you did in step three. For instance, as you look at your product portfolio to determine which products to tag, you might decide that you've underestimated or overestimated the potential benefits related to an application or specific product group. If you've overestimated, you might decide not to launch the pilot at all or to expand the scope.
In many cases, the people designing the field trial will have overlooked a potential benefit of the system that is pointed out by someone who actually uses it during the field trial. "There will be some serendipity that will enable you to spot and go after additional use cases that you didn't see up front," says Rehling. "If you start with the use cases that make the most sense and pursue them in the right way, you will have created an environment that enables people in the trenches to get creative. "
When the field trial is complete, you should have enough information to help you determine what hardware and software you will need to conduct a pilot, the last preparation for a deployment. "You need to refine the business cases along the way for each RFID initiative," says Georgia-Pacific's Tai. "We say 'refine' because you should have identified your baseline work process and key performance indicators that may be impacted during the field trials and set improvement targets. During the pilots, you need to verify those targets and confirm that they can be achieved."
The final stage is the deployment. Tai says that the pilot is really the start of the rollout, and it's just a matter of confirming that improvements of key performance indicators can be achieved, customers' expectation can be met, and the hardware and software systems work the way they are supposed to. "The pilot is to prepare for a long-term deployment," she says. "Once you have everything installed and worked out the kinks, you are really just flipping the switch and now it's in production."
Launch the field trial and observe and measure carefully. After the results have been analyzed and the process changes correlated with the outcome, make any changes needed to improve the field trial, such as eliminating the extra person checking orders. Then, run the field trial again, analyze the results again and correlate the process changes with the outcome. Keep repeating the process until it's clear that the results of the field trial were determined by the RFID-supported process change and not external factors.
9. Determine the ROI.
When you have confirmed that the results are attributable to the use of RFID, calculate the ROI by multiplying the savings across product lines and/or facilities and subtracting the cost. Say, for instance, using RFID to improve pick-and-ship accuracy will reduce chargebacks by $100,000 per distribution center per year and eliminate the staff needed to confirm orders, saving another $180,000. How long will it take for the savings to offset the investment in tags, interrogators and infrastructure needed for the RFID system?
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| It's often a good idea to plan a field trial with another party in the supply chain. Refine business cases along the way for each RFID initiative. |
EPC technologies are a form of infrastructure that can be used to solve more than one problem at the same time. rfid journal coined the term "benefits stack" to describe the many small applications that can contribute to solving a single larger problem, such as out-of-stocks, manufacturing defects or excess inventory (see The Road to ROI). After the benefits from one use case are confirmed, examine how the same infrastructure could be applied to other use cases. By piecing together different use cases, companies can offset the cost of complying with tagging requirements and, when the costs of RFID systems decline, achieve a healthy ROI.
"It's about looking at individual pieces and realizing that because this is a systemic technology, it can impact a whole variety of things," says Rehling.
As you follow these 10 steps, keep in mind that things you do in, say, step six might cause you to rethink something you did in step three. For instance, as you look at your product portfolio to determine which products to tag, you might decide that you've underestimated or overestimated the potential benefits related to an application or specific product group. If you've overestimated, you might decide not to launch the pilot at all or to expand the scope.
In many cases, the people designing the field trial will have overlooked a potential benefit of the system that is pointed out by someone who actually uses it during the field trial. "There will be some serendipity that will enable you to spot and go after additional use cases that you didn't see up front," says Rehling. "If you start with the use cases that make the most sense and pursue them in the right way, you will have created an environment that enables people in the trenches to get creative. "
When the field trial is complete, you should have enough information to help you determine what hardware and software you will need to conduct a pilot, the last preparation for a deployment. "You need to refine the business cases along the way for each RFID initiative," says Georgia-Pacific's Tai. "We say 'refine' because you should have identified your baseline work process and key performance indicators that may be impacted during the field trials and set improvement targets. During the pilots, you need to verify those targets and confirm that they can be achieved."
The final stage is the deployment. Tai says that the pilot is really the start of the rollout, and it's just a matter of confirming that improvements of key performance indicators can be achieved, customers' expectation can be met, and the hardware and software systems work the way they are supposed to. "The pilot is to prepare for a long-term deployment," she says. "Once you have everything installed and worked out the kinks, you are really just flipping the switch and now it's in production."
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