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RFID in a Growing Economy

More companies are deploying radio frequency identification, but they need to look beyond single projects that deliver an ROI and plan an enterprise-wide approach enabling multiple benefits.
By Mark Roberti
Jun 17, 2013

The economic news in the United States has been mostly positive during recent months. Last week, the business pages of most newspapers (yes, they still exist) were abuzz with reports that applications for unemployment benefits declined by 6.5 percent since January, and retail sales rose by 0.6 percent in May from April. Last month, consumer confidence reached a five-year high; it dipped slightly in June, but home prices have been rising.

By and large, the U.S. economy is showing unexpected resilience. Economists said the numbers indicate that employers are shedding fewer jobs, and they predict that job growth, while not as strong as most would like, will remain consistent. We have not—at least, so far—seen the slowdown that was expected due to the so-called sequester, the mandatory cuts in federal and military spending agreed to by the Obama administration and Congressional Republicans.

This good news raises two questions in my mind. One is whether growth in the United States will stimulate the global economy. The second is this: Will companies take advantage of their improving prospects to invest in new technologies, including radio frequency identification, to improve their operational competitiveness?

The answer to the first question is anyone's guess. Even economists don't know. The answer to the second is that smart companies will invest in new technology. The economy may be growing, but it's not doing so fast enough, and the competition for customers remains as intense as ever (unless you are in the luxury end of the market, where sales seem to be robust).

RFID offers the greatest opportunity for increasing productivity and improving customer service. Macy's and other major retailers are rolling out the technology to dramatically improve inventory accuracy, which will enable them to boost sales in stores and offer customers the ability to buy online, or via mobile phone (the so-called omnichannel approach to retailing).

Manufacturers—even those already highly efficient—are using RFID to boost operations. Carrier, for example, reduced shipping errors by 90 percent and boosted productivity by 30 percent with RFID (see Carrier Takes Manufacturing to a Higher Level). And oil and gas companies are employing the technology to manage assets, improve drilling and maintenance operations, and implement real-time safety solutions (see Benefits Fuel RFID Deployments).

The improving economy, the maturity of RFID technology and the growing number of successful deployments will encourage CEOs to fund more RFID projects this year. I saw signs of this at our RFID Journal LIVE! conference and exhibition, held in Orlando, Fla., a couple of months ago. Many attendees told me their companies planned to deploy the technology by year's end. The challenge will not be to achieve a return on investment from these deployments—instead, it will be to have a strategic approach enabling companies to create an RFID infrastructure that can be used for multiple applications, delivering greater benefits than any single project.

My advice: Start planning an RFID strategy now. Make a list of projects that will deliver a short-term benefit, but develop a plan for phasing in these projects with an eye toward building—project by project—a hardware and software infrastructure able to provide enterprise-wide visibility. With the economy starting to pick up, you will be able to fund these projects now, and have a cost-saving infrastructure in place that will make your company competitive in a strong economy, and far better able to deal with the next downturn.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.

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