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It's Time To Get Strategic

It's time for companies to begin developing a long-term strategy for using RFID and a plan for deploying it in stages.
Oct 07, 2002Oct. 7, 2002 - I'm not a big fan of management theory. I've heard more people than I care to remember spouting buzzwords they didn't understand, like "cash cow" and "core competency." And during my 20-year career as a business journalist, I've seen companies jump on one bandwagon after another – diversification, business re-engineering, Six Sigma, team management and my personal favorite "digitization" (a fancy way of saying automation, which has been going on since, well, the start of the industrial revolution).

During the "Internet "revolution," one of the big things was "first mover advantage." It did benefit a handful of pioneering companies, including Yahoo and eBay, which were able to build critical mass. But by and large, there was little first mover advantage. I suspect that one day in the not-too-distant future, RFID will become the fad du jour, and business consultants will be telling everyone under the sun that they have to adopt the technology now or risk being consigned to a fate worse than bankruptcy.

Don't believe it. It's not about being first. It's about doing it right. And doing it right will require vision. As we've said before, there were companies that saw the Internet as a powerful tool that could improve many aspects of their business. They deployed it in many different ways throughout their organizations and gained tremendous benefits. Most other companies saw it as a tool that could save a little here and a little there, and the benefits they got were far smaller.

It will be the same with RFID. In this week's installment of our Special Report: Low-Cost RFID: The Way Forward, The Importance of Vision, we show why companies need to develop a long-term strategy for deploying RFID and a plan for introducing RFID step by step. It will take vision to see what your company could do if it could identify every item it makes, moves, sells and touches. And it will take leadership to marshal the resources and the troops to get the company there.

The biggest step may be the first one. Most CEOs – if they've even heard of RFID -- look at the technology and see the problems. No standards. Too expensive. Doesn't work with water and metal. A handful of CEOs around the world look at RFID and see the potential solution to many of their problems – out of stocks, excess inventory, theft, vendor fraud, expensive product recalls, bad data in their computer systems. I could go on, but you get the picture.

In my view, it's time to start plotting strategy. This industry is on the cusp of change. Standards are beginning to emerge, the technology is maturing, and the cost of tags and readers is already at a level where the technology makes sense for many applications. Companies can wait until standards are set in stone and equipment prices fall further, or they can start figuring where they are going and how to get there. The industry could help by showing potential customers a migration path to open standards.

I know from experience that most companies will continue to experiment with RFID here and there, run superficial pilots, and deploy the technology to get a ROI in limited areas. The worst managers will openly scoff at RFID until they realize their competitors are way ahead of them. Then, they'll waste millions trying to catch up. Only a handful of companies will seize the opportunity that's coming. You can teach buzzwords, but you can't teach leadership.

Mark Roberti is the Editor of RFID Journal. If you would like to comment on this article or submit your own, send e-mail to mroberti@rfidjournal.com.
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