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RFID and C-Level Thinking—What If?

In order to maximize the value of radio frequency identification, an executive must stand back and mull over the strategic implications.
By James Williams
Oct 03, 2005Recently, I was invited to consult on an RFID project for a supply chain initiative. The meeting was originally scheduled with the COO and CIO, but when I arrived, the operations manager informed me that neither executive could join us—both were busy "putting out fires," I was told. Considering the size of the company, a $50 million manufacturer with a very small IT and operations staff, I could understand this. Still, it got me thinking.

It is natural to address immediate issues, particularly when customer service is at stake. But the "C" title carries with it certain responsibilities. The C-level executive brings value to a company by applying strategic and visionary thinking. Too often, we find CxOs too preoccupied with tactical problems to ask strategic questions like, "What if?" And yet, in order to implement effective value through industry-critical applications such as RFID throughout the synchronized value chain (SVC), an executive must stand back and think strategically.


When discussing RFID with my clients, I find that the first things often mentioned are the demands Wal-Mart, Target, the military or other clients are mandating. Such compliance issues are important, but focusing exclusively on them is working backward. Wal-Mart's senior executives, including much-respected CIO Linda Dillman, did not arrive at their RFID model by looking at the demands of their customers, the consumer. Instead, they asked themselves, "What if?" and realized an enormous opportunity to reduce costs and increase competitive advantage.

RFID can do much more than just inform the database that three cases of screws have arrived and 12 cabinets have left, or act as a glorified bar code system with expensive single-use tags. This model has its place, but it makes up only a fraction of the potential uses for RFID. Quite often, it is the other uses that provide the greatest benefit.

When exploring potential RFID applications, we must look beyond passive tags. For instance, active tags can be highly cost-effective when configured for reuse hundreds of times. They can provide the current status, availability or condition of an object throughout a plant or campus. An auto manufacturer uses active RFID tags to track new auto quality control prior to shipment, while a logistics company uses them to trace and secure valuable assets over the road. A food processor, meanwhile, uses such tags to trigger raw inventory alerts to automate procurement. These are what Marlo Brooke, president of Avatar Partners, calls the '3 Ts' of RFID: track, trace and trigger. The volume of potential applications for RFID, when used in conjunction with other devices and systems, is enormous, limited only by imagination and vision.

It is time for C-level executives to ask, "If we could know anything about our products or operations, at any time or in any way, what would it be?" This type of critical strategic thinking has propelled every great company into its position of prominence.

It doesn't cost much to figure out what data a company needs that it does not have and is not real-time—it simply requires a small-time commitment from strategically thinking executives, along with the assistance of supply chain and RFID experts. As Deon Nel, my colleague and RFID engineer at Avatar Partners, says, "The returns can be enormous if just a few critical areas are exposed."

It is likely that no company has yet discovered the killer application for RFID in your industry. When one inevitably does, will it be yours?


James Williams (949-622-5557) is a supply chain practice leader at Avatar Partners, a consulting services company specializing in RFID and supply chain implementation.
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