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Don't Ignore the Benefits of RFID

Some companies tagging goods to meet RFID mandates are missing an opportunity to cut costs and increase sales.
By Mark Roberti
Aug 06, 2007"We're doing the minimum, and we will continue to do the minimum." That's what I was told recently by an executive at a company that has been required to use radio frequency identification on products shipped to one of its largest customers. This executive, who requested anonymity, said his company is not using the data provided by its customer and doesn't see any benefit to RFID whatsoever.

I know the attitude of this person and his company is not unique—and I find it totally befuddling. RFID has become a cost with little or no benefit to this company, yet many other companies are achieving benefits by using the RFID data provided by retailers. Why wouldn't you want to join them?


Perhaps this company's CEO doesn't believe the benefits are real, or perhaps he doesn't know what benefits can be achieved from using RFID data. Yet RFID is delivering value for companies in many industries.

Companies looking to offset the cost of tagging goods and potentially achieve a return on their RFID investment can learn how other companies use Electronic Product Code technology to achieve real business benefits at EPC Connection 2007, a Chicago-based conference and exhibition we are producing with EPCglobal North America on Oct. 2-4. It's interesting to note that some companies that adopted RFID were not required to do so. Here's a sampling of the companies that will present case studies—you can view the complete EPC Connection agenda online:
  • Handleman Company, a DVD distributor, has integrated RFID tagging at a distribution center and is tracking DVDs through the supply chain, delivering benefits to itself, manufacturers and retailers.
  • Megatrux, a group of individual transportation corporations, is tagging and tracking cases and pallets bound for Wal-Mart facilities. The group has improved internal shipping accuracies and expects to see a return on investment within 14 months.
  • Shaw Industries, a carpet and rug supplier, is tagging and tracking products between its regional and central distribution centers. The closed-loop system cut distribution costs by associating the products with paperwork for truck drivers transporting the rugs.
  • Northrup Grumman has reduced manufacturing costs by using RFID to identify and track damaged composite parts.
  • is using EPC data to identify when its retail partner fails to put promotional displays out on time—and in so doing, it has improved promotion execution by 20 percent.
  • Cephalon, a pharmaceutical company, is tagging cases and pallets of Fentora, a cancer treatment drug, to fight counterfeiting and improve its outbound product tracking.
  • Excel, a logistics company, is using EPC technology to track goods flowing from the port of Shanghai to mainland United States, providing increased supply-chain visibility for its customers.

USER COMMENTS

Ronan Clinton 2007-08-18 03:34:49 AM
Don't ignore the benefits of RFID??? Hi Mark I have been reading your articles for some time and decided to finally post a comment about your latest snippet... My company provides solutions including RFID and I am of the opinion that you should be writing articles entitled 'don't ignore the complexity and total cost of delivering RFID'. If you are so convinced of the benefits and savings etc., you don;t need to constantly shirk off what are real problems and try to thunder forward regardless - If RFID was going to be what you constantly say it is, you wouldn't need to be asking questions about why companies do not want it. Company directors are not stupid and neither are business leaders. They make informed decisions about their companies (granted not always the right ones) and they try to ensure future success as much as is practicable. It is insulting to their intelligence to tell them that they don't see the 'RFID light'. Some visionaries have been sold RFID (and I specifically state that they were sold RFID and did not buy RFID) by large manufacturers and took the bait. People do not see the RFID light because the closer they look, the more they realise that it is just being over-hyped. You are contributing to the hype and this will ultimately slow the adoption process down. Every success story you have can be equalled by a larger number of RFID disasters. I would like to see some of these case studies on your website. And I mean real costly,gone out of business, type disasters. You mention that you find it befuddling that people don't spend their money on RFID???? Companies cannot afford to implement every technological advance into their companies based on a return on investment. They just don't have the money. If there is money available, then projects such as RFID go onto a list of other projects that may gain ROI and effectively has to compete internally. RFID will never win in this scenario given other proven technologies and quicker ROI. RFID has too many unknowns until you actually go to deploy it People have grown weary of 'success' stories. There are stories about how many Fortune 500 companies are implementing RFID. I am of the opinion that the advocators, manufacturers and integrators are so desperate to have statistics about how many Fortune 500 companies are using RFID that they are funded and discounted to the hilt to get the story. It is easy to get an ROI if you aren't paying for it... I compare RFID to the internet collapse of the late 1990's. RFID will survive, but there will be an RFID 'crash' that will put everything back into perspective. I would council people in the industry to be prepared for it and ensure that they are one of the survivors. My final criticism is related to joining your website as this is something that has bugged me for some time. I have been to numerous seminars over the last couple of years and they have all had feedback forms as you would expect. Any RFID 'feedback' form was a request for information about my buying power and how much am I going to spend on RFID. Joining your website was the same request for details. Is this purely a statistical quest or lead generation???

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