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RFID Recommendations to Logistics Providers
This third article of a three-part series from Forrester Research about RFID's adoption in the transport and logistics industry offers recommendations to transport and logistics providers as they approach RFID.
Nov 12, 2005—This article was originally published by RFID Update.
November 12, 2005—This is the third of a three-part series of articles from Forrester Research about RFID's adoption in the transport and logistics industry. Part 1 in the series, The Present and Future of RFID in Logistics, recapped what logistics providers shared about their current progress and future plans for RFID at eyefortransport's RFID Opportunities for Transport and Logistics Providers event in October. The second article, The Hard RFID Questions for Logistics Providers, looked at some of the industry-specific hurdles ahead for broader adoption throughout the logistics industry. This article will offer recommendations to transport and logistics providers as they approach RFID.
Growing through acquisitions and offering highly customized solutions to their clients, most global logistics providers have to manage a fragmented IT network, across regions and customers. This limits logistics providers' ability to gain economies of scale across their global networks, quashing their ability to leverage their global presence to offer clients end-to-end supply chain services. For example, given its aggressive acquisition strategy, Deutsche Post promises an expansive global supply network that includes the individual networks of providers like Exel, Tibbet & Britten, and Airborne Express. But Deutsche Post must first build visibility across these disparate networks to truly leverage economies of scale and uncover additional supply chain efficiencies for its customers. However, with siloed IT networks it is impossible for the company to identify cross-network opportunities, like improving asset use or obtaining better rates for its combined transportation services.
Logistics providers must recognize the parallels between the challenge to create a standard and open IT backbone and the future challenges that they will face if they continue to offer customers highly customized RFID-based solutions. Lack of interoperability of the technology will prevent cross-client visibility in areas like warehouse capacity or transportation availability. And with a nascent RFID hardware market, and multiple vendors -- like Savi Technologies and Wherenet -- working to become the de facto standard by gaining majority market share, there is a strong possibility that, in five years, logistics providers will have to maintain different customized RFID infrastructure for each client, each with unique maintenance and IT support needs. To avoid this fate, logistics providers must:
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