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Achieving ROI from Mandate-Driven Deployments
There is a recent theme in RFID articles, presentations, white papers recommending mandate-driven RFID implementers look into the ROI equation in lieu of mere slap-and-ship. There is a notable lack, however, of realistic guidance as to how that might be accomplished in any given RFID rollout. This article fills that void.
Dec 06, 2005—This article was originally published by RFID Update.
December 6, 2005—I have attended numerous seminars and trade show presentations and read hundreds of white papers and online PowerPoint presentations on the subject of RFID in my 20 years in the business. In more recent perusals there is a relatively common theme suggesting all kinds of recommendations for mandate-driven RFID implementers to look into the ROI equation in lieu of mere slap-and-ship. There is a notable lack, however, of realistic guidance as to how that might be accomplished in any given RFID rollout.
While supply chain applications continue to drive RFID adoption via mandate, recognition of the greater value of RFID for other niche market applications is starting to take hold. In a prior article we looked at a case study for using EPC UHF tags for fixed asset management. Today we will talk about a very simple aspect of asset management using RFID tags and how tremendous the potential value-add proposition can be in ways that might not be so obvious. We will follow this up in a future article that provides a case study supporting the arguments presented today.
In many ways, the supply chain applications that dominate the RFID landscape inherently contain a loss prevention aspect to them. Loss of -- business, CRM opportunities, product and/or assets -- is preventable or at least controllable through an effective RFID deployment. Loss prevention ultimately is a component of any good asset management system. In this context we will discuss the extended value derived from an RFID implementation intended solely for loss prevention by applying these ideas to a simple example of achieving intangible benefit for supply chain activities.
Part of loss prevention is tracking the whereabouts of assets at any given time. In its simplest form, assets might be checked in or out of a facility by authorized persons. By automating the data capture of this check-in/check-out process using RFID, you:
One possible example might be termed implied asset utilization, in which the movement of an asset through a checkpoint implies some level of use depending on the type of asset. This could apply to laptops, vehicles, or other similar categories of asset types.
What information there is to be derived from the capture of check-in/out data would of course vary from application to application, but let's take the case of vehicles, from which three categories of analysis can be easily extracted:
I realize this fork truck concept may or may not be practical and is somewhat oversimplified in its application, but the intent here is to get you thinking about the innumerable tangible and intangible benefits that can be gained by way of such automated data collection activities. Assuming you have a valid business process map of your organizational activities, a thought experiment such as this is a possible first step towards using RFID to validate organizational effectiveness and actually achieve a viable ROI by investing just a bit beyond slap-and-ship.
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