RFID Visionaries Open EPCglobal Conference

Oct 18, 2006This article was originally published by RFID Update.

October 18, 2006—The EPCglobal US Conference officially kicked off today at the city convention center in Los Angeles, California. There was a pre-conference day yesterday for end users, mostly retail suppliers to Wal-Mart or aerospace suppliers to Boeing.

The general show opened this morning with a round of speeches from industry influencers Rollin Ford, CIO of Wal-Mart; Dave Kepler, CIO of chemicals giant DOW; Tom Pizzuto, director of RFID technologies for pharmaceuticals giant Wyeth; Reik Read, senior research analyst of investment firm Baird and author of the widely-read RFID Monthly; and Carolyn Walton, vice president of information systems of Wal-Mart. The speakers' presentations covered the gamut of topics, from state of adoption to ROI to the specifics of implementation. Following are some of the takeaways:

• Historically, many suppliers had complained that the RFID-generated data they received back from Wal-Mart was spotty and inconsistent, but the situation seems to be getting better. The data quality has improved, and the amount of data has increased. As one end user noted, however, this is a blessing and a curse. It is still not clear exactly what to do with the data to deliver material business benefit.
   
• "We don't know what we don't know." This refrain from the presenters meant to capture the idea that much of the business benefit to RFID is undiscovered, so it is still too early to demonstrate clear-cut business cases or ROI models. That doesn't mean that business cases don't exist, but that the only way to discover them is through deployment of the technology. Procter & Gamble's favorite example is promotions tracking, which wasn't even discussed a couple years ago but has recently provided dramatic improvements to multimillion dollar marketing campaigns (such as the launch of the new Fusion razor).
   
• While many focus on the retail industry's disappointing adoption of RFID, adoption by other industries -- chemical and transportation -- and for other applications -- asset tracking -- is moving forward apace. It is important to be reminded of these developments to realize that meaningful progress is occurring.
   
• Cooperation and collaboration are critical to the success of a supply chain RFID deployment, even if it means working with competitors. Baird's Read encouraged end users to "share war stories," while Wal-Mart's Walton said, "If you go it alone, you will fail."
   
• Despite this call for collaboration, the end users RFID Update spoke with informally thought it would probably go unheeded. Any end user that has discovered a compelling value proposition for RFID is not likely to forfeit such hard-earned competitive advantage by publishing it in a white paper for all to read.
   
• Wyeth's Pizzuto warned that selling RFID deployment within an organization is not for the faint of heart. "In order to implement RFID," he said, "it really helps to have a good sense of humor and thick skin, because you'll hear the word 'no' a lot."
   
• Procter & Gamble's Cantwell emphasized the need for vision, comparing the nascent RFID industry to Hollywood at the turn of the twentieth century. At that time, Hollywood was a small dusty farm town, and so-called "moving picture" technology was cutting edge but still crude. Movies as we understand them today began as a germ of an idea, Cantwell recounted. It took an ecosystem of visionary technologists, directors, actors, and screenwriters "coming together to unlock the full potential of the technology." That same vision is necessary to make widespread RFID adoption a reality, he said.
   
• As a demonstration of his company's commitment to RFID, Cantwell discussed Procter & Gamble's post-acquisition integration of Gillette over the last year. Every Gillette initiative and project was scrutinized to determine whether or not it was worth continuing as part of Procter & Gamble. "If we couldn't justify the need for EPC, if we couldn't see growth and results, we just wouldn't continue. But that didn't happen. RFID passed the test." (As an aside, Wal-Mart also reportedly went through a reevaluation of its RFID initiative earlier this year when Rollin Ford took the reigns from former CIO and RFID visionary Linda Dillman. The company's recently announced intention to double the RFID footprint from 500 to 1,000 stores represents a similar affirmation of commitment to RFID.)
   
• Baird's Read predicted increased merger and acquisition activity in the coming 12 to 18 months, as larger companies snap up smaller ones to gain a foothold in the RFID market. He believes such activity will prove beneficial for the industry because the participation of bigger players with more resources will further adoption.
   
• The general session ended with the presenters offering advice to companies just now beginning to implement RFID. Following are the key points:
  • Recognize that RFID implementation is a journey, not a destination. It will be an evolving, multi-year process, not a task to be checked off a list.
     
  • Learn from the experience of others (to the extent they will share their findings). As one presenter said, "Steal shamelessly from every experience you can find." As a starting point, ask trading partners and talk to other EPCglobal members.
     
  • Don't underestimate the "change management" that will be required for a successful RFID deployment. Training and educating the employees that will actually interact with the technology is a necessity, so it should be incorporated into the budgeting for the overall cost of an RFID project.
     
  • So too should the integration of RFID with existing processes. "It's more than just the cost of tags and readers, it's the retrofitting of the manufacturing line," said Wyeth's Pizzuto. "You need to have a holistic view of RFID deployment."
     
  • Don't have a fear of failure. Learn from mistakes, and strive to make new discoveries with the technology. As Cantwell reiterated many times, RFID is uncharted territory for everyone, so those that take risks and experiment are likely to uncover the knowledge that yields long-term competitive advantage.