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What if RFID Were Truly Risk-Free?

To accelerate RFID adoption, we need technology providers that can muster the capability—and the nerve—to shoulder the risk of implementations.
By Stan Drobac
Dec 13, 2010Those of us who have been on the RFID roller coaster for the past decade have seen a lot of ups and downs, but never the kind of breakout growth that we had expected or hoped for. The recent activity in item-level apparel tagging may be the biggest development yet toward large-scale implementation, at least among applications using newer ultrahigh-frequency (UHF) technologies. Still, apparel tagging is just one piece of the larger retail sector, and one for which the benefits of radio frequency identification have been pretty well known for many years. If it is finally time for apparel, why has it taken so long—and why is it not happening in many other areas?

Obviously, some of the early euphoria regarding universal tagging was premature, at best. Even today, there is no clear path to a viable business case for RFID-enabling low-priced grocery items. On the other hand, RFID can be easily justified for many other applications—usually, those involving higher-value goods or long-lived assets. Participants and observers in many types of organizations, with a variety of functional responsibilities, have identified RFID as a tool to improve quality, efficiency and performance in their operations. For many of them, a positive return on investment (ROI) can be clearly calculated and has been demonstrated in their own pilot programs, or those of their competitors. We see proposed projects almost daily where RFID makes both intuitive and financial sense, but large-scale implementations of the technology remain rare.

When—and Why Not Now?
For the past 10 years, many of us have been saying that large-scale RFID adoption is not a question of "if," but of "when." I still believe that to be true, but the statement is understandably wearing thin with many who hear it. The usual—and appropriate—question about adoption is some version of "If the economics make sense, why aren't people doing it?"

If the answer to that were simple, RFID would already be ubiquitous. But it isn't simple. Still, we can identify some of the issues and consider possible solutions.

First, let's take a couple of the really tough problems off the table. We'll stipulate that the tagging of low-value consumer goods will just have to wait for a breakthrough in printed RFID, and/or a universal installation of RFID infrastructure by retailers for other purposes.

And we won't try to make a case for complex open-loop systems where no single player can realize sufficient value to cover the implementation and ongoing tag costs. For those systems, critical mass is too much of a hurdle, and the mechanisms for sharing costs are too difficult to establish. Efforts to accelerate adoption will have limited impact—organizations will inevitably move to RFID, but only after other initiatives have funded some (or all) of the necessary infrastructure.

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