May 11, 2008Recently, I've been meeting with executives from a number of manufacturing companies who are charged with a new and key task: pulling together the results of disparate RFID trials into a single, companywide RFID policy. In these companies, RFID has proved its potential value and won the attention of senior management, which means the budget for implementation has been allocated.
This is a heartening sign for the RFID industry. While these companies are among a vanguard of RFID end users, they reveal a determination to move toward RFID adoption in a considered and determined way.
The executives charged with developing a corporate blueprint to help standardize how RFID will be adopted across the company come from any number of disciplines, including finance, IT and production management. One executive told me his company knew that RFID had a role to play in its operations, but without a blueprint it couldn't move forward.
Developing an RFID blueprint is not a straightforward task, and the results will differ from one company to another. But any plan must pull together the key lessons learned from each trial, then determine what is specific to each implementation and what can be replicated across all RFID deployments within the company.
The blueprint should follow the approach that ABI Research has long recommended to its clients: Focus first on the core application where RFID can most readily deliver benefits and a return on investment, but also be aware that to maximize that investment the system must be able to support multiple applications in the future.
Say, for example, the basic application is to enhance visibility of an item during production. That application should also provide a foundation for later developments, such as improving product security or authentication. It could then enable condition monitoring or status reporting. Finally, and adding the most complexity, it could deliver enhanced awareness to power advanced decision-support applications, such as reducing out-of-stocks at retail partners during promotions.
To drive all these benefits, the blueprint must designate a common approach to RFID data collection and sharing information with other applications. It also must cover a companywide approach to calculating any deployment's ROI and understanding the factors that affect the total cost of ownership (TCO), such as annual licensing fees and future upgrades.
In addition, blueprints should include best-practice policies for managing RFID vendor selection. This is particularly important for international companies, where regional capabilities and needs may differ.
Yes, there is plenty of work to be done to develop RFID blueprints, but my conversations reveal that the work is already under way. This signals a real shift from RFID pilots to RFID adoption—all with ROI and TCO top of mind.
Jonathan Collins, former RFID Journal European editor, is now a principal analyst with ABI Research, based in London. His focus is on contactless commerce and RFID.