Aug 03, 2009Many providers of radio frequency identification technology have said to me over the past few years that we need to move away from what that they call "science projects." What they mean is that too many pilots are simply designed to determine if the technology works on their products, or in their environments, without focusing on the potential business benefits. I do agree with that sentiment, but actually, what we really need are more science experiments.
In the world of science, you come up with a hypothesis and then conduct experiments to evaluate if the theory holds up. Pilots should be based on an informed hypothesis regarding the business benefits that can be achieved. For instance: "If we deploy RFID technology, we will cut our labor costs by 20 percent and boost our sales by 3 percent." The pilot can then be run to determine whether the technology does, in fact, deliver such benefits. It might deliver more or less, but the company's CEO would then have the information necessary to make a decision about whether to roll out the technology.
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So the question is, how do you come up with a hypothesis regarding the likely benefits of RFID, without it being just a wild stab in the dark? That's exactly what the ROI calculator I wrote about last week is designed to do (see A New ROI Tool for Apparel and Footwear Retailers). We took common processes in apparel retail and applied formulas, based on results from existing deployments, to provide a reasonable estimate of the benefits (see RFID Journal to Give Away New Retail ROI Calculator at RFID in Fashion 2009). A retailer could plug in its own numbers and determine whether it's worth investing $30,000 in a pilot to determine the actual benefit. The formulas could then be revised based on the data gathered from the pilot, in order to determine whether a rollout makes sense.
Our goal is to create ROI calculators for other industries. I realize other industries' operations can be far more complex than those in apparel retail, but it should still be possible to bring some science to RFID pilots. We can examine the value of tracking key assets in a hospital, for example, or tools in a manufacturing facility, promotions in a mass merchandise store and so forth. These calculators could help companies determine whether RFID would deliver benefits to them, based on what other end users have seen.
If RFID Journal had the resources, we would fund the research and create these tools ourselves. But such work is beyond the reach of any media and events company, so I'm asking the RFID community to step up and provide the resources to create new calculators.
RFID vendors could help fund the research and the calculators' creation, and end users that have completed pilots or deployments could share their findings. The information compiled could then be used in aggregate—we would not disclose any individual results. We would also need the help of independent academic researchers who could provide an objective analysis of the pilot results, so that we could employ the data to create calculators that can accurately forecast RFID's benefits.
We've been collaborating with the University of Arkansas' RFID Research Center on our Fashion Apparel ROI Calculator, but there is a lot more yet to be done. If you are a vendor or an academic interested in this kind of project, please contact me at
editor@rfidjournal.com. And if you are an end user willing to work with us to quantify the benefits of RFID, please let me know. Moving adoption forward will lower costs and improve products for everyone, so by participating in one of these projects, you'll be making a valuable contribution to your industry—as well as to science.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog or click here.
