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Does the RFID Industry Know the Facts?

According to research from Incucomm, there is a widely held but erroneous view that the DoD mandate will cause the consumption of more RFID tags than the Wal-Mart mandate. Nothing could be further from the truth.
Jun 15, 2005This article was originally published by RFID Update.

June 15, 2005—We recently asked over 350 respondents about several RFID topics, including defense use of tags compared to retail logistics.

We were surprised that more than a third thought defense would consume as many tags or more than retail logistics. This view does not match the facts. The Defense Logistics Agency (DLA) processes about 90% of DoD consumables; roughly 10 million annual receipts. Compare this to Wal-Mart's processing of several billion items through distribution centers.

Given the ratio of items tagged, a fair guess is DoD will consume 5% as many tags as Wal-Mart.

Defense and aerospace people knew this. None thought defense would use more. But, about 30% of respondents in RFID felt defense would use as much or more than retail – about the same as respondents outside RFID.

Respondents working for large corporations were more likely to have flawed views on the DoD question. So, the problem is not lack of resources. Big firms can afford research. I recently asked a Fortune 100 executive about RFID research spending. He claimed most of his company's spending was on firms hired to issue findings to support their aspirations.

If this is true, one result has been the confusion of large firms, not the smaller ones that actually constitute the majority of Wal-Mart's supplier base. Small and mid cap firms were less likely to be confused on the DoD vs. Retail topic.

We do research in several markets; all have flaws in consensus opinion. This is a common outcome in polling. Gallup frequently calibrates polls by asking people about known facts (How big is the National Debt?)

But, this seems more common in RFID. In nascent markets, it's tempting to believe "my opinion is as valid as the next person's." But, as lawyers say, you are entitled to your opinion, but not to your own facts.

Those who do best in RFID may be those who check the facts.
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