Leadership Is Necessary to Get RFID Right

Jul 05, 2011Last week, I wrote about the need for competitors to collaborate in order to drive the adoption of radio frequency identification technologies in specific industries (see Collaboration Can Accelerate RFID Adoption). Taking that idea a step further, it seems to me that leadership is required within each industry to drive adoption in a standardized way. And by that, I mean real leadership.

Being a leader means seeing the big picture. In this case, it means understanding that an individual company will benefit more if an entire industry adopts RFID. (Think about how useful the Internet would be if only one firm within each industry had adopted it.)

Leadership also means doing things that might go against the grain. Think about U.S. President Richard Nixon establishing a relationship with China. Nixon was strongly anti-communist, but he befriended that nation because he saw the strategic benefits of doing so, even if he didn't like the idea of getting closer to a communist regime.

Similarly, senior executives need to understand that they have to put aside their intense competition with others in their industry for the sake of promoting RFID adoption. That isn't always easy. Many industry players are reluctant to promote adoption, because they don't want to let their competitors know the extent to which they are benefiting from the technology. But the alternative is for companies to each invest in RFID in different ways, thereby creating inefficiencies and additional costs.

Apparel retail executives from Dillard's, JCPenney, Wal-Mart Stores and other major companies saw the big picture when they joined the Voluntary Interindustry Commerce Solutions Association's Item-Level RFID Initiative to promote the adoption of Electronic Product Code (EPC) standards, and to agree on how they should be implemented (see Major Retailers, Industry Groups Launch Item-Level RFID Guidelines Initiative).

Some retailers have gotten a few of their suppliers to tag products, and they are seeing some real benefits from these efforts. But the vast majority of companies that supply apparel products are sitting on the sideline. If the situation persists, millions of dollars in possible benefits will remain unrealized. But if the entire industry were to move toward adoption, then everyone would achieve greater benefits, and the technology's cost would decrease.

Finally, leaders need to execute. What I've seen over the 10 years that I've been covering RFID is that industry collaboration happens, but often in fits and starts. Senior executives need to dedicate resources to collaborative efforts. Typically, people perform standards work in addition to their day job—but that means when they become busy with their actual duties, the standards work doesn't get done.

One last thing about leaders. They need to be prepared to take some slings and arrows for their initiative. Walmart stood up and promoted the use of RFID based on EPC standards for tracking consumer packaged goods, and a lot of other retailers resented the retailer for its leadership role. Any leader that steps up in any industry will face similar resentment, but that company must persist in the knowledge that it is working for the greater good—the good of its shareholders, as well as of the entire industry—and it needs to work to bring others on board and build a consensus.

The benefits of RFID are now clear in many applications, across multiple industries. Companies can benefit internally by going it alone, but a standards-based approach across each industry will lead to greater benefits for all.

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, the Editor's Note archive or RFID Connect.