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RFID Research Supports Real-World Experimentation
Simulation can be a good tool for modeling the effects of known potential RFID process changes, but real-world experimentation may uncover additional benefits and changes.
Oct 10, 2011—In a recent article, RFID Journal founder and editor Mark Roberti suggested that businesses should consider thinking of radio frequency identification as infrastructure, since it can make such a wide impact within organizations and across supply chains (see Do You Really Need to Justify Your RFID Investment?). When RFID is broadly used in this way, he argued, traditional return-on-investment (ROI) justifications focused on specific applications become less critical. This is important, because even with falling costs for tags and supporting hardware, some companies remain hesitant to make RFID investments when they focus on individual applications and expected benefits. To help overcome this concern, Roberti and others have encouraged businesses for years to experiment with RFID, even if only on a relatively small scale, because surprising benefits can often be achieved by using the technology (see Mastering the Tool and New Balance Taking First Steps With RFID).
Academic researchers recently reached similar conclusions about the shortcomings of traditional payback models that assume too few benefits from RFID (see An RFID Application in Large Job Shop Remanufacturing Operations). Professors Geraldo Ferrer, Susan K. Heath and Nicholas Dew, from the Naval Postgraduate School (NPS), examined the use of RFID as part of a real-time location system (RTLS) implemented to help improve remanufacturing performance at the Tobyhanna Army Depot, in Pennsylvania. By implementing RFID, the depot was able to reduce the average time required to remanufacture one type of radar system by 62 percent, though remanufacturing processes for other types of radar systems showed less improvement. Because of this, the researchers developed a simulation model using the Arena software package to identify process characteristics that facilitate larger performance gains.
If the Tobyhanna Army Depot had conducted an ROI analysis prior to implementing RFID, and had only assumed that a narrow range of process changes were possible, it might not have made the investment that led to the high-performing process. The research shows that analysts should not be overly conservative when estimating RFID's cumulative impact. The NPS researchers have very strong backgrounds in industry and academia, so they realized that the initial simulation scenarios that they studied had not reflected all ways in which RFID improves processes. Although they adjusted their analysis accordingly, it is not difficult to imagine others employing a less rich model and erroneously concluding that RFID is not worth deploying. After the technology occasionally experienced excessive hype over the years, it is ironic that companies may now miss out on significant competitive benefits due to a lack of imagination and an excess of caution.
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