March 10, 2003 – The Bush administration’s latest budget has re-ignited the debate in the United States about whether investments in technology provide a permanent boost in productivity or not. During the Internet boom, when the US economy was growing at better than 5 percent without inflation, many experts said that this was proof that technology does provide permanent productivity gains.
Productivity is generally defined by economists as the amount of output (what is produced) per unit of input (labor, in this case) used, or real GDP per person-hour worked. Does new technology make it possible for companies to produce more with the same or fewer people?
These days, I read more and more articles in which economists and others question whether it does. I looked into this subject for an article during the Internet boom, and I can tell you it is a highly complex issue that will be argued over for years. But it is crystal clear to me, and has been for a while, that radio frequency identification has the potential to boost productivity in ways that very few other technologies can. That’s because RFID takes people out of the loop.
John Greaves, director of RFID at CHEP, has coined the term 0HIO, for “zero human involvement operations.” 0HIO is a place where people don’t have to scan bar codes. That saves time and makes employees more productive. OHIO is a place where people don’t waste time counting inventory over and over, where people don’t sit at a keyboard and enter routine information about what was shipped and when, where robots can identify and interact with components.
But getting to 0HIO is not going to be easy. I’ve said this before: Putting tags on goods and readers on doorways is the easy part. Translating data from RFID readers into information that companies can use to run their businesses more efficiently is harder. And changing the way people do their job is probably the hardest part of all.
In short, productivity is more about good management than good technology. It takes good management to choose the right technology, to get it implemented properly and then to get people to change the way they do things so they become more productive. Unfortunately, managing is hard, because human beings are flawed. We all have egos, personal issues and peccadilloes.
RFID can take human beings out of particular operations, but no technology will replace good management. So maybe every RFID installation should begin with management training. Training to understand what RFID can and can’t do. Training to understand what kind of information an RFID system can provide and how it can be used. Training to show managers how to get staff to take advantage of the system. That kind of an approach might actually prove to be productive.
Mark Roberti is the Editor of RFID Journal. If you would like to comment on this article, send e-mail to
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