The Return of Productivity

RFID is helping companies to cost-effectively collect the information they need to dramatically boost their productivity.
Published: August 30, 2016

Productivity in the United States and other industrial countries has been down for the past six years, and economists have been debating the reasons. Pessimists say technology has delivered all the big benefits, and most of the recent digital innovations—Facebook, Twitter and Snapchat, for example—provide no economic value. Optimists say there is still plenty of room for technology to deliver gains.

No one will be surprised to learn that I fall into the latter camp. As we reveal in our cover story, RFID and Productivity Growth: Behind the Economic Statistics, big productivity gains are being achieved by organizations in health care, logistics, manufacturing, retail and other sectors.

It’s not just that RFID can reduce the amount of time required to count items by upward of 98 percent. It’s that being able to capture data so much more efficiently allows companies to do so more often and in more places without raising costs or disrupting normal business operations.

Why is that important? Consider Delta Air Lines, which is using RFID to check expiration dates on oxygen generators aboard a 757 aircraft. It used to take eight man-hours to do the job, which meant the airline could capture the information only when a plane was in for maintenance. Now, Delta can capture that data in less than a minute, which means one person with a handheld reader can check expiration dates while a plane is being cleaned and readied for its next flight.

That means Delta can plan how many oxygen canisters it will need in the future to replace those nearing their expiration date. It can inform its supplier, so the supplier can have the canisters ready for delivery when they are needed, and Delta can send them to airports via the most cost-effective means and install them just before the expiration date. All this increases productivity throughout the supply chain.

Restaurants and food-service outlets have been among the laggards when it comes to investing in new technologies, but RFID is beginning to have an impact in that sector (see Vertical Focus). K&N Management, for example, is using RFID at its four Mighty Fine Burgers, Fries & Shakes fast-casual restaurants, in Austin, Texas, to speed delivery of food to tables and increase table turns, and therefore revenue. Other restaurants are using RFID sensors to ensure food freshness without investing a lot of labor in checking manual data loggers.

Food retailers are beginning to track totes in the supply chain and perishable items in stores (see Product Developments). The pilot programs indicate RFID can improve inventory productivity, margins, store-operations execution and overall customer experience.

RFID doesn’t automatically—or magically—make an inefficient company efficient, of course. But it does provide a means to cost-effectively collect the information needed to dramatically boost productivity.

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.