Home Internet of Things Aerospace Apparel Energy Defense Health Care Logistics Manufacturing Retail

Access This Premium Content

Options To Access This Article:

What Subscribers Are Saying

  • "Probably the best investment I've ever made."
    Steve Meizlish, President & CEO, MeizCorp Services, Inc.
  • "I have found that RFID Journal provides an objective viewpoint of RFID. It you are looking for a resource that provides insights as to the application and implications of deploying RFID, RFID Journal will meet your needs, It gives you a broad perspective of RFID, beyond the retail supply chain."
    Mike O'Shea, Director of Corporate AutoID/RFID Strategies & Technologies, Kimberly-Clark Corp.
  • "No other source provides the consistent value-added insight that Mark Robert and his staff do. In a world dominated by press release after press release, RFID Journal is developing as the one place to go to make the most sense out of the present and future of RFID in commerce."
    Bob Hurley, Project Leader for RFID, Bayer HealthCare's Consumer Care Division
  • "RFID Journal is the one go-to source for information on the latest in RFID technology."
    Bruce Keim, Director, Hewlett-Packard
  • "RFID Journal is the only source I need to keep up to the minute with the happenings in the RFID world."
    Blair Hawley, VP of Supply Chain, Remington Products Company

What’s Your Tipping Point?

Managing the risk of an RFID deployment means knowing when to move from a slap-and-ship approach to a full-scale integration.
By Bob Violino
Jul 20, 2004—By Anthony Higginbottom

To meet deadlines for putting RFID tags on pallets and cases shipped to major retailers, manufacturers have to decide whether to start with a minimalist “slap-and-ship” approach or initiate a full-scale integration. Slapping tags on products just before they leave the manufacturing facility or warehouse could cost $2 million to $20 million annually, according to Forrester Research. Integrating RFID with back-end systems is much costlier.

So when should a company simply slap and ship? And when should it opt for a full-scale RFID integration?

Each company needs to do a business-case analysis to determine the best approach to achieving RFID compliance. But here are some things to consider. Slap and ship is a short-term stopgap approach that can be used only with small volumes of product. A full-scale implementation is a long-term, strategic option that involves deploying RFID enterprise-wide. The initial costs and effort required are much higher, but so is the potential return on investment.
The key to mitigating risk in RFID planning is to transition from a short-term, tactical approach to a long-term strategic one. When is the right time to begin making that incremental transition? To know that, a company has to determine its “tipping point.”

The tipping point is determined by analyzing when the financial benefits of a full-scale integration outweigh the cost of using a slap-and-ship approach. In other words, when you can save more by integrating RFID with the back end than it’s costing you to slap and ship, you’ve reached the tipping point.

The tipping point is different for each company. Producers of high-value products (such as film, batteries, razors or prescription drugs) that are often stolen or out of stock might gain significant benefits from a full-scale RFID deployment. So might companies that make high-value goods that are often counterfeited or become obsolete quickly.

The tipping point is constantly changing and is affected by many factors. If more retailers require RFID tagging, or more of a supplier’s facilities must install equipment to meet mandates, that drives up costs and brings the tipping point closer. If tag prices drop, that reduces costs and pushes the tipping point farther out (see chart). And if a company changes its product portfolio—say, it introduces a hot, high-value item—that might increase the potential benefits and alter the tipping point.

Companies that haven’t already launched a strategic RFID integration should conduct a tipping-point analysis. Slap and ship might be an effective starting point for some companies. But keep in mind that the tipping point is constantly changing, as tag prices and other costs and benefits change.

Planning a successful transition from a slap-and-ship approach to a full-scale implementation based on a tipping-point analysis could be the key to a successful, cost-effective RFID implementation. Start planning your transformational approach beyond slap and ship today—you may discover that you’ve already reached your tipping point.

Anthony Higginbottom is a senior manager in the multidisciplinary RFID practice of Deloitte, a New York–based consulting firm.
To continue reading this article, please log in or choose a purchase option.

Option 1: Become a Premium Member.

One-year subscription, unlimited access to Premium Content: $189

Gain access to all of our premium content and receive 10% off RFID Reports and RFID Events!

Option 2: Purchase access to this specific article.

This article contains 495 words and 1 page. Purchase Price: $19.99

Upgrade now, and you'll get immediate access to:

  • Case Studies

    Our in-dept case-study articles show you, step by step, how early adopters assessed the business case for an application, piloted it and rolled out the technology.

    Free Sample: How Cognizant Cut Costs by Deploying RFID to Track IT Assets

  • Best Practices

    The best way to avoid pitfalls is to know what best practices early adopters have already established. Our best practices have helped hundreds of companies do just that.

  • How-To Articles

    Don’t waste time trying to figure out how to RFID-enable a forklift, or deciding whether to use fixed or mobile readers. Our how-to articles provide practical advice and reliable answers to many implementation questions.

  • Features

    These informative articles focus on adoption issues, standards and other important trends in the RFID industry.

    Free Sample: Europe Is Rolling Out RFID

  • Magazine Articles

    All RFID Journal Premium Subscribers receive our bimonthly RFID Journal print magazine at no extra cost, and also have access to the complete online archive of magazine articles from past years.

Become a member today!

RFID Journal LIVE! RFID in Health Care LIVE! LatAm LIVE! Brasil LIVE! Europe RFID Connect Virtual Events RFID Journal Awards Webinars Presentations
© Copyright 2002-2016 RFID Journal LLC.
Powered By: Haycco