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RFID Adoption Heats Up

Companies in many industries now understand what radio frequency identification is—and how and where it delivers benefits—and they want to reap the rewards.
By Samuel Greengard
Apr 05, 2015

It gives our company a competitive advantage. It enables us to track and manage high-value assets or inventory or work-in-process or vehicles or livestock or perishables in transit... It allows us to safeguard hospital employees and patients or assisted-living residents or miners... It boosts productivity and efficiencies. It improves customer service and engenders loyalty. It saves money and delivers a significant return on investment.

"It" is radio frequency identification, and after numerous fits and starts, the technology is now on a steady path to adoption. The predictions of naysayers and skeptics who questioned RFID's value have been drowned out by published reports from companies across a wide swath of industries that extol the technology's benefits. In addition, news continues to leak out about companies that have deployed RFID but prefer to stay mum on the subject, precisely because they believe it offers a competitive advantage.

Today, most businesses know what RFID is and what it does. They likely are aware of companies in their industry that are using RFID and what benefits those companies have achieved. This is especially the case in the apparel retail sector, as well as health care and manufacturing. But increasingly companies in other industries—from agriculture to waste management—have proven there's a business case for adopting RFID. "There is a growing awareness and understanding about the benefits of RFID," says Michael Liard, an independent analyst and consultant for the RFID industry. "We've seen an uptick in deployments across manufacturing, health care, transportation and logistics, and other fields."

Some may say: "We've heard these predictions about RFID before." It's true many thought RFID would take off when Walmart, the U.S. Department of Defense (DOD) and others required suppliers to tag shipments. But that didn't happen. Before the Great Recession, the industry seemed poised once again to take off. Then, the economic downturn caused many companies to rein in spending on IT projects, including RFID pilots and deployments. In some cases, the threat of lawsuits from so-called patent trolls also led to implementation postponements.

But during that time, the RFID industry continued to improve the technology and develop standards, to make it more reliable, robust and easy to deploy. At the same time, when reducing payrolls and eliminating discretionary spending wasn't enough to weather the recession, some companies turned to RFID and found new efficiencies and cost savings, earning profits even in a sluggish economy.

To achieve benefits from RFID, organizations must still develop a clear deployment strategy—from defining the business case and forming a crossfunctional team to developing training programs and addressing change management (see Best RFID Deployment Practices). "There are a lot of moving parts and a lot of potential use cases," Liard says. "It's important to focus on how and where RFID makes sense and provides the biggest returns."

RFID Can Solve a Problem
One of the key factors in the adoption of a new technology is that it can solve a problem no other technology can solve, according to Geoffrey Moore, author of Crossing the Chasm and Inside the Tornado, two best-selling books that explain how new technologies become mainstream. Companies understand that RFID solves real-world business problems, Liard says.

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