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Automating Compliance Processes

RFID will revolutionize the way organizations meet government regulations.
By Samuel Greengard
Oct 23, 2015

During the past decade, RFID has emerged as a valuable way to track assets and inventory, manage processes and oversee supply chains. But beyond the documented benefits, including boosting efficiencies and lowering costs, is an entirely different but important value proposition: tapping RFID to improve regulatory oversight and compliance.

"Organizations find it increasingly difficult to stay on top of regulations and put the necessary processes in place to manage compliance risk," states Anthony Monaco, a partner and service line leader for regulatory compliance at auditing specialists KPMG. "RFID can play an important role."

Illustration: iStockphoto
To be sure, the list of government and industry regulations worldwide expands daily—it includes the Sarbanes-Oxley Act, U.S. Department of Defense and U.S. Food and Drug Administration regulations, Federal Aviation Administration and European Aviation Safety Agency requirements, national programs to monitor livestock and the European Union's Forest Law Enforcement, Governance and Trade plan to address illegal logging. For organizations venturing into the global arena, the risks, challenges and responsibilities are multiplied. RFID can improve accuracy while dramatically reducing the time required for auditing. "It represents a giant leap forward," says Michael McCartney, managing principal at QLM Consulting, which specializes in supply-chain management.

Some organizations, large and small, are adopting RFID specifically to meet government regulations. The Hong Kong Housing Authority, for example, mandates that all contractors use RFID to control the quality of building materials, track the building process and make building maintenance systems more efficient. Contractors must collect logistics and manufacturing information and deliver the electronic records to the Housing Authority. Hillsborough Community College, in Hillsborough County, Florida, adopted RFID to track nearly 17,000 assets on five campuses to meet annual state and federal government audits.

Other organizations are adopting RFID to drive operational efficiencies and then finding they can use the system to meet government regulations. "In many cases, a compliance project that incorporates RFID can grow out of existing RFID systems," says Patrick Javick, GS1 US's industry engagement director.

Mining companies worldwide, for example, are using RFID to automate manual processes, streamline production and reduce costs. With an RFID infrastructure in place, they are also using the technology for personnel tracking, which is required in Sweden and other countries. Brazil's Alog Data Centers deployed an RFID solution to automate its operations and processes at four facilities, to improve inventory accuracy. The solution also provided a more efficient way to comply with new international standards mandating periodic fixed-asset reporting and auditing for IT service firms that have public companies as clients.

Companies that are developing a business case for an RFID project—or those piloting an RFID system—should factor in the cost of complying with government and industry regulations. "RFID in conjunction with sensors and data analytics introduces highly accurate monitoring and reporting functions," says Diana Hage, CEO of RFID Global Solution. "Today, corporations must look to meet regulations in the most cost-efficient manner, and the technology exists to dramatically improve processes."

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