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Plan an RFID Field Trial That Delivers

Now there are established best practices to help retailers, manufacturers and distributors determine when and where to use RFID to achieve a return on investment.
By Mark Roberti
Dec 02, 2005—RFID is a great leveler. Regardless of size or industry, all retailers, manufacturers and distributors face the same challenge: how to decide which RFID applications will likely deliver tangible benefits with which products. Given the cost of hardware, software and integration, it's critical that companies—including those that are mainly trying to meet customers' tagging mandates—find ways to make their investment pay off.

Until recently, the business case for deploying RFID—in particular, Electronic Product Code technologies—in the open supply chain has been based on theory. But a few early adopters have completed pilots and discovered that there are applications that can deliver a return on investment. Each company is different, and so the business case for each is different, but one thing they all agree on is the importance of taking a systematic approach to deploying RFID.

After the benefits from one use case are confirmed, examine how the same infrastructure could be applied to other use cases.

Many of these early adopters are members of EPCglobal's Pilot and Implementation Working Group, which recently published the "EPCglobal RFID Implementation Cookbook," to help companies deploy RFID successfully. The cookbook says there are five phases of EPC adoption companies should follow: investigate, experiment, trial, pilot and deploy. Investigation involves learning the basics of RFID. Experiment covers setting up a lab, purchasing tags and interrogators, and getting some hands-on experience. Then it's time to do a field trial to identify potential business applications—or "use cases" in EPCglobal parlance—and gain practical knowledge in real-world environments. After the field trial, companies need to put out a request for proposal, choose their hardware and software vendors and launch a pilot, to work out any kinks and prepare for the final deployment.

In many ways, it's the field trial that will provide the key insights that will determine whether it makes sense to set up a pilot and eventually deploy EPC for that use case. "You can combine the investigate and experiment phases, but the field trial is something you can't shortcut," says Nancy Tai, IT manager of innovation R&D at Georgia-Pacific Corp. and cochair of the Pilot and Implementation Working Group. "In the field trial, you aren't just playing with the technology, you are testing it with conveyors, palletizers and dock doors. It's critical to use the trial to identify problems and resolve them before moving on to a preproduction pilot."

The Pilot and Implementation Working Group developed a set of steps companies should take during each phase of adoption. Below are the 10 steps you should follow during the critical field trial phase. If you take a disciplined approach, you'll increase your chance of getting valuable information from the field trial—information that will enable you to determine whether a specific application will deliver an ROI.

1. Define potential use cases.
There are many potential use cases, such as a reduction in out-of-stocks for fast-moving items, that lead to an increase in sales for the manufacturer and/or retailers involved. A use case also could be an increase in asset utilization or a reduction in counterfeit items reaching legitimate retail outlets.

"You have to start with the end in mind—what are you trying to prove?" says Steve Rehling, director of RFID systems at Procter & Gamble and cochair of EPCglobal's Software Action Group. "In the lingo of EPCglobal, that means starting out with a clear understanding of what use cases you are trying to test or learn about."

Most early adopters have formed cross-functional teams to evaluate potential use cases. "You need to have resources from logistics, operations, IT, engineering, customer relations, and you need a strong RFID project manager," says Tai. "You also will need input from finance for capital budgets and ties to corporate strategy, procurement, public relations, legal and even human resources because you don't want to train people in RFID and then lose them."

2. Analyze the current business processes involved for each specific use case.
Companies need to break down the way they are doing things today, analyze gaps or weaknesses in those processes and examine how they might be addressed, given the ability to gather RFID data at key points in those processes.

For manufacturers of high-value products, one business case might be reducing diversion of goods within the supply chain. It's possible that goods are being diverted when pallets are broken down, transferred from one node in the supply chain or handed off to a third-party logistics provider. It might be too expensive and time-consuming to scan bar codes at each of these points, but it might be possible to set up RFID interrogators to confirm what specific cases were transferred within the supply chain. That way, if those cases are diverted, it is possible to trace back and find the last person or facility that handled them.
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