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No Free Lunches With RFID

We must balance the cost of information with improvement in decisions and actions.
By Duncan McFarlane
Dec 01, 2010—I frequently find myself at meetings—both academic and industrial—where discussions center on the availability of vast amounts of "free" information that simply needs to be mined or processed appropriately to reveal great business "nuggets."

No doubt we can access huge amounts of data with increasing ease, but that free information is generally not the information we want. And even if the information we need were free in monetary terms, it wouldn't be free in terms of energy. Information and communication technologies are some of the planet's great carbon dioxide producers, forecast to surpass air travel in that regard in several years.

We need to accept the fact that there's a cost for any information we gather, so we must understand that data's value before we commit to collecting it. In this respect, RFID is no different from any other information source.

In the RFID gold rush early this century, mandates often outweighed the need for any cost-value analysis. Then, as the situation inevitably tightened, RFID's value dropped to a cost-reduction calculation—either labor force or inventory reduction—for which simple cost-benefit analyses could determine payback on investment. Now, organizations are using RFID to address more complex benefits. For example:

• How can we achieve more certainty about the arrival of baggage at an aircraft, and enable determination of optimal take-off time?

• Can a real-time location system increase confidence in the location of tools in a factory and reduce production delays?

• Is it possible to reduce the risk of out-of-stocks in a supermarket with RFID-driven reordering?

• How can we decrease the chance of using the wrong replacement part?
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