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Take RFID Away From the CIO

The IT department should not be overseeing your RFID efforts—at least not yet.
By Bob Violino
Apr 20, 2004—By Marshall Kay

Many companies have turned to the CIO to lead their cross-enterprise RFID programs. The question is: Why? For the next three years, the pressing challenges will be found on the shop floor, in the loading bay and on the backs of trucks. So program leadership should initially be assigned to manufacturing, packaging or logistics, with the IT department playing a supporting role. After the company clears the physics and process design hurdles, the lead role can then be given to the CIO.

The key issues today are not network bandwidth, security and data management. Those issues will come to the fore in two or three years. The big questions now are: How do you make sure you’re reading all the tags on pallets and cases with a high degree of accuracy and reliability? Do you need to install shielding around machinery that emits electromagnetic interference? Can you apply tags without slowing down your production line? And do you need to reengineer your business processes to take advantage of RFID?

Assuming that IT managers understand the nuts and bolts of an RFID implementation is like assuming that a disc jockey knows how to ride a horse. I don’t mean to bash CIOs. After all, supply chain specialists don’t understand the IT component. But things go awry when people make decisions outside their realm of knowledge, and at this stage—with the exception of a few notable IT leaders—it’s the IT department that’s outside of its realm.

The danger comes when supply chain decisions are made by IT directors with no understanding of the complexity of these problems. In one instance, an IT manager selected a vendor to supply tags for small bottles because that vendor’s tag complied with Wal-Mart’s requirements. The packaging people soon discovered that the tag was larger than the existing label on the bottle and therefore useless.

These “decision makers” are approaching RFID the same way they approach the purchase of a new voicemail system. They seem to view RFID products and services as commodities, when in fact there’s astonishing variability in the quality of products and implementation expertise on the market today.

Data synchronization is job one
IT does have an important role to play: getting internal systems and electronic catalogs ready for a broad RFID deployment. IT managers should also upgrade their company’s AS2 Internet electronic data interchange and global data synchronization capabilities. This has also been mandated by Wal-Mart. Without data synchronization, RFID would serve only to speed up the flow of bad data and therefore would be pointless. Most companies are far behind schedule on both of these fronts; giving the IT department control of an RFID project will only make matters worse.

The CIO will be in a position to take over the RFID system once all the readers are installed properly, the interference issues overcome and the business processes changed. At that point, the focus of the deployment shifts from reading tags to capitalizing on the wealth of highly accurate, real-time data that RFID systems will be providing. That’s when CIOs take over and earn their stripes.

Marshall Kay is VP of business development at ePC Group, an international advisory firm specializing in RFID implementations.
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