Jan 31, 2005The question of whether RFID can deliver a return on investment has been batted around a lot lately. There has been far less discussion about the importance of vision and the need to plan for the future. That’s why I’m glad Metro CIO Zygmunt Mierdorf and Tesco CIO Colin Cobain both addressed this issue during a press conference at the recent National Retail Federation conference and exhibition in New York.
"This is the biggest step change in five to ten years," said Tesco’s Cobain. "The future has arrived. We will track high-value, high-shrink items through our supply chain. That will give us improved on-shelf availability of products. It will make our processes simpler and our data more accurate, and the reduced shrink will save Tesco money."
When asked about the fact that read rates aren't 100 percent on certain items or for certain applications, Cobain said: "We're focusing on what you can do today rather than on what you can't. We understand what doesn’t work, and we're not spending a lot of effort trying to make it work. The technology will improve. If it doesn’t work today [for a particular product or application], we'll wait six months. If it doesn’t work then, wait another six months. It will get there."
Metro’s Mierdorf was asked about a study by the Grocery Manufacturers of America (GMA), which indicated there was no ROI for manufacturers on many products. "The GMA study lacks an end-to-end view of RFID," he responded. "You have to look into your supply chain. Start with raw materials and track them through your operation all the way to the store. They might not have fully understood that their part of the supply chain is as important as our part of the supply chain."
He added: "We all need to apply vision to our business. If we didn't do anything unless we knew exactly what the outcome would be, then human beings would still be sitting in trees trying to eat coconuts. Companies need to change their attitude, take more risk and be more entrepreneurial to make the vision a reality."
Cobain agreed: "Until people believe that this is the way the future will be, they will not be doing the right thing." He said tone reason why the Gen 2 standard is important is it gives companies confidence that the technology they invest in will be the one that's widely adopted.
With each passing week, it becomes clearer that RFID is "the way of the future." Analysts may tell you to wait. Your board members may want to see the ROI. But in the end, CEOs need to understand that the world is changing, and each week they wait to deploy RFID is one less week they have to prepare for the future.
I don't believe companies should deploy technology just for the sake of being on the cutting edge or because it's cool. Companies should only deploy technology that advances their interests—and it’s in every company’s interest to plan for the future, to ensure that it can compete as effectively tomorrow as it can today. That may mean investing money that doesn't deliver a return but enables survival. If RFID is going to be used widely in the supply chain one day, it seems to me that smart companies would want to be at the front of the learning curve to get the benefits before competitors eat their lunch.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below.