The Year Ahead: Reasons for Optimism

By Mark Roberti

Out of crisis will come renewal, as companies transform themselves with the help of RFID and other technologies.


Last week, the United States celebrated the swearing in of a new president with a remarkable sense of hope and optimism. President Barack Obama, in his inaugural address, stated, “The challenges we face are real. They are serious, and they are many.” But he quickly added, “Know this, America—they will be met.”

President Obama also called for Americans to come together to renew the country. “Our workers are no less productive than when this crisis began,” he maintained. “Our minds are no less inventive, our goods and services no less needed than they were last week, or last month, or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions—that time has surely passed. Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.”

As countries around the world struggle with the current economic downturn, it is worth reflecting on these powerful words. It is through remaking government departments, individual companies and so forth that we will remake our nations.

That is why I continue to find reason for hope and optimism. IBM has been running a commercial that says, “We can build a smarter planet—smarter cities, smarter towns, smarter government, smarter retail, smarter shipping, smarter airports, smarter food supplies, smarter hospitals…” I enjoy that commercial, because the optimist in me believes we surely can build smarter hospitals, airports, stores and, yes, even governments—and I believe that this is the time to do it.

Times are tough, to be sure—but adversity forces companies and organizations to rethink the way they do things. When sales are rising, we tend to have more tolerance for inefficiencies in our supply chain, suboptimal processes in our manufacturing operations and employee theft in our stores. When sales decline, however, we take a hard look at every dark corner of our company, and we seek ways to improve everything we can.

At present, businesses are suffering from paralysis. They have no idea what will happen with the global banking system and the economy, so they are reluctant to do anything. No one wants to commit to bold new ventures, because no one knows what tomorrow will bring. That fear will pass, though, and companies will eventually realize that slower sales are the new norm—at least for the next 18 to 24 months.

Some companies will undoubtedly fail, but most will begin searching for ways to add value to their products by making them smarter. They will look for viable methods to cut costs in their supply chains by making them smarter. They will seek our better options for serving customers by making their own people smarter. And out of this effort will arise new ideas, new products and new ways of conducting business that will benefit those companies and their customers in the long term.

That’s why I am also optimistic for the near- and long-term future of radio frequency identification. RFID and other technologies can help companies achieve such goals, by enabling them to better measure what they do, as well as monitor waste, manage assets and tools, reduce costs and improve processes. Investments might be smaller than in previous years, but they will be more focused on delivering real results.

VDC Research Group recently forecast that sales of RFID hardware, software and services will grow by approximately 9 percent from 2008 levels. Some reports have portrayed this as a huge negative in light of the fact that the RFID market had previously grown by 30 percent a year. However, there are many industries—automotive, financial, retail and others—that would be ecstatic at a 10 percent growth in the current, stagnant economy. The fact that companies would invest $4 billion in RFID during these tough economic times is a sign that many firms understand the value of the technology.

I do think we might see the growth ramp back up toward the end of this year, as more companies realize they need to reduce costs and streamline processes in order to stay viable and position themselves for the future. It’s interesting that although Sam’s Club has announced plans to revisit timelines for tracking sellable units with RFID (see Sam’s Club Provides Clarity on EPC RFID Plans, Sam’s Club Reduces Tagging Fee and What the Sam’s Club Announcement Means), the retailer has indicated it will roll out pallet-tracking applications to all of its stores in 2010, and seems on track for item-level applications in 2011. In other words, Sam’s is moving forward, not sitting still. It’s taking a bold step to transfer the customer experience by automating checkout and creating smarter retail.

Last week, we held our RFID in Health Care conference in Las Vegas. At the event, a number of end users discussed how they are employing RFID to improve their operations. These companies and organizations are building smarter hospitals. And in April, we will hold our big annual conference and exhibition, RFID Journal LIVE!, at which dozens of end users in a wide range of industries will explain how they are building smarter factories, supply chains, government agencies, data centers and much more.

As Barack Obama said during his acceptance speech, our problems “will not be met easily, or in a short span of time.” And he’s right—we can not build a smarter world overnight, and it can’t be done without hard work and the courage to try new things. But I believe we will rise to the occasion and transform our companies—and in doing so, we will emerge from this crisis smarter, and with a stronger global economy.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark’s opinions, visit the RFID Journal Blog or click here.