Why End Users Should Discuss Their RFID Deployments

By Mark Roberti

If the RFID market flourishes, companies will achieve greater benefits.

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Recently, I criticized providers of radio frequency identification technology for missteps that prevent them from selling solutions and growing the market (see RFID Fantasies and How to Grow the RFID Market, Part 1 and Part 2). The truth is, some end users are also making decisions that not only prevent the technology from spreading faster, but are contrary to their own interests.

I’m thinking mainly of end-user companies that place blanket bans on discussing their deployments and refuse to talk about them because they believe RFID delivers a competitive advantage that needs to remain a secret. Such strategies are counterproductive and prevent businesses from achieving greater benefits, and from being viewed by customers and analysts as efficient and forward-thinking.

If you are a retailer, for example, it is more efficient to have all of your suppliers RFID-tagging at the source, so you won’t have to place tags on items arriving at your distribution center. But if you refuse to talk about how you use RFID to manage in-store inventory, then other retailers will assume adoption is not progressing and will not move forward with their own projects. That, in turn, discourages more suppliers from tagging at the source.

Even if you control your own supply chain as a vertically integrated retailer, it still makes sense to promote adoption because wider adoption drives down the cost of tags and readers. Speaking in London at our recent RFID Journal LIVE! Europe conference, Richard Jenkins, Marks & Spencer‘s head of RFID strategic development, said he hoped all retailers would use RFID “because that will make my tags cheaper” (see Marks & Spencer Expands RFID to All Its Stores).

Many manufacturers are in the same boat. Take Airbus, which has been very public about many of its RFID projects (see RFID Takes Airbus to New Heights of Efficiency and Airbus Leads the Way). The airplane manufacturer wants to encourage suppliers to put tags on airplane parts so it can track them, and RFID can also be used to maintain an aircraft after it is sold. While Airbus wants to use the technology to reduce the cost of assembling its airplanes, it knows that it sells planes based on size, fuel efficiency, reliability, comfort, total cost of ownership and many other factors.

No one ever bought a plane because Airbus uses RFID, or a suit because Marks & Spencer does so. That is not to diminish the value radio frequency identification can deliver, or to say that a company should reveal all purposes to which it is employing the technology. I’m fairly certain that Airbus utilizes RFID in some innovative ways it has not yet shared. But the point is that companies compete on value, quality, price and other criteria, not on their use of technology.

Many end-user companies in myriad industries understand that refusing to talk about a deployment as a policy doesn’t make sense. They speak at our LIVE! events in Europe, the United States and Brazil, as well as at our targeted events for the health-care, energy, mining and construction industries. In addition, RFID Journal regularly publishes news stories and case studies about various RFID deployments. These firms share the benefits they are achieving, whether it’s cutting costs, boosting efficiencies, improving safety or delivering better customer service.

Just a few days ago, The New York Times published a story about Macy’s corporate strategy to tailor merchandise at each of its 789 stores nationwide (see For Macy’s, a Makeover on 34th Street). At the retailer’s flagship store location in New York, the company is using RFID to enhance customer service within its shoe department—and, it hopes, to “inspire some couch potatoes, accustomed to ordering their footwear from Zappos.com, to come into the store.”

A greater number of stories about RFID deployments will spur adoption—which, in turn, will lead to lower technology costs. RFID providers will be able to innovate, which will lead to improved products and new solutions. Industry groups will be able to develop standards, which will facilitate deployments.

The bottom line is that RFID can support the way you do business, but it’s your corporate strategy that gives you the competitive edge. End-user companies focused on where and how to use new technologies to their advantage will not lose their edge if others know what they do.

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, the Editor’s Note archive or RFID Connect.