Feb 01, 2010We all "got" the Internet intuitively—computers connected to computers let everyone share information and images online. Radio frequency identification technologies have been harder to understand. Some have called RFID tags "bar codes on steroids" in an attempt to sum up what they do. But RFID does much more than identify cases and pallets in warehouses or items at checkout counters. It can be used to control access to buildings, facilitate small financial transactions, authenticate goods and automate business processes.
Perhaps the single most important thing RFID does for businesses is to provide visibility into areas of operations not visible previously. For the first time, companies can know the location—and state—of their assets, employees, inventory, tools, vehicles and so on. Armed with this information, they have the ability to manage these parts of their businesses in ways never before possible.
Yet this benefit hasn't been widely grasped. That's partly because most CEOs either don't know how much money is being wasted in these areas of their businesses, or they assume nothing can be done about it at a reasonable cost. And it's partly because they simply don't get RFID. For instance, many still assume RFID is more expensive than bar codes.
But as our cover story reveals, the word is getting out that RFID data can be analyzed to provide meaningful answers to complex business questions. Some early adopters—in particular, those in the apparel retail, health care and manufacturing sectors—are reaping the benefits of RFID visibility. In addition, RFID solutions are finally catching up with the technology's potential, making it easier and more cost-effective to deploy.
The automobile industry, hammered by the global recession, is being forced to identify—and remedy—operational inefficiencies. In our Vertical Focus, we look at how auto manufacturers and distributors are turning to RFID to better manage parts inventories, tools and critical assets, enabling them to cut costs and improve quality control.
Middleware is a good example of how RFID technology has evolved to provide more business value. Today, the software—often called the glue that holds RFID systems together—does more than just manage hardware, and collect and filter data. Our feature, "A Guide to RFID Middleware," explains how companies can use these applications to gain business insights from the RFID data they gather.
What will it take for more CEOs to see the light? It's hard to say. Maybe some will learn from the visionaries who already understand RFID and the value of visibility. For others, it may take a long time because visibility comes in stages, not overnight—companies tend to start by tracking just a small number of assets. And some may not get it until it's too late, because their competitors adopted RFID and achieved a significant cost advantage. RFID Journal, meanwhile, will keep the focus on visibility and the business value it enables.
Photograph: Tom Hurst