September 16, 2005
RFID do's and donts
Even though RFID has been around for several years, interest in the technology has grown tremendously through the nineties, particularly in field of operations and logistics. RFID offers scope for inventory management, reducing pilferage and shrinkage, better labor utilization, fewer instances of out-of-stock, etc. However, it is important that the promise of RFID be realized in a systematic manner. This means that the benefits of RFID should not be overestimated and a slap and ship implementation should be avoided.
It is possible for companies to let their buying decisions be influenced by vendorspeak, vendors who have invested heavily in the technology may try to hardsell it. Conversely, vendors who may not see a real benefit with RFID can get forced to employ it because their clients want it. Before blocking capital into RFID, a company must be aware of its requirements and explore other options that may be cheaper and more flexible. Technologies such as GPS and bar codes also have their uses and very often can be used in a complementary manner to RFID.
Look at RFID as a strategic enabler and not just an application with a quick and high ROI. A company must try to strike a balance between paralysis by analysis at one extreme and plumbing for the most expensive technology at the other. RFID is more than an IT implementation issue with software and hardware requirements. It impacts the way business operates. There is an increase in automation, the data provided by RFID can even lead to a paradigm shift in the company's focus. Therefore existing business practices should be reviewed to gauge preparedness for RFID implementation. Let the primary drivers for your RFID implementation be your business needs, strike a balance to fulfill the needs of your vendors and customers but do not let their priorities overwhelm you.
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