Finally RFID started bearing fruits and how

Back in 2005, on a sunny sunday, I was going for my weekly grocery shopping in Budapest when I saw the giant new electronic bill board getting lot more attention from people around. I found some employees of a local company using that new billboard to advertise their RFID Capabilities and they were engaging people with the help of few sets of shoes that they were offering people to wear after registering their name with them and take a round of the shops around for few minutes. When anybody wearing those shoes used to pass the bilboard, it used to flash his or her name on the billboard like: Welcome to XXXX (Company Name), Mr. XXXX. It was quite fun for people, specially for children and youth to wear those shoes and walk around to see their names on the billboard again and again. Upon enquiring, I was told that this is the pwer of RFID technology and this company offers multiple products harnessing RFID power. Though, RFID started showing head in 2003 in most markets (Largely as a result of mandates from retail market leaders, notably Wal-Mart), it was my first 1st hand experience with RFID technology and to say the least, I was impressed.
I wondered what is in store for this technology and how warehouses and retail markets can track the movement of goods in and out with this, reducing manual intervention and improving accuracy. RFID showed lot of promise and lot of companies started investing in providing services in this field to be ready for future explosion in demand. We saw Wal-Mart persuading (or compel) its primary suppliers to tag everything under the sun with RFID. Wal-Mart would then use RFID tag readers and ancillary hardware and software to manage supply chains, retail stocks and costs more effectively. Similar mandates were seen from the U.S. Department of Defense (DoD), which reportedly planned to use RFID to manage and deploy assets more efficiently. The future had something else in mind and till last year, the growth in this field was snail pace and it nearly became a subsiding trend where service providers were no more investing. The costs of RFID enablement were higher than anticipated, and the inability or unwillingness of companies (including Wal Mart suppliers) to bear those costs were the main reasons of trend not picking up as expected. The nail in the coffin was the strong presence of bar codes that ensured that the primary benefits of RFID are met with much less costs. Well, barcodes cannot do everything RFID can do but nor can RFID do all of the things barcodes can do so these needed to co-exist.
Some months back, BGN, the Netherlands' largest book retailer who was one of the early adopters of RFID, claimed that they could improve their inventory visibility from 65% to 97.5% by using an RFID Solution. Also it has increased receiving accuracy to 100% while dramatically reducing employee inventory time. Most importantly, BGN had significantly increased sales as well. Similarly, more examples of improvement in Inventory levels and accuracy started coming from aroundthe world and when the technology advances in RFID complimented it (Like tag readers are now faster and more accurate and can operate over a greater range of distance, angle and environment), the new wave of optimism started sweeping the space again. Year 2009 (April onwards) saw a spike again in the RFID demand and even the smaller warehouses are now looking for cost effective solutions in this technology to reap benefits in terms of inventory optimization. After all, RFID isn't really about tags, readers, frequencies or wavelengths, although all these things matter. RFID delivers the greatest business value when its focus is on the generation and leverage of real-time, fully integrated data that enables better business decisions and nimbler business actions. If all organizations drive their RFID deployements on above reasons instead of just wanting to utilize a trendy tagging solution that automates the stock movement tracking, this technology will go much far and will begin to realize its true potential in near future.

1 comment:

  1. I join you in accepting that RFID has eveloved over a period of time and when my organization spent on this a year and a half back, our focus was to reduce the pilferage of goods (We are a large european apparel retailer) from the stores. But, as you said, the byproduct benefits (that were actually bigger than the main benefit) in terms of inventory visibility and better optimization fast took over as the main usage reason for this technology.



Your thoughts are welcome