Experts: RFID requires business process updates

Experts at Comdex told attendees that it's impossible for businesses to take full advantage of RFID technology unless they change their business processes.

LAS VEGAS -- Though it may be a struggle for an enterprise to adjust its business processes while adding radio frequency identification (RFID) technology, a panel of experts at Comdex said that's the best way to maximize an RFID investment.

During a panel discussion at Comdex Las Vegas 2003 last week, moderator Tim Scannell, president and chief analyst with Shoreline Research in Quincy, Mass., told attendees that RFID "has the potential to have a dramatic impact on retail, manufacturing and other types of operations" if implemented carefully.

Companies such as Wal-Mart Stores Inc. have championed the technology, which employs radio-enabled microchips to track items from large pallets down to individual products. The retail giant has mandated that its 100 largest suppliers implement pallet-level RFID technology by the end of 2004.

Matt Reams, a panelist and senior technology manager with Zebra Technologies International LLC in Vernon Hills, Ill., said that, even though the technology has existed for decades in limited forms, it now presents a compelling business case.

"It's not the Holy Grail, but it's a really solid technology that can offer some real benefits," Reams said.

For instance, Reams said, his company is helping several organizations implement RFID wristbands to keep track of hospital patients and amusement park visitors. However, in order to realize the time and cost benefits associated with RFID, those groups have had to change certain business processes.

"You will never fully realize all the benefits of RFID if you don't incur some process changes as well," Reams said.

Panelist Jim Reynolds, an executive with IBM Global Services, said RFID represents an opportunity to improve business processes, which can save a company even more money than simply streamlining the supply chain.

"A slap-a-chip approach is likely to add cost to your supply chain," Reynolds said.

Scannell said that a number of enterprises are struggling to find ways to generate a quick return on investment from RFID, but the payoff will come with increased long-term productivity, he said. In fact, Scannell said that, in a few years, when the benefits become obvious, "RFID usage will be figured into the overall value of a company."

"This is something much more feature-rich than you'd get with a bar code," said Vinay Gokhale, vice president of RFID products for Seattle-based Impinj Inc. Gokhale said that RFID technology features the ability to add company- and product-specific information that bar codes can't track.

Dan Doles, CEO of Santa Clara, Calif.-based RFID vendor WhereNet Inc., said that more than 100 companies already have live RFID implementations, including Ford Motor Co., American Honda Motor Company Inc., AMR Corp., and Electronic Data Systems Corp.

"At some point in the near future, all assets that are worth managing are going to be able to identify themselves on some level [using RFID]. It's inevitable," Doles said.

Attendee Bobby Sy, systems and technology manager with Citizen Watch Company of America Inc., in Torrance, Calif., said his company is investigating whether to implement RFID in its warehouse.

"We want to be able to do inventory without opening up every one of our crates," Sy said. Still, his company is concerned about the high cost of tags, which Reams said could range from 10 cents per tag for passive tags, to as much as $75 per tag for more advanced devices that transmit sensor-based information, such as temperature readings.

FOR MORE INFORMATION:

Learn how RFID could help eliminate shipping delays and improve security.

Pose an RFID question to our expert, Tim Scannell.

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