July 2005 | Commentary | IT Matters

The RFID Revolution: Desperately Seeking Standards

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Radio frequency identification (RFID) is about much more than Wal-Mart. The world's largest retailer may have singlehandedly caused the intense publicity that surrounds the technology, as it forced suppliers around the globe to scramble to comply with its strict RFID mandate. The real issues, however, extend far beyond Wal-Mart's four walls.

RFID is fundamentally changing the way organizations conduct business. Indeed, the RFID revolution is already in progress. But several hurdles, such as the lack of standards governing its use in supply chain and logistics applications, and confusion about how best to implement and utilize the technology, block RFID's wide-scale adoption.

RFID as Value-Driver

RFID is not new, it is simply a new phenomenon in the supply chain. Despite the recent hype, the technology has been around since World War II. Companies are only now starting to look at RFID to drive value across their organizations—particularly through the supply chain.

By transforming business processes to fully leverage RFID, companies with RFID-enabled applications are empowering the next wave of productivity and accuracy in their supply chains. RFID users need to choose solutions enabling them to decipher and leverage the valuable information RFID tags collect. The subsequent effective use of this RFID-generated data will help reap efficiencies throughout the supply chain and fulfillment process.

Many large players such as Sun, Microsoft, and IBM have stepped up to offer the computing power necessary to run tags, readers, and other RFID technology. A company cannot expect to solve all its supply chain problems, however, by simply slapping tags on pallets, or turning on a reader in the warehouse.

A carefully designed, strategic approach to RFID is the most effective path to success, as RFID technology does not ascribe to the "one size fits all" scenario.

Classic logistics/fulfillment functions such as inbound delivery, inventory accuracy, delivery and returns validation, and special order assembly are the cornerstones of an effective supply chain—and they must not be ignored in the hype surrounding RFID.

Pairing these traditional logistics functions with RFID technology can be a huge value-driver for companies. This winning combination yields increased logistics management effectiveness and more efficient visibility into the supply chain.

A Dirty Little Word

One of the more serious issues to contend with along the way to RFID utopia involves a dirty little word: standards. A variety of issues associated with creating, executing, and adhering to any set of standards complicates matters.

Multiple viewpoints from varied audiences on RFID standards have led to serious backlash, preventing wide-scale adoption of any set of standards. This is compounded by the scarce enforcement of necessary compliance issues.

The end result is a divide within the industry. Clearly, standards are often a double-edged sword for those involved. Standards can hinder or further an organization depending on whether the standards it follows are truly recognized, and whether the company chooses to adhere to mandates. The outcome is anyone's guess, leaving some businesses too skeptical and/or cynical to consider future RFID initiatives.

The lack of standards needed for RFID's successful and ubiquitous adoption is a huge roadblock. Despite the significant need for a governing body to oversee standards, to date, only a fragmented set of standards bodies exist—such as EPCglobal, ISO, and, to some extent, the Department of Defense (DoD).

A successful standards board needs to carefully maneuver the idiosyncrasies of RFID, adopting standards around data, business processes, reader and middleware software, application software, and item and container tagging.

In addition to a standards organization, a certification organization responsible for validating pallet, container, and item readability—with 100-percent readability as the goal—is essential.

A variety of possible factors hinder readability, including vendor compatibility, frequency of use, antenna positioning, item cartonization, pallet build, exposure period, and specific tagging rules for particular items. Anything less than 100-percent RFID readability is not viable enough for the business community at large to hang its hat on.

Without certification standards, RFID will evoke more processes than necessary. Instead of streamlining activities, for example, receiving docks and portals are burdened with RFID's residual effects.

Is there any good news? Yes. Standards are evolving. Major players such as Wal-Mart and the DoD have learned they cannot assume that workers are scanning the tags accurately.

No matter how the standards battle progresses, RFID's true ROI will not be realized by simply replacing bar codes. Organizations will only reap benefits from RFID if they transform their business processes and think beyond the Wal-Mart frenzy.

By evaluating corporate objectives, as well as the ramifications caused by adoption or denial of RFID standards, organizations will ultimately have to decide when the RFID revolution is right for them.

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