Getting Started With RFID

While bar codes took more than 25 years to evolve, RFID is being adopted quickly in the marketplace.

By 2007, RFID technology budgets will double, RFID tag purchases will reach 1.6 billion, and 83 percent of today’s pilots will convert to full-scale implementations, predicts Accenture’s global management consulting and technology team.

In a 2005 interview with 25 executives of leading companies, Accenture identified common approaches to implementing RFID. Based on insight derived from those interviews, Joe Dunlap, a senior manager in Accenture’s supply chain management practice, offers the following 10 tips for getting started with RFID.

1. Understand the business commitment required. RFID has the potential to transform the value chain by allowing seamless communication from suppliers all the way to end consumers. To build this capacity, companies must understand the technology’s potential and make a commitment—both financial and managerial—to its implementation. This commitment means your whole company should be involved. An RFID implementation is not a technology project, it’s a company-wide project.

2. Don’t look for a quick fix. Once you commit to implementing RFID, understand that you are in it for the long haul. An RFID overlay will not pay off. Don’t try to fit the system into your business; rather, analyze and adjust your business processes to optimize implementation results. To achieve positive return on investment (ROI), companies need to leverage RFID technology to re-engineer their business processes.

3. Help executive sponsors see the potential. Executive management must understand RFID’s impact. Implementing RFID is an investment that involves a continual improvement process. In the early stages, companies sometimes view RFID as a narrow technology development effort. To succeed, you need to involve a broad range of people up and down the supply chain. This collaboration ensures that RFID is continually connected to processes and commercial outcomes, and provides a venue to show upper management what the technology does.

4. Collaborate with your trading partners. An RFID implementation that spans trading partner networks, and facilitates product shipping and data exchange using common standards and practices, offers the greatest benefits. Full-powered RFID is an interdependent technology. Instilling such collaboration from the beginning will speed adoption.

5. Pinpoint business benefits by implementing pilots. Pilots should be live implementations that give you the chance to weather some potentially rough storms. Start small, roll out in stages, and know that every RFID installation is unique. A one-size-fits-all solution does not exist. Once you understand the RFID concept, you need to get your hands dirty—try it out. Gather data during the pilot to find out what works and what doesn’t.

6. Use pilots to increase your knowledge. Live pilots help companies build experience and learn safety tips. The pilot may prove or disprove your initial theories about using RFID, but the true value of the business case for an RFID application will emerge. The Gillette Company, for example, enabled its Venus razor packaging line, order assembly, and product shipping processes with RFID. The pilot was large enough to be meaningful, but also involved batch processes, limiting disruptions to the company as it went through the learning process.

7. Focus on your unique product and supply chain. Companies concerned with asset tracking may focus on different applications than companies seeking supply chain visibility, product authentication, or potential new efficiencies. Understand your products and what you are trying to achieve with RFID. Your unique business case will shape the direction you should take with your implementation.

8. Pay close attention to your results, and innovate. After implementing RFID, you can measure its benefits and report on the business case from real experience using the technology. Allow yourself time to accommodate unexpected results. One consumer products company, for example, used metal containers during its pilot and found the metal interfered with the system’s efficiency. To solve the problem, its engineers put weather-stripping between the tag and the metal. You have to be flexible and willing to innovate.

9. Don’t assume technological problems are insurmountable. If you hit a technology bump, climb over it. Sometimes the solution will be unique to your products. Be creative. CHEP, a pallet and container pooling services company, for example, discovered that for certain items, it had to change the antenna’s design to meet the requirements of the chip it was using.

10. Recognize that ROI may not be what you thought. Flexibility is key when seeking ROI. Use RFID data to evaluate what you have learned about the flow of goods—apart from what you expected to learn—and re-engineer your processes to reflect that.RFID provides ample incoming data—using it effectively is the biggest opportunity for your company. The greatest ROI comes from turning data into information, and information into action.

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