Keep RFID Projects Manageable To Ensure Success

Written by: Sharon Barnes, CEO, RFind

Active RFID (radio frequency identification) and RTLS (real-time location system) hold a lot of potential for organizations looking to reduce costs or improve quality. This potential leads many operations managers astray simply because there is so much that can be done and so many options. Often what occurs is that active RFID and RTLS projects grow so large and have so many objectives that the project becomes unmanageable and the opportunities for success are slowly whittled away.

There is a better way to implement RFID and RTLS that can increase your chances of earning a high return on investment on the project. However, it will take some planning and a determination to avoid feature and scope creep. The first step is to identify everything that you want to accomplish. For example:

• Reduce the time the test driver spends looking for a particular machine
• Ensure that every item passes through several inspection points before being loaded onto a truck for delivery
• Balance a production line to increase throughput
• Ensure delivery of product to the production line when it is needed.

These are just a few projects where RFID and RTLS can play a key role. However, there are key costs that many people forget to consider when initiating these projects. Therefore, the second step is to determine what the cost is for not only the RFID or RTLS technology, but also other components that may be necessary to develop a turnkey system. Other costs may include third-party hardware and software (e.g. handheld computers, RFID printers, yard management software, etc.) as well as system integration services. There are also several internal labor costs to consider such as wiring the hardware into the facility, IT services for installing the equipment on internal networks, and general project management and maintenance. Many times, the cost of the RFID or RTLS technology itself is only a small portion of the overall costs of the entire project, so this step is critical. Gaining a full understanding of all the costs involved in an RFID or RTLS project will require all internal stakeholders to identify the costs they will incur once the initiative is put into action. This process will involve discussions with the IT department, facilities managers, and operational personnel. Each of these departments will have its own specific costs associated with the project, and it will also need to be a supporting member of the project team in order for the project to be successful. By getting all of these parties involved early, cooperation is increased, and future roadblocks are removed before they can gain strength.

Once all potential costs are accounted for, the next step is to gain a full understanding of the expected value an RFID or RTLS system can add to your organization. This process involves documenting all the potential cost savings a solution can deliver (e.g. labor savings, reduced holding costs, increased production throughput, lower shipment and equipment costs, etc.). Remember, the savings must be related to the key objective and assumes that the key objective is met. Temptation is often high at this point to try and combine distinct projects immediately in an attempt to maximize ROI. However, succumbing to this temptation is a key reason why many projects fail. This is because the complexity begins to creep upward at an exponential rate due to:

• Unknown process interfaces
• Misalignment of the objectives and goals of each individual component
• The introduction of requirements that are in conflict and require compromise or complete rework.

By keeping projects separated, they can be evaluated on their own merits, and the true ROI can be determined more easily. In many cases, combining projects causes one project to have a diminished ROI while the other experiences an unwarranted boost.
By taking these two key steps, you will be able to create a list of smaller projects that can be prioritized based on true ROI and benefit. You will then be able to execute a smaller project that will allow you to test and evaluate your chosen technology, knowing that you will be able to achieve your ROI on that one project. Once an initial project proves successful, the remainder of your project wish list can be examined and executed in sequence — one step at a time. My experience has shown that small, targeted projects yield higher ROIs with lower risks. The rollout of these smaller projects into larger projects also yields much higher success rates.

For more information on RFind, visit www.rfind.com.