Move Beyond RFID Compliance

When Jan. 1, 2005 arrives, many suppliers to Wal-Mart and the DoD (Department of Defense) may well be compliant with the organizations' RFID (radio frequency identification) mandates. It's safe to say, however, that none of those suppliers will be truly internalizing the smart label technology and reaping the huge potential benefits of RFID. That will come much later. At this point, most suppliers are implementing different levels of the slap-and-ship strategy - applying an RFID-compliant tag to pallets and cases before loading the truck headed to designated Wal-Mart DCs (distribution centers). It's a costly strategy that offers compliance, but no ROI.

Justifying a full-scale investment in RFID technology means preparing for a full-blown deployment. Slap-and-ship strategies are a stopgap measure. Ultimately, suppliers need to integrate RFID data into multiple back end systems within their own enterprises and share that data with partners and customers via Web portals and other interfaces. At this stage of the RFID conversation, enterprises typically contact trusted partners for advice and integration expertise. It's a natural first reaction. An integration partner helped deploy your current bar code-based data collection system. RFID seems to be a logical - and much more complex - extension.

There's much more to consider with an RFID deployment than you ever encountered with your traditional data collection systems. From a technological standpoint, RFID standards, products, and performance continue to evolve. In terms of your business processes, RFID will have a profound impact. The right integration partner can help you avoid landmines along the way. But choose the right partner, because the path to deploying smart label technology is both long and winding.

The Many Flavors Of RFID
The hype around RFID has led end users to explore the technology and how it might benefit their companies. During this process, there have been a couple of realizations. First, RFID is perfectly suited for many enterprises and they can deploy the technology and expect a reasonable ROI. Second, the previous scenario has little to do with the Wal-Mart and DoD mandates.

Unbeknownst to many end users, some forms of RFID technology have been operating flawlessly in enterprises for years. The recent mandates address UHF (ultra high frequency) deployments of RFID. However, 13.56 MHz, low frequency, and active RFID tags have been used in businesses for years. "It really comes as news to many companies. They want to know how they can benefit from Wal-Mart's initiative for a closed-loop, asset tracking app they are considering," says George Rethy, CEO of Mobile and RFID Data Systems, Inc. (Markham, Ontario). "In fact, UHF technology is not the right choice for that application. They should be considering 13.56 MHz, which is relatively mature and offers a clear ROI. They're surprised when they hear that. But, it's a pleasant surprise."

If a rising tide does lift all ships, then the swirl of activity around UHF technology has led to increased awareness of other forms of RFID. In asset tracking, for instance, 13.56 MHz tags are used to track items ranging from pallets to expensive tools. Active RFID tags have been deployed in many applications for years. A good choice for animal tracking and port security, for example, these tags are commonly used in harsh conditions or where required read ranges are long. "If there are no benefits behind a technology, then all you have left is hype. And, end users don't buy hype," states Rethy. "By thoroughly exploring all of the RFID options available, companies are discovering that the technology is widely deployed and it offers ROI."

Have A Vision Before Acting
As companies move toward compliance, RFID moves from pilot projects to production. During this transition, many companies will stub their collective toes. According to Kevin Ashton, vice president of marketing at ThingMagic (Cambridge, MA), three common implementation mistakes are starting to emerge. First, companies are focusing on the physics of RFID technology more than the business integration aspects of the technology. "Businesses operate in a digital world, and RFID needs to work seamlessly in that environment. The front end needs to be integrated tightly with the back end. The data on RFID tags needs to be used in a host of applications. Companies can't lose focus of this imperative," states Ashton. "It's easy to get consumed with the physics of the technology. But, that's not the end game."

The second issue deals with the scalability of RFID as it is being deployed. "Users should deploy RFID with the idea that the technology will be used pervasively at the company. It might not reach that point for a long time, but companies should implement a solution that can scale to that magnitude," says Ashton. It might be decades before RFID replaces bar codes, for example, but companies should plan for that possibility. Scalability will be a big issue as RFID technology evolves. And, technology that doesn't scale appropriately may need to be replaced.

The final issue facing companies deploying RFID centers on procurement practices. In most cases, large end user companies are counting on comparatively small companies to deliver RFID technology. "There are no warehouses filled with RFID hardware. Small companies can't afford to hold vast inventories. Also, innovation is happening so quickly, no vendor wants a distribution center filled with obsolete products," says Ashton. "The message to end user companies is that procurement will be vital to the success of integration projects."

Companies don't have to work in a vacuum. However, don't let an amiable business partnership prevent you from asking tough questions about your partner's skills and expertise regarding RFID.