RFID: Hit or Myth?
(From Baseline Magazine.) Reality is dawning on WalMart's top 100 suppliers who must comply to the companies mandate of using RFID tags on their products by 2006. 2004 is the year a lot of those suppliers will kick off projects to look at how they will comply with WalMart's wishes -- and there are hurdles. First one is ROI. Is there really any financial benefits to implementing RFID technology -- especially at the product level. A lot of companies, and even the US Defense Department has bought into the pallet level tracking -- but where's the benefit of product level? For one thing, RFID tags are still a little too expensive to implement en masse. The early adopters are usually the ones who pay the price to make an item a commodity -- they're also the ones who are in the risky position of perhaps not hitting their ROI. There is already established barcode technology in use to track products -- and barcodes haven't hit the end of their lifespan as yet. New symbologies are constantly being dreamed up to pack more information into that small space. Another risk for the early adopters: standards. There aren't any yet. Eventually, the competing standards will reduce down to a few -- which ones are you willing to bet on today? The other hurdle is the technology. The laws of physics can't be remade. Radio waves don't travel well through certain things -- take liquid for example. Try tagging a can of soup. There are ways to go, and I doubt that WalMart will be successful by 2006. Give the industry a decade or so, and things might be different.
(From Baseline Magazine.) Reality is dawning on WalMart's top 100 suppliers who must comply to the companies mandate of using RFID tags on their products by 2006. 2004 is the year a lot of those suppliers will kick off projects to look at how they will comply with WalMart's wishes -- and there are hurdles. First one is ROI. Is there really any financial benefits to implementing RFID technology -- especially at the product level. A lot of companies, and even the US Defense Department has bought into the pallet level tracking -- but where's the benefit of product level? For one thing, RFID tags are still a little too expensive to implement en masse. The early adopters are usually the ones who pay the price to make an item a commodity -- they're also the ones who are in the risky position of perhaps not hitting their ROI. There is already established barcode technology in use to track products -- and barcodes haven't hit the end of their lifespan as yet. New symbologies are constantly being dreamed up to pack more information into that small space. Another risk for the early adopters: standards. There aren't any yet. Eventually, the competing standards will reduce down to a few -- which ones are you willing to bet on today? The other hurdle is the technology. The laws of physics can't be remade. Radio waves don't travel well through certain things -- take liquid for example. Try tagging a can of soup. There are ways to go, and I doubt that WalMart will be successful by 2006. Give the industry a decade or so, and things might be different.
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