RFID Has Its Challenges and Opportunities

In the last issue of Excellence we discussed the fact that RFID is here to stay. However it has its challenges and opportunities, which are just beginning to be realized. Most efforts thus far have been focused on meeting the customer mandates of tagging cases and pallets at the production line or shipping point. This has naturally placed most of the emphasis on the physical location of the hardware to make sure it will properly work.

Companies that have begun adopting RFID understand that to realize the expected business benefits they are going to have to reengineer business processes and their supply chains. This requires flexibility and significant collaboration with partners across their extended supply chains. RFID standards must continue to be established and leveraged by all participants in order for that to work.

RFID deployments are not "one size" fits all. Companies are realizing that just about every deployment is unique and cannot simply be duplicated across lines or sites. This is due to varying processes, lines, set ups, applications, equipment, environments, etc. There are also large streams of data that must be analyzed in order to react appropriately. Key applications companies will being to integrate RFID with include: Business Intelligence, ERP, Inventory Management, Automatic Data Collection, Transportation Management and Warehouse Management.

A June 2006 Aberdeen Group report titled, The RFID Benchmark Report , states that "over half of all respondents will have integrated RFID technology with their manufacturing and material handling systems over the next 24 months." Aberdeen recommends the following steps for the average adopter to successfully deploy RFID:

1. Platform for process flexibility is increasingly important.
   With the high level of process variability reported in this category, adopting an infrastructure platform that can integrate into operational applications and provide workflow configuration is essential. Evaluate alternatives based on the strategic direction of your company.
   
   
2. Broaden the scope of RFID deployments.
   Look beyond the immediate need that RFID is meeting. Now is the time to start planning on the use of edge technologies to create sustainable competitive advantage. Having both enterprise and edge infrastructure in place allows companies to propagate the use of RFID and other similar technologies throughout the enterprise with minimal invasiveness.
   
   
3. Standardize operating practices both inside and outside of the enterprise.
   Average adopters reported the highest percent of process variability among all survey respondents. No technology can be infinitely flexible, and at some point this variability begins to cause operations to become inefficient with no corresponding value returned. It makes good management sense and benefits the business standardize as much as possible.

QAD is committed to assisting our customers in finding the right RFID solutions for the right purposes. RFID is not a one size fits all technology. We are working with our data collection partners and our customers to integrate RFID into QAD applications and business processes. If you would like additional information, please contact Greg Rodgers at ggr@qad.com.