Two months ago, I used this space to put in perspective where radio frequency identification (RFID) really stands. As you may recall, I said that this emerging information technology for identifying and tracking inventory across the supply chain has been hyped into the stratosphere. Much of that has to do with Wal-Mart requiring its top 100 suppliers to use RFID on shipments to the retailer by January 2005. And while that deadline is a watershed in the evolution of RFID, it will not by itself vault the technology into a preeminent position, and obsolete bar codes in short order.

Then I went to Frontline's Supply Chain Week in mid-September. And I'm happy to say I heard sanity in people's views of RFID and its immediate future. As you may have already read in First (page 3), Steve Halliday and others are pointing out how bar codes and RFID complement each other.

Even among suppliers of RFID systems and components, there was an understanding that this technology is not going to take over the world in the blink of an eye. Some were questioning if Wal-Mart will be able to stay true to its ambitious schedule, which calls for all of its suppliers to be on board with RFID by 1/06.

Then someone said the two words I had not yet heard applied to RFID – business case. Now we're talking real sanity. Mesmerized by the Wal-Mart mandate, too many people have forgotten that the technology must lead to new, quantifiable efficiencies to be used on a broad scale. Remember green packaging and how far that went without generating other benefits?

I find it unlikely that Wal-Mart is going to rush to tell everyone how much RFID is streamlining its operations. Each company will have to do its own digging to make the business case for the technology. And ultimately, the business case, which will be the true measure of success, will rest on how much RFID improves materials handling and other processes.

That is what made one conversation I had at Frontline so disturbing. It was with an IS manager from a Tier 1 automotive supplier. He was at the show to find an RFID system. Then someone asked him what he knew of his company's manufacturing processes. Nothing. Worse yet, there wasn't even a glimmer that RFID was anything more than one more information-based technology to be added to the network.

So far, most of the focus on RFID has been on the technology. It's now time to turn our attention to the ways that it will allow companies to change processes and achieve unprecedented handling and operating efficiencies. Without that pot of gold, RFID's rainbow will fade pretty quickly.