Look at the big picture to leverage RFID costs

By Staff -- Modern Materials Handling, 10/1/2004

While meeting RFID mandates from Wal-Mart and others, many companies are finding it difficult to justify the cost of implementing the technology to identify and track their products. At the recent ARC Strategy Forum, supply chain management service director Steve Banker offered a suggestion on how to find a return on investment for a new RFID system.

The key, he says, is to link the implementation of an RFID system to bigger initiatives within the company, such as data synchronization. For example, if a retailer is unaware that a product has been discontinued, it will continue to place orders for those products. Oftentimes, the distributor will send nothing or replacement products in return.

Those practices cost both parties time and money. An RFID system tied into a global data registry will improve relationships by alerting customers when products have been discontinued. In turn, other products can be ordered without delay.