RFID should address specific business needs

By Staff -- Modern Materials Handling, 10/1/2005

Instead of implementing RFID for the sake of enhancing a company's technology infrastructure, it should be used to address a targeted business issue. So says Pam Stegeman, author of a report detailing RFID implementation, its benefits and drawbacks.

Stegeman, the vice president for the Grocery Manufacturers of America, Inc., suggests that companies—both big and small—should investigate "whether RFID makes sense for them through running a business case." Understanding the costs associated with the technology, and how RFID can enhance one's operation are key ideals to establish prior to beta testing, she says.

The report, "EPC/RFID implementation in the CPG Industry", explores 24 large companies' business cases that had already helped the suppliers determine the benefits and drawbacks of RFID. The cases established that RFID tags would be used only at the pallet and case level.

Stegeman concludes that among other benefits, the companies saw reduced retailer claims, a decrease in inventory and fewer out of stock items. Yet, while the benefits were seen throughout the scrutinized industry sectors, certain results varied greatly by product—another factor to consider prior to testing, Stegeman adds.

And while the benefits for many companies were substantial, Stegeman warns that RFID implementation is not a simple process. "This is not a plug-and-play technology at this point," she says. "RFID and EPC may have limited advantages for those companies that have a good bar code tracking system already established."