Winning RFID solutions

The future of RFID in the supply chain is solutions, not technology.

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 5/7/2007

Picking the winning companies in an emerging technology is always a gamble.

But a panel of analysts speaking to investors at RFID Journal Live last week in Orlando rolled the dice and predicted the winners will be those that offer software and total solutions, not just hardware and tags.

It’s all about the data
“Hardware and tags are being commoditized,” said panelist Mike Liard, research director for RFID and contactless at ABI Research. “The companies making money are systems integrators and software providers who can provide a total solution that meets end user requirements.”

That’s because RFID is producing unprecedented amounts of data that has to be sifted and analyzed before end users can improve their processes and derive value. Hardware and tags alone aren’t up to that task.

OATSystems and TrueDemand, two software companies, made those same points in presentations to RFID investors and later to Modern.

OATSystems on solving business problems
“The biggest change in the RFID industry in the last few years is that we have moved away from selling technology,” Paul Cataldo, OAT’s vice president of marketing, told us. “Our customers want to solve business problems and enable things they couldn’t do before.”

In that sense, Cataldo described RFID as “an enabling technology that lets you do things that you couldn’t do before, like automatically follow a product as it moves through the supply chain. A solution is what sits on top of the RFID and allows you to take advantage of the technology.”

The problems end users are looking at solving depend on where those companies stand in the supply chain, Cataldo added.

Industrial manufacturers, for instance, are focusing on tracking assets and work-in-process, using a combination of active and semi-active tags as well as WiFi technology. Retailers, on the other hand, are focusing on the store, with solutions around item-level availability on the floor, real-time promotion execution, and rapid cycle counts, especially around high-end merchandise where the cost of RFID infrastructure can be justified.

TrueDemand’s free offer
Eric Peters, TrueDemand’s CEO, is also focused on helping customers improve processes with RFID, especially in the retail supply chain.

“CPG manufacturers and suppliers to retailers are spending millions to get RFID up and running to comply with mandates,” said Peters. “That money would be better spent on using that data to analyze their businesses and improve their processes.”

To help jumpstart RFID in the supply chain, TrueDemand is taking a novel approach and making the basic features of its software solutions available for free over a hosted site online. “We’re ready for the next phase of RFID investment, and we think that the ability to figure out an ROI shouldn’t be something you pay a consultant for,” Peters said.

Through its hosted service, TrueDemand will make available 10 different analytic reports around processes like RFID transit times and promotions executions. Users can put their data on a disk and send it to TrueDemand, or upload it through a virtual private network. TrueDemand will run it through their system and send back the results.

“End users will get exposure to the basic technology,” says Peters. “And, they’ll see if they’re getting a return or not from RFID. We believe that if we can spur value and expose ways to improve processes, we can spur more investment in RFID solutions.”