Which Industries Should Adopt RFID and Why?

 

The selection of RFID use within an industry or an individual firm will affect the tools, applications, and development process used by that organization. Organizations should consider some internal aspects to determine whether an investment in creating an RFID infrastructure will be worthwhile. Some indicators include: 

 Complexity of supply chain

 Geographical size of area with tracked items

 Inventory system importance and cost structure

 Physical environment surrounding infrastructure including temperature, dust, cleanliness, sunlight and other natural factors.

 Relevance of tracked data to customer and various internal departments

 Any firm answering "high level" of importance to three or more of these points is a serious candidate for the adoption of RFID. The rising use of RFID in corporate America has resulted in new applications and tools that facilitate all criteria named above.

The advent of standards within networks and operating systems (i.e. the Internet and Windows) allows the information gathered from RFID to be leveraged in ways unforeseen in the past. For example, UPS can use RFID to improve customer service while streamlining internal operations. Due to standards developments, the data gathered from the RFID system can simultaneously be used to update relevant internal systems (such as accounting, etc.) while providing customers the exact location of their package via UPS.com. Instead of using bar codes that are limited in scope of tracking to physical locations with scanning equipment, the tracking process can become continuous, specific, and fluid.

 

The most important consideration in determining whether and when to implement RFID technology may be the progress of standards development in the relevant industry. Generally, a competent manager in any industry might consider:

 Standards development among RFID hardware manufacturers

 Standards development among data gathering software developers

 Standards development among systems integration software platforms

 Standards development among selection of Operating Systems

 A competent manager must be able to gauge progress in all of these critical areas. Developments within these areas will cause a shift in business process and must therefore be tracked meticulously.

For example, a competent manager in the beverage bottling industry would consider whether RFID standards had yet been developed (or were close to being completed) for the beverage bottling industry that would allow for a sufficient return on the significant capital investment of creating an RFID infrastructure.

Likewise, in the hardware manufacturing industry, a standard coded ISO 11784/85 has been a recent topic for debate. Standardizing communication between hardware components creates open standards affecting current royalty and patent structures. The complexity of the current legal layout makes ISO negotiations cumbersome and slows progress. A competent manager in the hardware industry will be aware of the ISO debate and understand the potential and ramifications of ISO progress onto his company's business landscape. This understanding will help him to determine whether and when to adopt RFID technology.

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