Getting a Return on Your RFID Investment, Radio Frequency Identification
RFID, Radio Frequency Identification, dates back to the World War II era, when it was used to differentiate between Allied and enemy aircraft. Not until the 1970s and 1980s did widespread commercial application of RFID take hold. Such systems as highway toll collection, cattle tagging, and infant abduction protection in hospitals started the worldwide trend toward RFID. Today, companies such as Wal-Mart and Target have mandated RFID use for the movement of inventory through their distribution systems. For nearly five years many vendors of these large department stores have complied with the manadates by implementing RFID. Yet, the cost of tagging the inventory has resulted in reduced vendor profits instead of delivering the promised benefit to the bottom line. So, is there a way to realize a return on investment from incorporating an RFID system in your facility?
The tagging of assets, pallets, and cases has become standard practice in supply chain execution. Although the holy grail of RFID is to tag at the “eaches” level, the high cost of disposable passive tags is still too high to realize a return on investment. Tagging each item on the grocer’s shelves, for example, would be cost prohibitive.
For large, rigid asset tags, the prevention of tote, pallet, and cart loss has proved to be the best case for a rapid return on investment. ROI of less than 18 months is not unusual.
For printed tags or small disposable tags used at the case level, return on investment has proven elusive for adding what amounts to an expensive method of bar code scanning. However, when an RFID system is designed from the outset in a multimodal fashion, using all of the available peripherals of the mobile device that acquires the RFID and other inventory control data, a rapid ROI, often less than a year, can be expected.
Consider a multimodal system that incorporates RFID to confirm location and to track cases, voice technology to direct the worker and to accept work acknowledgments, and bar code scanning for instances when serial numbers, UPCs, or other long strings of digits are to be collected. Multimodal systems take more consulting and design up front, but save significant time and resources in the long term.
At CTG we provide multimodal software and solutions for supply chain tasks from pick, place and put operations to inventory counts, inspection and maintenance activities.
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