Even though the use of radio frequency identification
(RFID) technology can help firms recapture top-line revenues and
improve bottom-line,deriving value
from RFID-driven supply chains remains a challenge, according to a new survey from Forrester.
The industry analyst believes that over the past several years,
RFID technology has matured beyond experimental lab testing into a
technically viable solution for
tracking the physical location of products, assets, and even
people in a wide variety of operating environments.
Among these various applications, says Forrester, employing RFID
for supply chain visibility has generated particular excitement as
business process and applications professionals envision the
technology’s potential to
transform how products move from factories to warehouses and
finally into customer stores.
Yet, intriguingly, Forrester poses the questions as to whether
deploying RFID for supply chain visibility actually does make
business sense. It believes that firms facing this question often
wrestle with a few industry-centric parameters that can widely
affect the business viability of their initiative, including: scope
of the required tagging level; economics of tag cost relative to
item value; position and relationship in the supply chain.
Forrester is advising firms that given these tremendous
variations in scope, economics, and supply chain perspectives, it
is imperative that business process and applications professionals
objectively evaluate the financial impact on the business when
considering the adoption of RFID for supply chain visibility as
opposed to older systems such as bar codes. IT concludes that
companies use a total economic impact model to systematically
consider benefits, costs and risks.