Magazine Article | February 1, 2006

RFID And Global Data Synchronization

Source: Innovative Retail Technologies

Are they kissing cousins or strange bedfellows?

Integrated Solutions For Retailers, February 2006

Every minute and every penny you're about to invest in RFID (radio frequency identification) is in jeopardy if you overlook some fundamental realities. For all its future promise and all its sexy claims, RFID is pitifully dependent on several foundational factors.

If you've recently had occasion to speak with one of the many enthusiastic proponents of RFID about the potential future impact it will have on your business, you've likely felt as if you've been talking about something akin to the second coming. You've likely seen the impressive pictures showing how a dozen RFID chips can fit on the letter "D" (indicating the Denver mint) on a dime. You've probably marveled at the hundreds of reads that an RFID reader can execute each minute. And, you probably shook your head in amazement at the impressive volumes of data that are expected to be accumulated as companies begin to scan and collect data on the movement of their products using RFID.

There's no denying it. In all fairness to the misty-eyed, sweaty-lipped prognosticators of technological potential, RFID does indeed have the ability to deliver far-reaching positive consequences for our world if — and only if — it is implemented and applied properly. Our world will be forever favorably changed if we do this right. If you're at all concerned about the location of things in the physical world, then RFID may be your new best friend. If you regularly concern yourself with the impact of time on the movement of goods, then RFID has the potential to be the best thing in your world since sliced bread. And, if business metrics such as inventory turns, working capital days, stock-out percentages, perfect orders, and theft prevention are part of how you measure success, then you have every reason to believe that RFID may be the most potent weapon to come along in many years.

Reap The Rewards Of RFID
You can have perfect read rates, pristine data filtering and storage, and timely and secure information sharing, and you can still fail miserably at RFID. Long after you've gotten past the technical challenges of chip types/placement, readers, data storage/access, etc., there are several critical dependencies that — if ignored — will not only directly undermine the benefits you can expect to accrue from RFID, but likely negate its positive impact all together.

At its very foundation, RFID benefit is dependent on internal and external (i.e. multi-enterprise) information integrity. If the item you're tracking is known by different IDs in various parts of your organization or between you and your value chain partners, then you'll know exactly where the item is, but you'll not be able to agree on what the item is. This chink in the armor will directly negate the ability of RFID to help you identify and recover from such critical exceptions that drive stock-outs. RFID's benefit is dependent on internal and external (i.e. multi-enterprise) process alignment. Said differently, the use of RFID information identifies when/where some anticipated event has failed to occur on time. The degree to which this newfound knowledge is beneficial is directly dependent on your — and your value chain partners' — ability to respond to that realization in a sufficiently timely manner to lessen or preferably eliminate the negative impact of that exception. Without proper internal or external process alignment, forewarning of any soon-to-be calamity will be for naught.

Finally, the ultimate benefits you accrue from RFID are dependent on what you do with the information once it's made available. For far too many organizations, this consideration falls well outside the intended scope of their RFID projects. Learn more on this up-and-coming technology online at