Retailers and suppliers still face RFID frustrations
reveals that many retailers are still finding problems and
frustrations when trying to implement the technology at a grass
rootslevel.
"There's no cookie-cutter approach to RFID," said ABI Research analyst Sara Shah.
Indeed ABI's study found that RFID manufacturers - many of them relatively new companies - don't understand retail; and many retailers don't understand how RFID can benefit them. This leaves them frustrated and slows down market adoption, the research company reports.
Entitled The RFID Retail Market, the report examines how retailers are adopting RFID and the ways they will realise a return on investment, as well as the possible business process changes it will entail.
"Wal-Mart's approach is creative," says Shah. "It's very worthwhile for them, which is why they're pushing forward on schedule. Other retailers follow, thinking that Wal-Mart's business case will apply just as well to them. But it may not work, because every business and every supply chain is different."
This means that many retailers turn to their usual consulting companies - often one of the largest half-dozen. But big consultants are rarely early adopters of new technologies; they are normally content to let ideas mature before getting involved. They are often less creative and imaginative, ABI says.
The report echoes the sentiments of a recent panel discussion at the recent Softworld Supply Chain event, which argued that a perceived lack of standards and an unrealistic understanding of cost implications are still hindering the adoption of RFID technology amongst many organisations.
According to the panel, press hype and high profile RFID implementation projects have resulted in businesses dismissing the technology due to preconceptions, when there could be a legitimate business case.
The panel argued that prices are in fact reducing, and that this year is a good year to start pilot projects due to the standards already developed such as EPCglobal. In addition, the panel agreed that the benefits of RFID are not purely limited to the retail sector as many organisations believe, and that other industry sectors can benefit greatly from this technology.
Both the ABI study and the Softworld Supply Chain panel agree that beyond supply chain management, nobody knows how many ways RFID can be used.Known applications include security & 'backdoor theft' prevention, contactless payments, advertising and promotions. Shah advises retailers to consider smaller consulting firms, where they'll find people who can find new ways to use RFID.
Unfortunately, she adds, one of the drawbacks is that many of those small creative integrators lack the resources to execute system-wide rollouts for large clients.
But RFID technology could be used to tackle a whole number of issues such as livestock and food traceability in the face of new laws. New mandatory requirements within the EU require the complete traceability of the food chain from processing to transport, storage and distribution. A guidance document lays down detailed implementing rules for operators.
"Many organisations dismiss this technology without proper investigation," said panelist Nigel Montgomery. "ROI is not simply about cost reduction, it should also be about what the technology enables you to do that you couldn't do before."
For example, the tags provide companies with potentially valuable information on their supply chains and their customers' preferences, along with the obvious benefits of better tracking and management of assets. In addition, RFID could lead to reduced labour costs and reduced inventory stockouts.
And from ABI's research it seems evident that, for their part, RFID vendors need to educate themselves about retailing, and to develop solutions to retailers' problems, not just one-size-fits-all products.
