Israel: RFID: "Ready For Industry Deployment" or "Rosy Fantasy In Disguise"?

Last Updated: 13 December 2004
Article by Wally Klatch

Judging by the amount of ink, both real and virtual, that has been used to write about RFID you would think it is the most widespread, the most useful, the most all-curing logistics remedy that can be found – the business-technology version of patent medicine. One carnival barker after another proclaims its many wondrous benefits wrapped in snappy high-tech verbiage.

Some of the biggest gorilla customers have made their vendors an offer they can’t refuse to implement RFID, but for the other 23 million businesses in the US there is some fine print that is often overlooked, if it is printed on the patent medicine bottle at all. The fine print says whether RFID stands for "Ready For Industry Deployment" or for "Rosy Fantasy In Disguise" – is RFID real or fluff, something that can benefit you or just an invitation to a fool’s club of people who strive mightily for an objective that leaves little to show in terms of real benefits.

Even more important than this question is a more serious one – is the whole RFID media-spasm a placebo that is offered in place of real solutions that offer real benefits, but that are lost in the tag/reader/active/passive/frequency noise that RFID is generating? If a company focuses on its true needs and looks at available solutions can it meet those needs completely and effectively without ever touching an RFID tag? To use master con artist Frank Abagnale’s memorable image from before the 2004 Bosox era, why do the Yankees always win? Because its opponents are always distracted by the pinstripes – when you take your eye off the ball, in either sports or logistics, the result is clear.

RFID Stands For …

A close look at RFID reveals that on the technology curve RFID is more akin to the very first pocket calculators that sold for $1,500 (including four functions – addition, subtraction, multiplication, and division!) than to the do-everything pocket calculators that come in cereal boxes today. The thicket of issues related to RFID starts almost as soon as you approach the topic. There’s a webinar-a-week on the hoops you have to jump through to make an ROI case for implementing and operating RFID, and participating in those sessions leads to things you don’t read about in the everyday RFID missives. The standards for RFID haven’t really been set yet so you can’t really know whether upcoming changes will impact your investment – whether the ½" socket you buy today will work with the ¾" bolts that will become the standard tomorrow. How often do we hear about the interference problems that the metal or liquid components of the products that are tagged with RFID cause, and then there’s that little carton-at-the-center-of-the-pallet problem that seems to have popped up. And the environmental/health impact of all those transmitters and antennas in the work area? We’ll get to that after we get this thing working. And it turns out that tag read accuracy isn’t exactly the 100% we had expected it to be, although we are assured that it is a number that is fairly close to that. In short, the RFID hoo-hah gives nothing like a fair assessment of where RFID is at or how useful or cost-beneficial it will actually be for any particular company.

Standing in for RFID …

The current obsession with RFID has focused on a fairly narrow set of technologies including RFID tags and RFID readers. The relatively low number of implementations, long timeframe for adoption, and difficulty in achieving acceptable ROI are all an outcome of the focus on the specific technologies that are commonly referred to as "RFID".

In many ways the technology of RFID has become a diversion. What’s missing is a clear vision of the business/operational problems that "RFID" is intended to solve, and alternatives to standard-paradigm RFID that can solve those problems. There are current approaches and techniques that can "do RFID" much faster, at much lower cost, and in some cases much more effectively than tag/reader RFID.

The first step is to create a crystal-clear definition of what problem you are trying to solve. Is it inventory accuracy? Many companies have long since achieved very high inventory accuracy levels, although the RFID argument says that the cost of maintaining those levels – the manual reporting of inventory movement – can be reduced. Perhaps that is true in some cases, but in other situations it is not just the fact that a carton moves that is reported, but also the order number that it is moved against, the person who moves it, etc. For situations in which other data must be captured in any case, the incremental cost of capturing the product number as well is very small. RFID must be evaluated not against what RFID is capable of doing, but against what the company needs done.

A second step is to determine whether other techniques or technologies can achieve the same results as RFID – or better – for less cost and effort. Using supply chain for liquids and other flow products as an example, current monitoring techniques and the proper combination of technology, equipment, and procedures can achieve all of the benefits of RFID with virtually none of the drawbacks of RFID. An overview of this approach is found at www.SupplyChainForLiquids.com and detailed in the book "Supply Chain for Liquids®: Out-of-the-Box Approaches to Liquid Logistics" published by CRC Press. Other instead-of-RFID techniques involve measuring the quantity of product being held or moved based on its weight, volume, or other characteristics that may be measured using existing technologies and fed into back-end information systems to gain the same benefits that RFID offers. And although RFID proponents are quick to point out the line-of-sight limitations of barcode labels versus RFID tags, the replacement of barcode processes that work and are providing continual payback with an RFID system should be weighed very carefully prior to proceeding.

Wrapping It Up

The common discussions of RFID that center around tag-and-reader capabilities are wrong in both directions. First, RFID is a solution, but first you need to clearly define what the problem is before even thinking about a solution – it doesn’t do any good to bring in a solution to something that’s not a problem. Second, the popular presentation of RFID as a single very specific approach involving RFID tags and readers ignores many other approaches and methods that in many instances provide better results faster and cheaper that what is today termed "RFID". Make sure you know what your illness is, if you are ill at all, before going out and buying "Dr. Techno’s RFID Elixir for Sure-Fire Logistics Health". Like the patent medicine customers of old, you may find the reality to be far short of the rosy fantasy that the pitchman promises.

AUTHOR’S BACKGROUND:

Wally Klatch has over 25 years experience in industry both as a management consultant with global and regional consulting firms and in executive positions of production and distribution firms. His book Supply Chain for Liquids®: Out-of-the-Box Approaches to Liquid Logistics is part of the St. Lucie Press Series on Resource Management.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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