The challenges of implementing RFID are only just starting to be recognized. Companies working under mandates are seeing increased demands for RFID tagged cases from their customers. Others are using the technology to raise the level of performance in areas such as asset management and tracking, counterfeit detection, security and supply chain visibility. Now is the time for companies to start planning to expand RFID from isolated pilots to enterprise wide use.
In AberdeenGroup's Benchmark Report, "Scaling RFID Implementations from Pilot to Production," companies revealed that growing an RFID deployment from a single-portal pilot to a network spanning multiple processes, locations and organizations is a daunting challenge. Many of those surveyed felt that expanding the use of this technology will tax the corporate infrastructures that will be asked support it.
Technical Infrastructure Determines The Operational Scale Of RFID
Scale, or the number of locations that RFID will be installed in, has significant ramifications on network, storage and security considerations. Aberdeen finds that the leading issue that greater scale requires, whether in single of multiple sites, is finding the most cost effective way to manage, monitor and control technology and process performance.
A quarter of survey respondents say that they will continue to manage readers at the site level, but a significant minority are already planning strategies to centralize control, eliminating the expense of having skilled on-site personnel at every RFID-equipped location. This strategy assumes that the complex challenges around the physics of a large deployment can be solved as the RFID network scales up. Industry has seen this year that the trial and error method used to establish one or two points within a site is untenable when planning for 15, 50, or 500 readers that will be in close proximity. The physics issue becomes an order of magnitude within such a dense reader environment.
Despite the daunting planning phases of a massive RFID deployment, best-in-class performers are banking on heightened performance in several enterprise areas as a result of the technology.
One factor that makes the decision to centralize reader control easier is the shortage of skilled RFID technical expertise, a shortage that continues to hinder further roll-outs.
Maintaining data integrity is also forcing the issue on determining the optimum approach to managing the RFID process. Again, centralization seems to be the answer, and many companies are in the process of creating one source for enterprise-wide allocation of serial numbers and a centralized management function that monitors compliance and performance.
Breadth Of RFID Deployments Are Contingent On Integration And Process Flexibility
While scale concerns itself with the management and administration of the RFID network, breadth looks at the implications of replicating a process over multiple organizations, sites and operations. The increase in breadth of RFID deployment challenges corporate integration strategies and the technology vendors that support them. Nearly half of the companies surveyed say they plan to use extensions from their ERP and warehouse management systems to manage data flow and coordination of processes throughout the enterprise. More, though, will look at alternative approaches such as the use of smart readers, network appliance and custom built applications.
Integration of various data collection technologies such as voice, bar code and manual inputs, is considered important to a large segment of survey respondents. Integration needs, however, don't stop there. Managing one process over multiple entities within an enterprise requires a high level of transparency to data and activity. Over half of the companies aggressively adopting RFID have plans in place to create control centers that will monitor performance of RFID enabled processes.
Companies Predict That The Scope Of RFID Deployments Will Cross Multiple Functions
Increased scope of RFID use presents the same challenges enterprises face when trying to integrate the multiple applications most companies find in their portfolios today.
In an earlier study, Aberdeen found that almost three-quarters of all companies use applications other than ERP for supply chain management, and that the lack of integration between these applications results in inefficiencies that drive the cost of doing business higher. With RFID, the penalty for treating each installation as its own island of information will result not only in increased costs but quickly devalues the information that the technology gathers. To fill the void, we found a large percentage of companies have already started to custom develop their own software to be better prepared to analyze and operationalize the data RFID collects.
According to survey responses, there is already significant activity underway to increase the scope of RFID deployments. A third or more of companies say they either have integrated or in the process of integrating RFID technology to warehouse and asset management applications, not surprising choices when we consider how the data is being used today. Many of our survey respondents also recognize that the data collected can be used to benefit other functions within the enterprise. Almost all of the companies surveyed plan to integrate RFID data to Business Intelligence tools over the next two years to allow functions throughout the enterprise to gain insights into business activity that go beyond day to day operations.
Over half of those surveyed also said that applications and analytical tools currently available to them are insufficient to extract the maximum benefit from the type and information RFID can deliver to them. To fill the void, a large percentage of companies have already started to custom develop their own software to be better prepared to analyze and operationalize the data RFID collects.
Scale, breadth and scope are important considerations when planning on expanding RFID deployments. Effective control and management of RFID readers, accommodating the variability in process workflow, and integration of applications and data sources are all key ingredients in planning for RFID expansion. The strategies developed for broad RFID implementation form the foundation for how companies will incorporate all "edge" technologies into the enterprise.
John Fontanella is a research director for AberdeenGroup. Established in 1988, AberdeenGroup is an independent, fact-based research firm specializing in the global, technology-driven value chain. AberdeenGroup research educates technology buyers with information to act on business and technology decisions.