RFID Strategy -- Lessons Learned From A 3PL Business Case

In this month's column, I'd like to talk about an RFID implementation project recently completed by Deluxe Media Services and the "lessons learned" from it. Deluxe distributes DVD's for the Hollywood studios involved in the Wal-Mart RFID compliance initiative. The goals for their project were as follows:

  • Provide RFID labeling as a value-add service for their client.
  • Create minimal disruptions or modifications to existing systems.

    Bob Thompson, senior vice president of Supply Chain Services and Strategic Planning, the executive in charge of this project had a six-month window to roll out the RFID service. Bob and project manager Jeff Nelson, director of operations development for Deluxe, put together a cross-functional team that consisted of an executive project owner, functional managers, vendor partners, and an integration consultant. The project is now operational and has met all goals. Three of the major "lessons learned" are presented below.

    Lesson #1: Educate Your Associates

    We have all read newspaper stories or seen television reports about the privacy and security implications of RFID tags ("Will a tin-foil hat keep Wal-Mart from reading your mind? Film at 11!"). These articles typically refer to some of the more blue-sky projections for what may be possible in 10 year's time; nevertheless, they can cause some internal resistance to any RFID project.

    The RFID process team quickly realized that there were lots of conflicting opinions about their project within their own organization. The team solved this problem by building training into the project from the earliest planning stages. Lead by training manager Lara Frystak, they held meetings and published internal newsletters to spread the word on the Wal-Mart initiative and the importance of this service to their business as a 3PL. The result was a clear understanding of the project across the entire team.

    Lesson #2: Stay Current With Evolving Technology

    The technology selection originally focused on 64-bit tags due to concerns about availability of the 96-bit tags in sufficient quantities. As the project moved forward, however, this concern over availability was overcome by the tag vendor. As the project rolled through testing and go-live, it became obvious that switching to 96-bit technology would be better to do early, due to the pending requirements from other retailers specifying the 96-bit tags. The raw read-rate of the 96-bit tags was much improved over previous experience with 64-bit tags. The read-rate at the shipping dock of the 96-bit tags exceeded 90%. Upstream at the printer, the encoding and read verification exceeded 95%. The difference between these two numbers represents the need to perform process verification, instead of simply relying on the printer to do your verification for you.

    Overall, the team noted that the accuracy of RFID data has improved by leaps and bounds from January through May of this year. The key lesson is: keep your eye on the trends and customer requirements evolution within this rapidly developing technology!

    Lesson #3: Do Not Underestimate Resources

    Reflecting on this project, I heard several team members say, "You only get back what you put into it" as their chief comment on RFID technology. For Deluxe, the RFID project met their primary goal of value-added customer service. It also provided them with a way of differentiating themselves in the competition for business: they can do RFID, while many of their competitors cannot. They achieved this goal by allocating the correct mix of resources to the project team, and gaining the necessary level of executive sponsorship. In their opinion, the days of "as cheap as possible compliance" are numbered as the volume requirements rapidly increase for RFID-tagged products.

    Stay tuned. In future columns, I plan to revisit this project to keep tabs on how the RFID rollout affects ongoing operations.

    Paul Faber is a Principal with Raleigh, N.C.-based Tompkins Associates, a supply-chain-solutions consulting firm. As the chief manager of RFID equipment implementation at Tompkins Emerging Technology Center, he possesses extensive experience in material handling solutions, systems integration, and installation. Paul has managed field integration and operations activities at material handling sites around the world.


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