One-Year Payback On RFID By 2008?

April 10, 2006
In some cases, it will be possible to achieve a one-year payback on RFID by 2008, according to DiamondCluster International, a Chiago-based management consulting firm. The firm compared various estimates for RFID market growth against conservative return ...

In some cases, it will be possible to achieve a one-year payback on RFID by 2008, according to DiamondCluster International, a Chiago-based management consulting firm. The firm compared various estimates for RFID market growth against conservative return on investment scenarios to reach this conclusion.

"Companies in the health services, particularly pharmaceutical drug makers, high-value consumer goods like electronics and apparel, some select retail channels, transportation and government agencies are where we'll see the greatest success in the near term," said Daring Ug, DiamondCluster partner and co-author of a new report, "Achieving RFID's Full Potential."

DiamondCluster recommends a few action steps than companies can take to both mitigate the hidden costs of RFID and to ensure that RFID investments are well spent:

  • Reaffirm your strategy. Will rapid RFID adoption define the winners and losers in your industry? Is it part of the cost of doing business with your partners or customers?
  • Reassess the readiness of your IT infrastructure. Connectivity and infrastructure costs can account for more than 50% of an RFID investment. That financial burden of building out the existing infrastructure can undercut any potential savings RFID might ultimately provide.
  • Look to improve processes. RFID should be viewed as an opportunity to make long overdue process improvements than can increase competitiveness. RFID leaders can exert influence on their value chain partners to reengineer cumbersome processes that are costing both parties time and money. In any case, overlaying RFID on outmoded, inefficient processes is a case of good money after bad.

To view the report in .pdf format visit: http://www.diamondcluster.com/Ideas/Viewpoint/PDF/RFID_DiamondCluster.pdf

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