While the radio frequency identification (RFID) industry irons out its kinks, such as the nagging need for a frequency standard, even pessimistic observers, analysts and consultants predict that it will be a very large business in the near future.
Even after ABI Research dropped its revenue projection for RFID software and services by 15% in August last year, it still expects the industry to be worth over $3 billion a year.
But RFID will only deliver the expected boon to companies if they are aware of and cater for its Achilles heel.
Some of the world`s largest retailers, like the US`s Wal-Mart and Marks & Spencer, have been running RFID pilot projects for some time now, with varying degrees of success.
Wireless Healthcare reports that many in the pharmaceutical industry are keen to get aboard the RFID wagon. Procter & Gamble has, by its own account, successfully implemented RFID in the supply chain.RFID benefits include:
* Reduced warehouse and distribution labour costs;
* Reduced point-of-sale labour costs;
* Reduced inventory;
* Improved forecasting and planning;
* Reduced theft;
* Improved stock keeping levels; and
* Improved customer experience.
But, reports Silicon.com: "Only one in three (29%) of UK respondents to a BEA Systems-sponsored survey said they could clearly see the benefits of RFID. Thirty-six percent felt the technology has no benefits, 24% were not quite sure of the benefits and 10% had no idea.”
It continued to state that: "Six out of 10 said integration and data management would be the biggest issue for RFID implementations."
And therein lies the rub.
According to HighBeam Research, Lawrence Hutter, DTT global consumer business leader at Deloitte Touche Tohmatsu, said that, to succeed, RFID projects must be fortified by good and consistent data.
Ventana Research confirms in a report on DMReview: "Initiatives such as global data synchronisation (GDS) and radio frequency identification (RFID) will fail if product data quality is not addressed."
Good product data quality underpins successful RFID projects. Product data quality most often goes awry when product lines expand and when they cross geographic boundaries, divisions and operating companies.
Shell Lubricants` global product catalogue is a well known data quality case study. The company needed to standardise products across geographies, generate a single global product list and rationalise the global product portfolio and product development.
In response, it created a master data warehouse to power the single catalogue with a standardised global product portfolio that accommodated local variance.
It did that through implementing a global data strategy. A study by Metadata recently found that 85% of companies have no data strategy at all. Master data management (MDM) in combination with a data governance programme is the key to successful RFID projects.
RFID systems dealing with poor quality data will only exacerbate the problem and, since they`re automated and offer speedier resolution, will achieve it quickly.
Data problems manifest themselves in different ways: for example, more than one brochure is produced for a new product, multiple product codes are generated for single products or companies retain too much inventory.
Best-case scenarios will have poor data quality linked to RFID systems result in minor inefficiencies and at worst, lead to accounting irregularities. With new accounting and reporting regulations being enforced across the Western world, that could mean jail time for executives.
It is a problem for companies to ensure that internal and external data users obtain current information where and how they need it. A successful MDM programme gives them that quality data view and, more importantly, a process to monitor the quality over time.
Any successful MDM programme requires three components: technology, processes and people. Having the correct custodians who can bring the right business knowledge to bear on the programme is as critical as having the correct technology components to build the system based on the correct processes. Master data management is essentially a business issue and should be driven by people who understand business, the organisation and who use technology as an aid.
Failure to comply results in business becoming yet another statistic. And a recent IDC report shows US companies alone already lose $616 million every year to poor quality data.
By Paul van Aswegen, GM of Informatica SA
Informatica Corporation is a leading provider of data integration software. Using Informatica products, companies can access, integrate, visualise, and audit their enterprise information assets to help improve business performance, increase customer profitability, streamline supply chain operations and proactively manage regulatory compliance. More than 2 000 companies worldwide rely on Informatica for their end-to-end enterprise data integration needs. For more information, visit www.informatica.com, or call 011 462 9676.
Informatica South Africa
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