Radio frequency identification (RFID) technology has become reliable and efficient with the potential of leading to significant cost-savings, but is not being adopted as fast as it should.
This is the view of Ian Scott, senior business consultant at SAP in the UK, who ascribes the slow adoption rate to various factors.
"The main problem with RFID is that the technology has leaped ahead of business thinking, which has resulted in a slight cooling in the UK," says Scott.
"People are also an issue because it is difficult to change people's perceptions and the way they work," he continues.
While Scott agrees that change management has an important role to play in any transition to RFID-enabled systems, he disagrees that it is difficult to establish a business case for using the technology.
"It is dead easy to find a business case for RFID, but there is a need to change the way we measure efficiency and return on investment and use new metrics like shelf availability because the traditional metrics no longer apply," he says.
Scott points out that RFID systems are particularly useful at the palette and case level in warehouse environments for tracking and locating items, automating processes, reducing training requirements, prioritising tasks, and enabling real-time data collection and response.
"Anyone thinking about running a warehouse without RFID would be very strange or unusual," he comments. However, Scott emphasises that RFID is not a universal solution and is likely to co-exist with bar coding, voice picking and other technologies for years to come.
According to Scott, it is only through effective collaboration in supply chains that the full potential of RFID-enabled systems will be achieved in terms of visibility to enable business to respond to as well as forecast demand.
Test RFID implementations by SAP in the UK have shown that introduction of RFID tagging as early on in the supply chain as possible improves the cost-effectiveness of the technology by expanding the data collection opportunities.
However, Scott points out that goods manufacturers are unwilling to bear the cost of RFID tagging for the benefit of retailers. "Failure to find a way of sharing the RFID costs and benefits among all the members of a supply chain is another reason adoption is being delayed," he says.
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