Infrastructure
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9/8/2004
09:04 AM
Gene Alvarez
Gene Alvarez
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A Guide To Key Decision Points On RFID Pilot Tests

Risk factors, scope of testing, and insourcing/outsourcing are all critical decisions that companies must make as they embark on pilot tests that precede RFID deployments.

One of the most popular--and timely--radio-frequency identification topics in retailer and supplier circles is RFID pilot tests. The topic also extends to areas such as airline maintenance, baggage control, automotive asset management, and homeland security. The common question that must be asked by all types of companies: What are the winning components of a pilot?

The first challenge for an enterprise is where to have the pilot. That is, should the pilot be conducted in-house or at a testing center? There are pros and cons to both options.

Meta Group research indicates that leading-edge organizations will make decisions based on the type of risk they're willing to accept. They tend to select in-house pilots to maintain vendor independence. However, some leading-edge companies have chosen this option because at the time they embarked on an RFID strategy, there where very few, if any, RFID testing centers. Furthermore, outside testing centers can be costly because of the high demand for testing capabilities and because the equipment at these facilities is still early in its depreciation cycle.

Next, some enterprises seek to leverage the knowledge of a testing center's experience with the technology with product-related issues such as attributes (e.g., paper, liquid, metal, dense material) and with form-factor issues because RFID mandates are quickly pulling them into RFID deployments. These companies seek to short-cut some of the problems discovered by previous users of the testing center. Therefore, one key selection criteria will be the number of previous and current pilots that the facility has conducted and the findings it has recorded. Meta Group recommends that the number of products and attributes tested by the center-- not the number of customers it has--be the criterion for measuring the center.

The objectives of the pilot test itself must be an important consideration. For example, one enterprise may choose to create its own pilot-test environment in a live facility (e.g., a factory or distribution center) where the production RFID technology will be used. The advantage of this approach is that the company will directly attack environmental issues related to RFID. It's in these tests that a supplier can test RFID technology on lines that are physically near each other and that present real-world challenges--such as a cell-phone tower located nearby or the closeness of doorways to metal objects such as fire hoses or extinguishers.

Another example is the use of a testing center to find the proper location of a tag on a case or pallet (and, in the future, at the item level). In this case, the enterprise identifies a selection of products on which it wants to place tags, then uses the testing center to find the proper location of the tag on the case and pallet. This tag location and orientation is important to achieving 100% read levels, as well as the speed of these read requirements.

How big the pilot should be in terms of scope is the next decision point. Should the pilot be small, medium, or large? Meta Group recommends the pilot be measured along three subcriteria at a minimum. These are:

  • The number of products (e.g., stock-keeping units) and attributes in the pilot


  • The number of locations (e.g., one distribution center, one store, or more of each)


  • The number of functions to be tested at a location (e.g., DC level inbound, outbound; store level inbound, outbound)

The schedule and breadth of the pilot is also a major decision point. Should the pilot be conservative in approach or ambitious? In some cases, the schedule has been set by a mandate, but the mandate may or may not determine the level of commitment. For example, a project that includes a limited number of SKUs to one distribution center is significantly different from one that contains all SKUs a supplier provides (in some cases, that is a large number) to the same distribution center. Furthermore, the rate of scaling after the first distribution center is "live" can determine the resources required to support the rollout to other distribution centers.

Finally, the balance of time, investment, and quality will be the greatest challenge; a company should look at RFID investments as progressing through a maturity model. We believe that enterprises will move through five phases of maturity with RFID, and we'll discuss those phases in a future report.

Gene Alvarez is VP of technology research services at Meta Group. He has 20 years of IT experience in business-impact assessment, vendor management, project management, software development, and delivery of complex business applications. He also has held positions with Nine West Group, KPMG Peat Marwick, New York Power Authority, and AT&T Communications.


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