What's Missing From RFID Tests - InformationWeek
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Commentary
11/8/2004
01:21 PM
Gene Alvarez
Gene Alvarez
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What's Missing From RFID Tests

Many RFID pilots under way don't adequately account for the impact on data-warehouse and business-intelligence apps. It's time to step back and factor in these critical metrics, or risk reducing the long-term success of RFID in your company.

Many of today's radio-frequency identification pilot projects focus on achieving 100% read rates at speeds set by bar-code technology. The center of attention for these projects is the proper tag placement on cases and pallets as well as the proper configuration of pallets to enable achievement of 100% read rates.

Integrating RFID read capabilities into enterprise applications is yet another component of a successful RFID pilot test. However, our research indicates that many of the RFID tests under way today don't include the impact of RFID on the data warehouse and business-intelligence apps. That is, the projects haven't estimated the amount of data that will be created and stored. Without these estimates, many may assume the amount of data will be equivalent to the amount generated by bar codes; other estimates are in the range of multiple terabytes per day. The actual amount is likely to be somewhere in the middle.

By ignoring this critical factor, the pilot test's accuracy and business-impact assessment can only be impaired, which in turn significantly affect the cognitive capacity of an adaptive organization and undermines the long-term success of the enterprise's RFID project.

This situation is a result of focusing on getting tags and readers to work properly while overlooking the fact it is the decisions based on the information generated (by bar codes or RFID tags) that will improve overall operations. Alternatively, it may be due to worries about pilot project costs. Indeed, the industry has been wowed by estimates of greater than 7 terabytes of item-level data per day at Wal-Mart stores.

This may explain why the data-warehousing teams stand by waiting for the data from tests instead of being actively involved in the design of the test itself.

We believe it is time to take a closer look at estimating RFID's data-warehouse impact. In order to proceed, we must recognize that 2005 will not be the year of item-level data; item-level RFID is two to three years out. Furthermore, we must recognize that case/pallet-level data will assist in determining the amount of data that is practical to capture and utilize.

Currently, some suppliers haven't enabled RFID compliance for all the products and product lines offered to retailers. During 2005, we believe suppliers will continue to focus on case/pallet-level data capture and expand mandate compliance into their full product sets. Moreover, suppliers will begin to evaluate RFID (Electronic Product Code-based and non-EPC-based) to improve their internal operations.

As with all technology, there is a point of diminishing returns and this same axiom applies to RFID data. As with past data-warehousing developments, there is the discussion around the amount of atomic (e.g., individual transaction-level) data to store in a data warehouse and for how long to retain that data.

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