Business Technology: Timing Is Everything In Making Jump To RFID - InformationWeek

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Commentary
7/3/2003
12:55 PM
Bob Evans
Bob Evans
Commentary
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Business Technology: Timing Is Everything In Making Jump To RFID

"Now is the time. It's not too late. A year from now is too late." Quick, who said that?

a) Dennis Kucinich's campaign manager;

b) Martha Stewart's attorney;

c) George Steinbrenner to Joe Torre; or

d) UCC's chief operating officer to the RSC re: RFID.

While I guess it's possible that each of the people above might well have uttered those lines very recently, I'm 100% certain that answer D is correct. And while the thought behind the quote is expressed very simply, the implications are enormous. Because the decision to act now--right now--versus late this year or sometime next year will be a huge factor in determining whether a company can remain or perhaps even become an innovative and nimble leader in its field over the next several years.

The quotation comes from Mike DiYeso, chief operating officer of the Uniform Code Council, which 30 years ago began pushing universal product codes that have since become ubiquitous in things like scannable bar codes. DiYeso spoke those lines during a talk focusing on the rapidly emergent technology of RFID, or radio-frequency identification, at the recent Retail Systems Conference, where he was a featured speaker with Wal-Mart CIO Linda Dillman. As reported by our Chris Murphy, UCC has been a driving force with Wal-Mart and other industry leaders in setting the technical standards for how retail data will be transmitted via RFID (see "Tag Line," June 16, p. 18).

I think it's just about impossible to overstate the business impact that RFID technologies could have if they're deployed thoughtfully and broadly. Efficiency, security, timeliness, paper reduction, accuracy, automation, visibility, tracking, load optimization, and collaboration are only the first of many areas that will be reshaped and probably dramatically improved via these tiny antenna-equipped chips. We first covered this new technology in September of last year when researchers from the Auto-ID Center at MIT said that a combination of technological breakthroughs plus broader industry acceptance could push the unit price for these highly intelligent devices down to 5 cents or less (see "Pinpoint Control," Sept. 30, p. 16). And in the nine months since those promising breakthroughs were achieved, hundreds more companies--retailers, wholesalers, suppliers, partners, and others--have agreed to support the new standards. As reported by Murphy, Wal-Mart is requiring 100 key suppliers to be ready to do the RFID roll 18 months from now.

And just how many companies beyond those 100 will be touched by this decision? What about all the suppliers and suppliers' suppliers and shippers and other partners that work closely with those 100? Estimating the scope of this impact is an inexact science, but it would seem like foolishly short-term thinking to believe that the ripple effects will be limited to a small group of companies.

As that type of momentum spreads, who's going to be able to afford to say, "Aw, that stuff doesn't really affect me. I'll just save some money by sticking with paper or EDI or faxes or human memory." And there are problems to overcome: Dillman said Wal-Mart's tests have revealed form-factor limitations, interference from wireless networks, slow performance, integration troubles, and reader errors. But those obstacles, while certainly not trivial, are technical and will be overcome.

No, these detail-level bugs won't slow RFID down. The bigger question is this: With Wal-Mart, Target, Coca-Cola, Procter & Gamble, and hundreds of other major corporations solidly behind this effort, can you afford to opt out? As you evaluate your options, bear these words in mind: "Now is the time. It's not too late. A year from now is too late."

Bob Evans
Editor in Chief
[email protected]


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