Making The Case To Deploy RFID

Small to midsize enterprises weigh the costs and implications of making the jump into RFID.
Another Cost to Consider
And the road to Utopia requires more than a new label printer. Jack Link's has hired consulting and integration firms, along with Microsoft Business Solutions to take RFID beyond the "slap and ship" phase. In particular, Microsoft is using Jack Link's as a test site for new RFID middleware that won't be generally available until late 2005 at the earliest.

The right middleware, in fact, is essential to getting more bang for your RFID buck. "It is all about putting context to the RFID signal," says Phillips. "This means you have to store RFID data, possibly associate it with some metadata, and certainly integrate it with back-end data, and application systems such as ERP."

Vendors OATSystems, RedPrarie, and Manhattan Associates, to name a few, all offer some form of RFID middleware for the enterprise. The software Microsoft is now making available to Jack Link's will target small to midsized businesses. Microsoft plans to bundle this software with its own ERP offerings, Navision, Great Plains, and Axapta.

Early Adopter Pain
Exactly how all this new hardware and software will best fit together with existing systems is still very much in doubt, which is one reason Phillips says adopting a wait-and-see policy is a sensible strategy. "You can always outsource RFID tagging to a 3PL [third-party logistics] partner," he says. "However, don't do this just to avoid thinking about RFID. Be prepared to migrate to an architecture that allows you to reap the benefits of RFID when the technology is more mature."

In some ways the nascent RFID market is like the early days of networking. "You have a lot of new hardware devices at the periphery," explains Gene Alvarez, analyst with the Meta Group in Stamford, Conn. "These all need software support and remote management. The standards for this are still being developed, similar to what happened with modems and routers back about 15 years ago." In other words, the case for taking it slow on RFID is strong.

First Mover Advantage
There's still one reason, or fact really, that could trump all this common sense. All agree that it's only a matter of time before Wal-Mart will extend the RFID mandate to all its suppliers. The word on the street says the early adopters will receive preferential treatment from the king of retail.

"You become more strategically aligned with Wal-Mart if you adopt RFID before your competitors," says Overby, "and it is very safe to say that you will get some kind of 'support' from Wal-Mart."

She adds that this is primarily relevant to suppliers who see Wal-Mart as part of their growth strategy, but how many suppliers want to claim Wal-Mart is not, and never will be, a part of their growth strategy?

Jack Link's hasn't secured any promises yet of preferential treatment, but Paepke does say, "We are certainly hopeful that RFID compliance will mean we sell more product to Wal-Mart."

Mark Leon has been reporting on business and technology for the last eight years.

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