SmartAdvice: 'Big Iron' Returns With Push For Server Consolidation

Companies can save money by reducing the number of servers, but consolidation can take different forms, The Advisory Council says. Also, it's time to decide whether to just comply with RFID mandates or to invest funds to re-engineer and improve effectiveness.

InformationWeek Staff, Contributor

October 20, 2005

3 Min Read

Question B: If we delay implementing RFID, will it really cause us to lose business with a major RFID-mandating customer?

Our advice: We're only aware of one company that has lost significant business because it delayed implementing RFID. The company was a third-party logistics provider, and it lost a major contract with a consumer-products company that faced early 2006 RFID deadlines. So, though it can happen, odds are that a company that delays implementing RFID won't be hurt in the near-term.

Companies that delay planning and piloting RFID tend to view RFID tagging as an incremental cost to absorb or pass on. We believe this is a dangerous strategy. Companies that don't exploit RFID to improve execution and reduce costs risk becoming less competitive over the long run, and losing business to more efficient competitors.

For example, by implementing RFID companies can:

  • Increase warehouse throughput by reducing the staging and loading time at dock doors.

  • Optimize trailer usage by accelerating pull-away and actively managing in-yard inventory.

  • Reduce spoilage and obsolescence by combining first-in-first-out physical inventory management with location-based picking strategies.

  • Improve perfect-order percentage and reduce expediting costs without adding more inspection and counting time.

  • Reduce expediting and logistics costs by understanding where physical product exists within the supply chain.

  • Collaborate with supply-chain partners and retail customers to execute product promotions more effectively.

For many companies, requirements to RFID-tag large volumes of shipments are likely within the next 24 months. Senior management teams face a critical choice -- expend funds to comply, or invest funds to re-engineer and improve effectiveness. For RFID adoption, the costs of high-volume compliance can be very similar to the costs of reengineering, especially if cost-effective, open-standard technologies and technology integration strategies are selected.

It always takes longer to think through process re-designs, organizational change, and collaboration strategies than to just add compliance at the back-end of an existing process. By delaying, companies can squander the time window required to find and capture improvements.

Will delaying RFID implementations cause your company to lose business over the long run? This is a question that management should consider very carefully -- soon.

-- Walt DuLaney

Beth Cohen, TAC Thought Leader, has more than 20 years of experience building strong IT-delivery organizations from user and vendor perspectives. Having worked as a technologist for BBN, the company that literally invented the Internet, she not only knows where technology is today but where it's heading in the future. Her specific expertise includes building scalable, robust IT architectures, operating systems, desktop support, process improvement, program management, IT/business alignment, security, and integration of networks, applications, and systems.

Walt DuLaney, TAC Thought Leader, has more than 30 years of experience developing IT strategies and new IT-management practices for Fortune 300 companies. He consults extensively on strategy-alignment, project-management, and performance-measurement methods to assure that strategic initiatives are delivered successfully and operating results are verifiably improved. He is the CEO of Adaptive RFID, a software services company.

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