RFID Deployment Costs Only Just Beginning

A new study by Deloitte & Touche and the Retail Systems Alert Group indicates companies' RFID investments are still conservative.

Most companies participating in radio-frequency identification technology projects believe they are only in the very early stages of investment, according to a survey released Tuesday by Deloitte & Touche USA LLP and the Retail Systems Alert Group.

The survey, conducted late last year debuted at the Global Retail Technology Forum 2005 in Barcelona, Spain, provides a snapshot of how 122 retailers, distributors, consumer goods companies, and apparel manufacturers view RFID adoption in 2004 and 2005. It also provides insight into RFID investments during the next five years.

RFID budgets through 2004 remained conservative across all industries surveyed. Most companies allocated less than $500,000 for RFID. Distributors were the exception, averaging between $2 million and $4 million, the survey says.

That's no surprise. The survey results indicate distributors believe they will gain the greatest benefit from RFID deployments. Approximately 80% of distributors that responded to the survey believe quicker order processing and customer payment reconciliation were among the benefits gained by RFID. Reduction in human error emerged as a key benefit across most industries in the survey.

A number of companies are also implementing cross-functional teams to tackle RFID deployments. About 70% of the suppliers say they have developed this strategy, compared with 65% logistics and transportation providers, 35% retailers, and 20% distributors.

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