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Marlo Brooke, president of Avatar Partners, has been a longtime advocate for RFID solutions. And her Irvine, Calif.-based company has successfully implemented several RFID solutions that range from supply chain management to tracking volatile gas cylinders.
"RFID offers tremendous value in two areas. The first is visibility of objects. The second is the elimination of human errors," Brooke said. "Both have to do with using technology to make better decisions that will improve the bottom line."
The value presented by the technology reaches deep into the business process, however, and needs professional direction to realize its full potential. RFID can be especially effective in improving the security of assets and in improving the efficiency of a given supply chain, she said.
"With RFID, you are essentially able to computerize each widget that you produce, as well as each step in between," Brooke said. "RFID can be used anywhere in the organization where employees are manually recording the steps of an item. This applies to raw goods procurement, traceability, movement and usage, production, inventory, recording valuable environmental conditions of the item and its transport and receipt to the ultimate end user. Supply chain has to do with the right product in the right place at the right time, and RFID enables total visibility of each step in the supply chain. We call this the Synchronized Value Chain." For solution providers, ongoing revenue is a key factor behind backing a technology, and that's something RFID also promises, said Avatar Partners RFID Practice Leader James Williams. "If a vendor can get into industry consortiums and begin to understand their issues, they will be far ahead of any competition," he said. "Sometimes smaller vendors can be more nimble, and thus react to market changes—this is a definite competitive edge with RFID right now." Brooke said ongoing research and development by the likes of Hewlett-Packard and IBM in nano- technology, intelligent ink and smart dust will result in an evolution of RFID.
"We see a hybridization and more customization specific to industries that encapsulates global standards but also addresses specific needs. In the short term, we will experience a much greater emphasis on business intelligence, not just insofar as static exception-based reporting, but on true automation such that an RFID activity will trigger events previously requiring human intervention, which will thus trigger additional events."
There are still some potential show stoppers for RFID, said Deon Nel, an engineer at Avatar Partners. "The biggest impediment was lack of global standards, but much of that issue has been solved with the newly ratified EPCglobal specifications within Gen2 [of RFID]. However, industries are still in the process of defining specific requirements, and we already see that Gen2 standards have their own limitations." EPCglobal is the standards group for the Electronic Product Code. Its U.S. base is in Lawrenceville, N.J.
Some of the biggest problems with RFID deployments are the easiest to solve, Williams said. "The biggest adoption challenge is lack of up-front planning," he said. "Even if RFID is designed to only meet a tactical objective for a trading partner, one must first consider the big picture, and implications of RFID down the road. RFID should be implemented through phases, so that there is a clearly defined understanding of how it will impact the organization." Another point of caution: Williams warns solution providers against marrying themselves too closely to any one particular vendor.
"Internal process improvement must be considered above all, and that must be tied to strategic objectives," he said. "If every technology initiative ties to your strategic objectives, you cannot lose. You can only lose if you let the technology dictate your strategic objectives."
What makes this particularly difficult right now is the overwhelming number of vendors involved in RFID, up to 200 by Williams' count. "There will likely be a large shakeout," he said. "You can protect yourself from these storms of change by ensuring that RFID is serving your company's objectives, not the other way around."