RFID - Bond with the Best

RFID (Radio Frequency Identification) initially made an appearance as an espionage tool in many a Bond movie, but this cool tool or rather a tag, is making inroads in enhancing supply chain efficiency. Radio Frequency Identification (RFID) is a method of automatic identification which relies on storing and remotely retrieving data using devices known as RFID tags or transponders. An RFID tag is a tiny object that is either attached to or incorporated into a product or a person. These tags have antennas to enable them to receive and respond to radio waves.

The initiative to adopt the technology has primarily originated from the retailers. They have recognized the benefits of RFID in the form of reduced inventories and faster inventory turnover. Some of the retailers like Wal-Mart, Best Buy, CVS and several others have already experimented with RFID and are determined to take the technology to the next level of their operations. It is not just the retailers who will benefit from RFID. There are other potential areas of application such as manufacturing, transportation, defense, internal security and other areas where information is vital to gain a strategic advantage. RFID, like any other emerging technology, is slowly catching up and broad adoption is likely by 2010, according to AMR’s research.

Companies have a lot of work to accomplish before RFID gets accepted as a common-place technology. Many agree that supply chain optimization is possible only with the effective collaboration of trading partners. To this extent the initiatives are focused on online collaboration and communication of the standards with the supply partners. But this is not enough. The problem is in the sharing of data between the retailers and suppliers. Achieving and maintaining collaboration between retailers and their suppliers helps reduce cycle times and moves retail companies a step ahead to deliver the right product to the right place and at the right time.

Excerpts from my article 'RFID - the Buzzword in Supply Chain' published in The Marketing Mastermind, Dec 2005.