Report: Major RFID Hurdles Ahead

By Evan Schuman  |  Posted 07-20-2006
A new report from industry analyst firm Aberdeen Group does not bring a lot of optimistic news for RFID proponents.

The report predicts that companies will have trouble in areas such as finding sufficiently experienced RFID (radio-frequency identification) personnel, migrating to the use of biometrics and other new data-collection methods, and scaling RFID to the next level.

One bright note: The survey finds that users no longer see the cost of using RFID as the single most important factor guiding deployment decisions.

That's significant, because it's the first time in the years that Aberdeen has conducted this study where interviewees did not choose cost as the most important issue.

Report author John Fontanella, Aberdeen's senior vice president and service director for supply chain and retail research, in Boston, said one of the most troubling findings in the survey of RFID users was that most companies were doing the absolute minimum to comply with mandates. In other words, they weren't leveraging what they are required to do for major customers and using it to improve their own operations.

"Most are giving no thought beyond just satisfying the immediate need of collecting the data. The slow adopter is trying to meet whatever mandate they've been given. Some 99 percent are only adopting because they have to, because someone is telling them to, whether it's DOD [the Department of Defense], Wal-Mart, whoever," Fontanella said. "Now that the information is collected and paid for, it's time to start turning that RFID data into something much more positive, to get a much better return on their investment."

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Not all companies, though, are passing up the opportunity, he said. After Wal-Mart started forcing various suppliers to deliver, some suppliers decided to "do what I have to do to meet the mandate" and were "forced to automate the tagging process. But they then use that as the opportunity to not only build ASNs but to also automate centralized customer service," Fontanella said. "Some companies now are starting to use it as a notice to their carriers, that on this date, we're going to be shipping this amount of product and it has to be delivered on this date."

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