RFID (Radio-Frequency Identification) is important. Why? For starters, WalMart has recently announced that all its suppliers who don’t provide pallet-level RFID for its Sam’s Club stores will have to pay a $2.00-per-pallet fee, which will go up to $3.00 in January of 2009. Retail’s 800-pound gorilla is committed to the technology, and when it leads, the rest of the retail sector tends to follow. Even if you sell only to OEMs, RFID is almost certainly in your company’s future.
Don’t know much about RFID? You should – and there’s an easy way to learn more. Register for our 20-minute Web Seminar on the subject.
For the uninitiated, RFID technology basically consists of small tags that can be attached to a pallet or single product, and readers that can sense a tag’s location, capture digitized product information contained in that tag, and forward the data to a computer system. Many see RFID as an eventual replacement for bar coding because RFID tags can contain a lot of information and, more importantly, can be read without line-of-sight access.
For small-to-medium sized manufacturers, the benefits of RFID don’t usually justify its cost, unless, of course, Wal-Mart is an important customer. The tags themselves are an added expense (somewhere around 7 cents each at present) and also add manufacturing steps. In addition, there are all sorts of standardization issues that have as yet to be sorted out. Not all readers can read all tags, and there are compatibility issues between European, Chinese and U. S. coding standards.
Finally, there is serious opposition to RFID technology by advocacy groups concerned with privacy issues. I think these are bogus issues, but they may nonetheless lead to legislation that further complicates an already complicated technology.
None of this is stopping WalMart, or hundreds of other giant companies for that matter. They are benefiting from the technology right now. In fact, some tagging is already moving down to the product level when the items are expensive enough.
So, if RFID is inevitable, is there anything in it for you? Maybe. RFID technology does allow you to receive near-real-time operational data. And RFID vendors also hype the possibility of better supply chain integration.
The bottom line is this: RFID is coming, and you need to be prepared. I strongly suggest you attend our Webinar. In fact, sign up right now while it’s on your mind. You’ll be glad you did.