For a change of pace I’d like to deviate from discussing WAN optimization controllers and application acceleration devices and focus on a different kind of optimization technology geared for supply networks: radio frequency identification.
RFID is essentially wireless tracking technology. It has been hyped for the last several years as a way to streamline different supply chain processes in settings as varied as distribution centers, retail stores, hospitals and pharmacies. While the technology is decades old, RFID gained renewed notoriety when outfits such as Wal-Mart and the Department of Defense endorsed it and began requiring business partners to outfit cases and pallets with RFID tags to provide greater supply chain transparency.
Over the last few years, RFID equipment vendors have been bullish on the technology’s adoption, but that optimism was offset by skepticism among target buyers who worried RFID wasn’t mature enough or cost-effective enough to deploy in a supply chain network.
A recent survey by the Computing Technology Industry Association (CompTIA) found IT resellers and vendors are ready to add RFID solutions to their portfolios, but their customers have been slow to embrace the technology. According to CompTIA, 84% of resellers, solution providers, systems integrators, and consultants will or may offer RFID products and solutions in the next three years — even though 65.6% said their customers have yet to implement RFID solutions.
“The results of our survey are reflective of the RFID market, where rosy forecasts about rapid and widespread adoption have given way to the reality of dealing with a technology whose broader deployment has been challenged by equipment and tagging costs, murky and unclear return-on-investment for supply chain applications, and a workforce skills shortage,” said David Sommer, vice president of e-business and software solutions at CompTIA.
Yet despite the slower-than-expected adoption rate, stories are emerging that could be encouraging for industries looking to speed up their supply chain applications with wireless tracking technology.
For instance Throttleman, a fashion company in Portugal, recently shared figures about its success deploying RFID products from TAGSYS in its supply chain. Throttleman worked with systems integrator Creativesystems to design its RFID-based system. (Creativesystems in turn partnered with TAGSYS for the RFID technology, Sybase for middleware, and Paxar for labels.)
The technology helps speed the process of getting Throttleman’s designs into retail stores — by several days.
The system works this way: Clothes fitted with RFID tags are shipped from the manufacturer to the distribution center, where a TAGSYS UHF tunnel scans and reads the content of each box in a few seconds. The tunnel automatically compares the list of items scanned to the packing slip, and discrepancies generate an alert to check content. In this way, shipping errors can be spotted and corrected much more quickly.
The end result is that Throttleman’s items spend five fewer days in the distribution center — which means they get to store shelves that much quicker. By re-stocking retail shelves faster and more accurately, Throttleman (which processes 1.5 million garments per year) can expect more sales.
The supply chain network is the lifeblood of manufacturers and retailers. Gains in efficiency can translate quickly into bottom-line gains. In particular, timing is critical in the fashion industry, where styles change so quickly.
After reading so many accounts of stalled deployments and elusive ROI, it’s great to hear about an RFID deployment that’s working for a company and yielding measurable gains in supply chain performance.
Copyright © 2007 IDG Communications, Inc.