By George Anderson
Radio frequency identification (RFID) technology remains the hot topic in retail technology circles due in large part to Wal-Mart's mandate that suppliers be RFID compliant by 2006.
Some, however, have questioned if the current costs of getting RFID programs up and running outweigh the benefits of using the technology. Others have identified technical hurdles RFID needs to overcome to be of value across the tracking board.
For most involved in the implementation of RFID, it's not a question of whether retailers and their suppliers should pursue the use of the technology but what is the most prudent way to go about it.
Robert Malone, writing on the Forbes' Web site, concludes, "The question is not do I or do I not tag but where, when and how much."
According to Mr. Malone, "It is best to start with a pilot program of enthusiasts rather than committing to the technology across the board. Plan the application and understand the system, get the right suppliers, and test for quality, cost control, etc."
He also points out that current and upcoming technologies make it clear that it is probably not wise for retailers and suppliers to put all their eggs in the RFID basket.
"Bar code is far from dead," writes Mr. Malone, "and its broadly based use and the investment it represents are not about to fade from the scene quickly. RFID may be more robust in the sense of being able to deliver more information and without the need for proximity and clear sight lines as with bar code, but the devil can often be in the details. The devil can also be in an unwieldy system. Currently, the RFID system may err in the direction of complexity as processing the huge amount of information a set of tags can send out requires information integration of a high order and some kind of data warehousing to make sense. These require investments of consequence."
As for up and coming technologies that some may see as competitive to RFID, Mr. Malone points to the potential use of "smart dust or microelectromechanical sensors (MEMS) made by companies like Dust."
The objective of the technology is to create communicating sensors "the size of a grain of sand," writes the author, adding, "Don't laugh – much progress is being made even if you can't see it."
Ultimately, however, Mr. Malone says the benefits of RFID established in quantifiable studies means companies will need to dedicate human and financial resources to the technology.
He adds a caution and advice: "The standards for RFID are well along, but they are not cut in brass and therefore the smart money would bet on a limited investment and most of that in research into the technology, the code standards, the vendors offering tools or services, and planning, planning and planning. Did we suggest planning?"
Moderator's Comment: What is the current state of RFID in retailing? Where is it headed? - George Anderson - Moderator