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Contact: Anyware Attends RFID Conference in Chicago; Reports on Latest Trends At last week's Distribution computer Expo in Chicago, Anyware's Solution Manager Mark Jones found that preliminary education, experimentation with technology and finding the right technology partners were consistently mentioned as critical starting points for RFID (Radio Frequency Identification) implementation. RFID is being touted in the industry as the new bar code of the supply chain, giving enterprises the ability to identify inventory down to the item level within 1 to 2 seconds and lot traceability throughout the entire supply chain. Other benefits of the system discussed at the conference were a reduction of "stock outs", decrease charge backs and price verifications of returns. It was also noted that other unknown benefits will surface when implementing an RFID program. But in spite of the known benefits and hidden ROI pockets, implementing an RFID solution can also present many problems. CostCheaper RFID tags, or "passive" tags which only send data when activated by a scanner, can only transmit data up to about 3 feet. Semi-passive tags which contain a battery, increase the range from 3 feet to 10 feet, but are more costly; prices range anywhere from 10 cents to 10 dollars. Active tags can increase range from 15 feet to conceptually 15,000 feet, but come with a high price tag. In addition tags have a "shelf life" of 2-7 years due to the battery. For the top 100 suppliers of Walmart, compliance by January 1st, 2005 is mandated. Suppliers to the DOD (Department of Defense) will have RFID compliance clauses written into their renewal contracts. For these suppliers it is necessary to implement some sort of RFID solution in the near future. Since the least expensive RFID tags available are averaging around 10 to 20 cents per tag, an RFID implementation can prove to be a costly venture. It is estimated that a moderately sized RFID solution could cost $13 to $23 million in the first year. For those suppliers that enjoy larger margins per item, the cost may not be as big of an issue. However, for most suppliers, this is not the case. Many mandated suppliers are opting for a "slap and stick" method where cases or pallets will be tagged with printed RFID tags. These RFID tags can be stored in a new warehouse management system and cross-referenced with existing internal lot numbers. While this approach complies with mandates, it does not offer any cost savings, rather only increases production costs. LogisticsIn addition to costs, the type of product being tagged can also pose its own technical or logistical problems. RFID tags do not operate well when exposed to liquid and/or metal. Suppliers of liquid products encased in metal containers will have trouble tagging products so they can be read by scanners. When asking an RFID tag or scanner supplier how to resolve this issue, their response is: "There's nothing we can do...it's simply physics". ApproachSuppliers mandated with compliance by January 1st, 2006 may be taking a "wait and see" approach. However, this approach could put a company on the tail-end of what could be the next Internet. Some of those companies willing to invest the money and experience the pains of being on the leading edge of RFID technology will find appropriate use cases for RFID implementations and will eventually enjoy rewards from them. Rather than letting the wave pass, companies are encouraged to develop their own use cases for an RFID solution that will not only comply with vendors but will offer cost savings elsewhere in their business processes. Panelists at the conference each indicated the benefits of engaging an RFID partner. Citing that it may cost a little more, it will also speed up the process of deployment and offer a more robust solution. As quoted in a May 25th, 2004 Frontline Solutions article, Ken Finkel, strategic accounts group leader for supply chain software provider RedPrairie, said: "Dipping in a toe to get educated will help, but there is a limited capacity of people who know how to deploy the technology and we may see a huge wave of people who need this technology. Therefore, the implication is to partner with an RFID technology provider before all the expert capacity is engaged." Anyware Mobile Solutions will be helping its clients by identifying their immediate needs of RFID compliance and developing business cases for their processes so they may gain a competitive edge in the future. It will be Anyware's focus to help clients find an ROI for an RFID implementation, and find the appropriate time to do so. Please contact us if you would like further information on RFID or would like to meet with one of our Solution Managers.
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