Industry expert offers retrospective on RFID

Lack of collaborative process change and effective measurement of ROI has had a dilatory effect on adoption, according toAMR Research in a three-year review of the technology.
By Manufacturing Business Technology Staff August 9, 2007

“In a lot of areas, new processes have to be developed to take advantage of RFID.”
—John Fontanella, VP, AMR Research

In spring 2004, Wal-Mart received its first shipments of RFID-tagged consumer goods, followed soon after by the Department of Defense (DoD); Target; and Albertsons similarly mandating the use of the new technology. Three years hence: What are the primary lessons learned?

“Tag readability is not the issue people supposed it would be,” says John Fontanella, VP of Boston-based AMR Research . “In pilots it has worked and has been proven to drive value, but when you bring it out of pilot it loses its effectiveness given the processes that are in place. In a lot of areas, new processes have to be developed to take advantage of RFID. It’s out of those new processes built in collaboration with retailers and customers that the applications will be created that really add value.”

Lack of collaborative process change and effective measurement of ROI has had a dilatory effect on adoption, according to AMR in a three-year review of the technology. Deployment of RFID at Wal-Mart distribution centers is scheduled, expansion plans for Target and DoD delayed, and for Albertsons, cancelled. Anticipated widespread adoption by 2008 will be likewise delayed—awaiting requisite process change.