RFID in Europe Magazine Febuary 2016

 The RFID in Europe Magazine for Febuary 2017 is availible to download now

RFID in Europe AISBL is a not-for-profit organization established in 2012. RFID in Europe's principle goal is to promote the adoption of Radio Frequency Identification and related technology solutions enabling small and medium sized organizations throughout Europe to gain competitive advantage through their best use. RFID in Europe connects with European end-users, operators, solution providers, universities, research establishments, non-government and government organizations and all other European stakeholders through own initiatives and promotion of national projects via our international network. RFID in Europe is an extension of a European Commission FP7 Thematic Network called RACE networkRFID initiated in 2009.

Business Case

The Business Case For RFID

Virtually every sector of industry, commerce and services has the potential for exploiting RFID – manufacturing, supply chain logistics, retail, transport and distribution, agriculture and food production, leisure and travel, healthcare, military, police and rescue services, the built environment, environmental sustainability, major services, field support and maintenance, access control and security – the list is almost endless.

The end-game is identifying and exploiting the opportunities for wealth creation, profit, competitive advantage and the realisation of outcomes that add to quality of life and sustainability. Global drivers of change are favouring the take-up and innovative use of RFID. These are the companies taking advantage of world-wide trade, security and the enormous opportunities engendered by global connectivity through land-line, wireless communications and the Internet.

The business case for RFID rests upon the ability to recognise opportunity, assess the risks and to structure and implement a strategy for change that clearly identifies a favourable return on investment. Opportunities for applying RFID can be found in virtually any sector of commercial endeavour and at various levels of process or service engagement. Here are just a few examples:

 

  • Reduction of supply chain shrinkage – Opportunities for reducing shrinkage within supply chains as a result of diversion of goods or losses are ostensibly in the region of 50% at case level and between 10-15% at pallet level.
  • Sortation of items – Opportunities for enhancing item sortation processes, such as those encountered in clothing manufacture and distribution, wherein time and associated cost savings of greater than 40% may be achieved.
  • Flexible manufacturing – Opportunities for more itemspecific manufacturing operations to be performed using automated read and control functions to achieve more efficient processes, wherein process improvements of greater than 10% may be achieved.
  • Item identification in condition monitoring – Opportunities for improved identification of system components and tools for conditioning monitoring purposes, wherein the management may be achieved more efficiently with potential cost savings greater than 10%.
  • Reductions in inventory – Opportunities to reduce inventory by 5% or more in appropriately selected circumstances.
  • Improved asset management and maintenance – Opportunitiesfor improved management and utilization of assets, such as reusable containers, wherein savings in time, associated cost and maintenance could be greater than 10%.
  • Enhanced field services – Opportunities for location, plant and item tagging that can facilitate more efficient and effective field maintenance and support services, wherein savings in time and associated costs could be greater than 20%.
  • Labour and more efficient timeand- attendance management –  opportunities for improved labour management and associated costings yielding saving in excess of 20%

 These examples simply illustrate just a few of the myriad areas of opportunity in which radical improvements can be achieved if approached, assessed and the solutions implemented in an appropriate manner.

As with any technology the business case for effectively applying, or otherwise exploiting RFID, is determined by its relevance to the business and the benefits it can bring in economic and competitive terms. Appropriately applied RFID can significantly influence the primary addvalue objectives of business activity including:

  • Increased revenues and enhanced internal cost reductions through product and process improvements, innovation and enhanced services.
  • Enhanced competitiveness through more efficient and effective processes, communications, quality and customer care.
  • Enhanced management and safety of people.
  • Enhanced asset management and maintenance.

Why Is RFID So Important ?

The answer is in the facility it provides for identifying items. These items could include anything from raw materials to containers and transport vehicles. More than this it provides the platform for delivering and acquiring item associated information rapidly and accurately. The data carrier accompanies the item thus providing this basic but profound itemattendant role in which the identifier is clearly on or within the item concerned.

The same may be said of other data carriers such as linear bar codes and two-dimensional, multi-row bar code and matrix codes. Indeed, this is so and they also have significant and complementary roles to play in item identification and management. Where RFID offers additional benefits is in achieving write as well as read function (for read/write tags), batch readability of item tags, reading under conditions that would be considered too harsh or grimy for other data carriers, non-line of sight readability and readability through nonconductive, packaging and container materials. These complementary benefits yield a platform for wide ranging applications.

Unfortunately much of the hype that has accompanied the evolution of RFID in recent years has wrongly promoted RFID as a replacement for bar codes. That is not the case and misunderstandings, such as this,together with a lack of understanding of RFID systems and their capabilities, can result in uninformed and unsuccessful application of RFID. RFID must be effectively applied to achieve its benefits. That requires understanding – from executive appreciation of the business attributes and realisable benefits right down to the technical detail required for implementation, use and evaluation. Risk assessment and return-oninvestment (ROI) analysis are also part of the equation and should not be ignored.

Even for those who are not technology-minded there is a level and breadth of understanding required in order to make informed decisions concerning the opportunities the technology presents and the business requirements for achieving an effective application. The following factors are important in deriving an appropriate understanding of RFID from a business
standpoint:

  • The item-attendant nature of the applications and their significance within the broader considerations of information and communications technology (ICT) and automatic identification and data capture (AIDC).
  • The attributes and limitations of technology and associated products and being able to separate hype from reality in considering the claims that are made for the technology.
  • The risks and the potential that the technology offers for a return on investment.
  • The significance and implications of any regulatory constraints, guidelines, best practice and standards that relate to the technology and associated products.
  • The significance of legacy systems and the need to identify an appropriate migration and implementation strategy for applying the technology.
  • The range of practical issues that need to be considered and satisfied in planning and applying the technology, from needs analysis to mplementation (including practicalities in relation to system performance), maintenance and support, including training; all of which impact on the overall costs.
  • An application methodology that begins with the use of an appropriate  product / process diagnostic and allows considerations of alternative  technologies and solutions.
  • The software and middleware implications of interfacing with information management and enterprise systems.

In more specific terms the business case for RFID revolves around the need for development or enhancement of business processes, particularly those in which there is a requirement for item-management and more accurate and timely data capture. The reasons for such developments may be varied and may include a need to reduce wastage of time, effort, materials or money associated with inadequate processes. It may be for legislative reasons or commercial pressures of one form or another, or it may be to gain competitive advantage. Alternatively it may be to realise a product or service in which item identification or attendant machinereadable data is a requirement.