Top 10 steps to radio frequency identification compliance success
Vernon Hills, IL January 29, 2004 Consumer product manufacturers and suppliers are being challenged with mandates from major retailers like Wal-Mart and government agencies like the Department of Defense that require radio frequency identification (RFID) tagging compliance at the carton, case and pallet level by early 2005.
But, according to on-demand printing solutions and security applications provider Zebra Technologies Corp., RFID doesn't have to be just a reactive compliance issue for companies. The provider said that proactively adopting an "RFID Readiness" strategy today could ease technology implementation and have a direct and positive impact on the bottom line tomorrow.
With new RFID "compliance" requirements looming just months away, here are 10 basic steps manufacturers and suppliers can take today to be RFID-ready by 2005:
1. Consider the Impact. Efficiently and automatically capturing data is one thing; using it to improve business processes is another. To be successful, data must be in sync between partners and customers. For example, the use of RFID tags carrying Electronic Product Codes (EPCs) on cases, cartons or pallets can enable vendors and customers to exchange information to manage inventory, eliminate out-of-stocks and enhance service levels. Begin by determining the desired business impact of RFID and where to achieve these benefits. Start by asking these key questions:
* What business problems can be solved?
* Where can RFID make the most measurable contributions to the bottom line?
* What internal operational efficiencies and customer service improvements can be achieved by implementing RFID?
2. Summon Allies. An important part of performing due diligence is to know exactly who will benefit from RFID implementation beyond primary customers. What potential exists for other supply chain benefactors, such as packaging and raw materials suppliers? Identify all the primary constituents, and educate them on the benefits of RFID.
3. Assemble the Troops. A critical first step in getting ready to deploy an RFID strategy is to enlist the right support. Start at the top. Secure buy-in from upper management. This acceptance will ensure that RFID adoption is a company-wide initiative. Keep in mind that RFID-enabled systems can affect an entire business, from shop floor personnel to the executive suite. Create a decision-making committee and choose a senior manager to lead this group. Engaging allies early will build the support needed to sustain your RFID initiative over the long term.
4. Know the Processes. Take a long, honest look at your current business processes. Supplementing current bar code systems with RFID technology is only effective if problem areas are successfully pinpointed. Manufacturers will be in a better position to extract the full value of their RFID investment if they identify how their business needs to change and set measurable improvement goals. Evaluate how items are moved and shipped, the rate of on-time deliveries, how many returns are received each month, and the frequency of out-of-stocks. Consider the manner in which each of these processes is currently handled. This assessment will help uncover inefficiencies and where RFID could make a real positive effect on the business.
5. Identify Targets. There are a variety of applications for which RFID can make an immediate positive business impact. Consider:
* Inventory management improvements
* Better inventory visibility
* Operational improvements
* Reducing inventory shrink
* Better asset tracking
6. Envision the Future. Set high-level milestones for what your business will look like by 2005, 2010 and even 2020. Be realistic about what can be accomplished in the initial phases of RFID implementation. Preliminary focus can include basic compliance with the tagging requirements set by your customers. Planning small, concrete steps will lead to wider RFID adoption and utility throughout the organization. Focus on the low-hanging fruits first.
7. Understand the Technology. Invite RFID hardware, software and integration partners to show their capabilities. Challenge them to show how their offerings will help you achieve your business vision. Make sure all parts of the solution are examined. Find partners who know the technologies and understand your business processes. A good partner is also one that can help measure the return on investment to enable future process improvements and achieve business goals.
8. Test the Waters. Once the selection has been narrowed, lay the foundation for evaluating RFID technology in a pilot setting. Create a pilot implementation of the RFID solution in a limited, defined area. This trial will help identify problems and enable optimization prior to wider deployment. When reviewing the performance of an RFID solution keep in mind these questions:
* Has the system been thoroughly tested with a representative range of item types?
* Has the impact of any "new data" on the existing information systems been assessed?
* Is the technology upgradeable to protect any capital investment?
* Can the established quality assurance processes ensure accurate readability?
Organizations like EPCglobal are setting up certification centers at which technology vendors and suppliers can ensure their equipment and merchandise will meet RFID minimum performance standards.
9. Prepare for Deployment. There are a number of factors that influence the RFID solution decision-making process. Before you deploy the solution, ensure that all the critical areas that must be addressed prior to implementation of an RFID system have been examined.
10. Join the Cause. Participating with organizations like EPCglobal is important to help shape the future of RFID technology to your advantage. Participation can help define and identify standards and address interoperability issues, as well as speed technology adoption.