Perhaps the most notable finding of our research was the
indisputable evidence that reports of RFID’s death have
been greatly exaggerated. Nearly one-third of the survey
respondents are already using, piloting, or in the midst of
implementing RFID technologies in their logistics operations. Another 27 percent are considering implementing
RFID in the next two years. That leaves a little more than 40
percent who are not using the technology or planning an
RFID implementation in the near future.
While it’s clear that RFID is far from a failed technology,
it has yet to effect the sweeping supply chain transformations envisioned back in 2003. Our study suggests that this
may be partly because users are deploying the technology a
bit differently than originally expected.
For example, Wal-Mart intended to use RFID to automate inventory replenishment systems by tracking cases
and pallets, while the Department of Defense (DOD)
sought to track pallets and high-value parts at the unit level.
The overarching objective in both cases was to improve
overall supply chain performance.
Those goals have not been abandoned, but our study
revealed that many users are implementing RFID with
other aims in mind. Rather than focusing on streamlining
overall supply chain performance, they’re primarily using
RFID to streamline and improve their internal operations.
Indeed, 59 percent of the survey respondents who already
have some sort of RFID experience are focusing their
implementations on internal improvements. Sixteen percent of them said that they view RFID implementation as
a tactical move to improve efficiencies of specific processes within the company, and 43 percent see it as a strategic
move to improve efficiencies of multiple, connected
processes within the company. Meanwhile, only 27 percent
consider it to be a strategic move that involves using RFID
across the entire supply chain.
The list of tasks respondents are carrying out with the aid
of RFID supports the idea that most of these implementations are aimed at internal improvements. They include the
following (in descending order based on the extent of
implementation):
▪ Streamlining and improving internal operations
▪ Conducting inventory counts of items in storage
▪ Monitoring inventory usage
▪ Automating inventory replenishment
▪ Locating parts or equipment within a facility
▪ Tracking parts at the case/pallet/container level
▪ Tracking equipment (pallets, carts, trailers, etc.)
▪ Tracking parts at the individual unit level
▪ Supporting supplier-buyer coordination
In some cases, though, implementations were mostly
about meeting mandates. Fourteen percent of the respon-
dents who are currently using RFID said their company’s
management viewed their implementations as “reactive”—
that is, driven by a trading partner’s request or demand.
6
EXHIBIT 1
Perceptions of RFID
implementation benefits
5
4
3
Not Considering
Considering
Piloting
Implementing Implemented
; Customer Service
; Productivity
6
EXHIBIT 2
RFID implementation barriers
; Cost
; Understanding
; Technical
; Privacy
5
4
3
2
Not Considering
Considering
Piloting
Implementing Implemented
BENEFITS OF RFID IMPLEMENTATION
What did respondents who have experience with RFID (or
plan to implement it soon) see as the main benefits? In terms
of general categories, improvements in productivity and customer service were ranked highest, followed by communication and asset management. As far as specific operational benefits, “tracking of supply” came out on top in the rankings,
with 85 percent of the respondents indicating they expected
to see moderate to strong benefits from the use of RFID for
tracking. Also highly ranked: reductions in fulfillment errors,
improvements in the efficiency of order delivery/fulfillment,
improvements in customer order tracking, and higher levels
of customer satisfaction with the delivery fulfillment processes and outcomes. Respondents also said that RFID has
enhanced the accuracy and availability of information in the
supply chain, resulting in better inventory visibility, better visibility into supply chain processes, improvements in productivity, and reductions in operating costs.
One of our most interesting findings regarding benefits
can be seen in Exhibit 1, which shows how respondents’
perceptions of the potential benefits vary depending upon
where they stand on the implementation continuum.
Survey participants were asked to indicate, on a scale from
“weak” to “strong,” the level of benefit their company “may
