BY BEN AMES, SENIOR EDITOR
RFID AND ASSET MANAGEMENT
strategicinsight
DISTRIBUTION CENTER MANAGERS HAVE
long had a conflicted relationship with radio-fre-
quency identification (RFID) technology. Like a
hotshot high school player drafted by the big
leagues only to fade into relative obscurity, the
technology has never quite lived up to its glit-
tering promise.
RFID burst onto the scene in 2003, swaggering
into the stadium when Wal-Mart named the
technology its starting pitcher in a bold effort to track goods
throughout its distribution network. But the technology
failed to live up to expectations, largely because the high
cost of RFID tags and readers put it out of reach of all but
the biggest corporations.
Demoted to the minors, RFID has been clawing its way
back into the supply chain big leagues ever since, finding
success in specialty applications such as tracking high-
priced fashion apparel, electronics, and pharmaceuticals.
Despite those wins, RFID continues to be dogged by the
perception that tags and readers will remain too expensive
for widespread use until they reach mass production.
“That was the challenge when we first got into the indus-
try almost 25 years ago, and it still exists today,” said Ken
Ehrman, CEO of I.D. Systems, a supplier of asset tracking
solutions. “Tags are very expensive compared to bar codes,
so there’s a ‘chicken and egg’ problem; if the costs were
lower, the volume would be there, but without the volume,
you can’t drive down the cost.”
Some say a solution to this existential dilemma has been
under users’ noses the whole time. Instead of waiting for
prices to drop to the point where the technology is cheap
enough for item-level inventory tagging—a task at which
bar codes already excel—warehouse and DC managers
could use RFID to track much more valuable stuff: the
supply chain assets (think lift trucks, tractor chassis, and
handheld computers) that make a distribution center tick.
TRACKING CRITICAL ASSETS
In asset management, RFID may have finally found its
niche where supply chain operations are concerned. Rather
than simply tracking inventory, it can be put to higher uses,
like serving as the enabling technology for sophisticated
data collection initiatives.
As for what types of assets DCs are tagging, that varies
all over the map. While some operations tag assets like
returnable containers that are routinely sent off site, others
track items that are intended to remain inside a facility, like
manufacturing tools or IT equipment. “One of the biggest
problems is [warehouse workers] losing handhelds; they
put it on a pallet and lose it when the pallet gets loaded and
moves,” said Tom O’Boyle, director of RFID at Barcoding
Inc., a Baltimore-based company that specializes in software
and hardware for bar coding, RFID, and wireless systems.
RFID earns MVP honors
for asset tracking
It has yet to fill its promise where
inventory tracking is concerned, but
RFID is proving to be a heavy hitter
in the growing area of warehouse
asset management.
