With RFID, Think Process and Not Just Technology

As always, the very real danger is that managers themselves will become seduced by the new technologies and then appreciate them only superficially and misunderstand their true purpose and potential.

RFID chip Technology

Indeed, a full, in-depth evaluation and understanding of the business processes that make a company as efficient and competitive as it is will be mandatory for any except the most superficial implementation of Real World Awareness.

This seemingly obvious advice is borne out by research conducted by PRTM and SAP, based on a survey of some 60 companies and 75 different supply chains. The conclusions: Companies with mature business processes have significantly lower inventory levels—28 percent lower, in fact—compared to immature companies. Companies that invest solely in improving business processes leave money on the table, no doubt, but those that invest only in IT infrastructure end up being far more inefficient than they should. Indeed, without mature business processes, even companies with the top 20 percent, best-in-class IT setups were found to have 26 percent higher days of supply, 28 percent higher inventory-carrying costs, and 7 percent lower profit than those that were process immature and did not invest in IT. Evidently, implementing just IT systems without their supporting business processes is a waste of money.

Now, of course, bar-coded pallets and packages are tracked by the millions as they make their long journeys from factories to retail shelves and, finally, through the laser beams of checkout scanners. So, what is it that RFID might add to this well-documented success story? A great deal is added, in fact, which includes much-improved visibility into inventory, quicker detection and prevention of theft, accelerated supply chain speed, and more meaningful exchanges of information between business partners.

RFID data will be better data than what has been available from bar codes and other sources. It will be more accurate because of its being created automatically, with no manual keyboarding, and it will be collected more frequently than what is now collected from bar codes. As a result, this data will be richer in informational content and will, therefore, enable IT systems to maintain a more detailed representation, or model, of the world.

Along with greater frequency, there will be an increase in the complexity of data—an increase in the categories of data that will be collected and available for transactional and business intelligence systems to work with. One way to think of this concept is that RFID data will arrive from the field in a more granular form than what is now commonly obtained.

This was a guest post from Jhon Lutera. RFID is the new technology which many organizations are using to track their assets. It helps to keep data safe and maintain with tracking solution.

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