Stories and Video of RFID in Action
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The video to the left shows a demonstration using Item Level RFID tags for the retail supply chain for the Media and Entertainment vertical. The demonstration was done in partnership between Handleman Company and epcSolutions. |
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This video shows the results of a RFID pilot project with GS1 Thailand, a Thai apparel store and epcSolutions. |
The Business Case for RFID—Forecast and Realize Return on Investment (ROI)
To understand the ROI of RFID, businesses need to consider how they are applying the technology effectively within the walls of their facilities and as collaborative efforts with trading partners. Keep in mind: RFID will be implemented in phases. Each phase will provide opportunities to learn more about the strengths, weaknesses, and appropriate applications. As an example, consider the following scenario:
Tagging all inventory
Let’s assume a company supplies product “C” to the DoD. That company sells 20 million cases of product “C” per year, though only a percentage of that product is actually bound for the DoD, and accordingly bound to the DoD's current tagging requirements. If we were to tag all inventory, perhaps by inserting the tagging process into the heart of the manufacturing line, then just the cost of tags (which is estimated as at least 80% of the cost of an RFID implementation) will cost our company:
Source-tagging
20 Million Cases x .30 cents tags = $6 Million per year
Tagging only the inventory that needs to be tagged today
Here, for example, let’s assume that we are only tagging product bound for the DoD with a specified “ship to” location of one of the DoD facilities that are requiring tagging at this time.
"slap-and-ship plus"
50,000 Cases x .40 cent tags = $20,000.00 per year
Note that, for the sake of simplicity, this is only the cost of tags. Now, given the current lack of product and services maturity in the RFID market, not to mention standardizations that are still being worked out for the EPCglobal Network, tag protocols, country-to-country frequency and power limitations (and the necessary involvement of the government bodies in each country), would you rather make a $6 million decision or a $20,000 decision. Finding an ROI in the tens of thousands of dollars range is certainly going to easier than finding ROI in the millions. For many companies, the creation of an audit trail alone will account for tremendous savings in lower charge-back fees and shipment reconciliation. One of our clients talked about having $3 million tied up in reconciliation issues at any given time.
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