It’s seems RFID is everywhere all of a sudden and it wasn’t that long ago that no one knew what it was. Just the other night there was a whole news special on it called Spy Chips–apparently there’s a group of protestors out there convinced that corporations/government plan to track our every move with this technology. Thanks to Hollywood it doesn’t seem far-fetched, plus without the conspiracy angle, it would be much too boring for prime time news.
I’m not convinced that RFID will amount to much any time soon. There are some big barriers. Prices need to drop and the technology will have to improve significantly first. Sure, there are some perfect scenarios where RFID fits like a charm (toll/bus passes, high-value asset tracking, etc) but for the vast majority of businesses, especially the big supply-chain warehouse scenarios, the benefits aren’t as clear to me.
How does RFID differ from traditional barcodes? Barcodes are only capable of identifying the type of a product whereas RFID chips can carry much more information, and they can therefore identify specific instances of a product and where it currently is. Bar codes need line-of-sight for a read whereas RFID just has to be within a certain range. These differences promise to increase the amount of potential automation in inventory tracking and warehouse management systems but what’s the real business ROI in this case? Is it going to save the business significant money or just make it easier to track things? And if the latter, how many of these businesses really care about having that level of automated tracking?
It seems to me that barcodes work pretty well for the majority, at least given the current cost/complexity.
Wal-Mart has been one of the biggest proponents. Several years ago they decided to adopt RFID as a way to streamline their supply chain and therefore asked all of their suppliers to kindly comply if they wished to continue doing business with them. Fully implementing an RFID solution within a typical warehouse is easily a multi-million dollar project between hardware, software, training, etc. So what did these Wal-Mart suppliers do? They simply figured out a way to manually slap RFID chips on outgoing palettes and called it good. They just didn’t see the benefit for them to absorb the cost of embracing RFID internally. But it kept Wal-Mart happy.
Having said all this, I do believe RFID will gain traction as price/complexity come down over the years ahead. But it’s going to take some pioneers to blaze a trail for the rest of the industry and prove its worth. And I bet there are enough bigger-ROI candidates out there to fuel the effort. We’ll see.
It’s interesting to note that Microsoft is adding some compelling RFID support to the R2 release of BizTalk Server 2006. I had the privilege to watch a presentation on it yesterday and was impressed with how easy they’re trying to make it for developers — something Microsoft is typically good at — so that’s promising.
I’m very interested to see how much traction RFID gets from enterprises already using BizTalk Server 2006.
What’s your take?