Is RFID the Missing Supply Chain Link?

The more I investigate and learn about Radio Frequency Identification technology, the more I believe that it truly is the “missing link” when it comes to management of the world’s supply chains. In 1985 the concept of Quick Response (QR) was developed as a full cycle cross company integrated logistics and replenishment model with potential savings in General Merchandise identified at circa $ 25 billion annually. Almost 20 years later these benefits have only been partially achieved with significant dollars still on the table.

In 1993 a similar concept was floated in the Grocery Industry called Efficient Consumer Response (ECR) with equally impressive annual savings of $33 billion dollars touted as the prize for successful implementation. Again 10 years later only a small portion of this has been realized. RFID has the potential to help us to achieve these goals.

Although there were a myriad of cultural and trust issues which crippled these projects, one of the key disconnects was related to technology, specifically product data synchronization.

With manufacturer and retailer systems containing conflicting, inaccurate or incomplete product data integrating logistics activities between firms was next to impossible due to the many exceptions created by bad data.
Even within firms, the attempts over the last five years to implement full supply chain management systems have for the most part failed. Figures discussed at industry conferences projected $3.5 billion dollars in high end SCM software had been sold that either failed in implementation or was never implemented at all.

So is RFID or Radio Frequency Identification the “missing link”?

Jeff Ashcroft
© Copyright 2006, All Rights Reserved,
Ashcroft Communications International Ltd.

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