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Who Gains, Who Loses, From Rfid's Growing Presence In The Marketplace?

2289 words - 9 pages

In April 2004, Wal-Mart announced a pilot program that would require its top 100 suppliers to be RFID compliant -- attaching Radio Frequency Identification tags on cases and pallets destined for Wal-Mart stores and Sam's Club locations in the Dallas/Fort Worth area -- by January 2005. Showing just how much clout Wal-Mart has, the retailer is boasting 100% compliance, although it won't know until next month whether the system has led to increased efficiencies."If it wasn't for Wal-Mart, we would not be having this conversation," says Badri Devalla, principal architect with Infosys, a global consulting and information technology services company, who spoke about the future of RFID technology at a recent Emerging Technologies conference. While the technology has definitely come into its own, said Devalla -- pointing out that the automotive industry and the Department of Defense have been exploring RFID for the past few years -- it took a giant like Wal-Mart to bring it to the consumer goods sector. "Initially suppliers were scrambling to comply. Now many are stepping back and asking the million-dollar question: 'Is this just a sunk cost, or can we find a way to benefit from it?'"Interestingly, while it may be considered one of the hottest technologies around, RFID is fairly old. It was invented in 1948 by Harry Stockman, but until the late 1990s it was essentially a technology waiting for an infrastructure. Its three components include the tag (a digital memory chip with integrated transponder), a reader (senses the presence of tags, receives and processes tag-level data) and a host computer (aggregates data from tag readers and passes RFID data via middleware to core business systems). Before powerful enterprise-wide computing, there was nothing to do with the information, so there was no reason to collect it. After Y2K and the full sweep of enterprise software, fertile space for new kinds of data was found.The next three to six months may be critical, as a consolidation of technology vendors and software vendors takes place. It's similar to the Internet boom. Everyone is watching to see who is going to make the next leap. With standards fairly well in place -- the EPC global network has established the standards and software for RFID technology -- suppliers are freed up to explore what Devalla calls true "green-field" technology.No Cow Left BehindClients who want to go further than the "slap and ship" approach, are looking at it in two ways: closed-loop strategies (focusing within the company) and supply chain strategies (more collaborative efforts, possibly including packaging suppliers, contract manufacturers, third-party logistics players and retailers). Internal closed-loop systems are an easy starting point because companies can avoid issues with industry standards and synchronization with exterior partners. The options for using the technology are unlimited. Infosys, for example, is using RFID technology to track laptops at its many offices...

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