Section 7.2. Strategy Guidelines


7.2. Strategy Guidelines

The following list of strategy guidelines is by no means exhaustive and is provided here for informational purposes only:

  • Enhance security

  • Increase operational efficiency

  • Enable superior branding

Clearly, these strategy guidelines are quite broad. A business can select one of these guidelines and customize it depending on its core competencies and strategic goals. These guidelines are not mutually exclusive; that is, choosing one does not necessarily preclude choosing another. This is especially true of the first guideline on the list. The following sections provide examples of how you can customize these guidelines. Chapter 4, "Application Areas," provides more details about specific RFID applications mentioned in the following examples.

7.2.1. Enhance Security

Security is probably the most widely needed improvement in any business, but often receives inadequate resources and effort, perhaps because security enhancement, in general, does not directly translate into a company's bottom line. Decision makers often defer or completely ignore the issue of security when faced with the needs of other parts of the business. Security also has many aspects; for example, the means of theft can vary widely. Faced with a myriad of possibilities and the cost of encountering these, a company might despair and decide that security is a losing game for the business. RFID can offer a single-technology solution to deal with a wide variety of commodity thefts. These thefts directly, and perhaps substantially, affect a company's bottom line in lost revenue. Consider the following.

Shrinkage represents a significant problem for manufacturers, distributors, and retailers. Annually, billions of dollars of potential revenue are lost due to shrinkage. Part of this burden is passed to customers via higher prices. Existing anti-shrinkage processes are either largely nonexistent or insufficient to catch and prosecute perpetrators. RFID can provide item tracking and management capabilities. Combined with other security measures, such as RFID-enabled access control, RFID item tracking enables a business to know what item has been accessed by whom and when. In addition, RFID can actively resist a theft attempt by activating real-time alarms, locking access doors, and triggering video monitoring of the suspect and the item being pilfered.

Counterfeiting is another security concern that affects many businesses worldwide. Besides financial loss, a counterfeited item might harm its user (for example, counterfeited pharmaceuticals) and might decrease brand loyalty (among other things). RFID can provide a unique electronic signature for an item that can be used to determine the item's authenticity and provide a plethora of other information such as manufacturing date, target destination, and so on. This information can also be used to determine whether the item has been counterfeited.

Business liability is a serious concern and can arise from various causes (for example, mishandling of hazardous materials, the presence of harmful bacteria in edible items such as meat, or faulty merchandise such as automobile tires). When business liability issues arise, it is necessary to trace the specific items involved. RFID enables companies to do so by uniquely identifying only the items associated with a particular incident so that the company can deal with those accordingly. For example, in the case of faulty automobile tires, the manufacturer can selectively recall only the tires that are known to be defective instead of recalling every tire that it sold over a particular period of time.

National security represents an extremely important concern that requires involvement not only from the government but also from the business community. Terrorists can use items such as hazardous materials and shipping containers, and resources such as drinking water, to launch attacks against a country. RFID can provide effective real-time monitoring and alarm capabilities to deter these types of attempts. A business, looking beyond its operations, competitors, and affiliation with the government, should investigate whether it might be exploited in any way to breach national security and should then take appropriate countermeasures. RFID can provide a one-stop shop for implementing a wide variety of these security measures.

7.2.2. Increase Operational Efficiency

Businesses can use RFID to increase efficiency in manufacturing, supply-chain, and other types of operations, such as internal logistics. Note, however, that any given operation is process-centric. Therefore, a technology such as RFID might offer only limited benefits if the process itself is not amenable to change.

In manufacturing, businesses can use RFID to identify production bottlenecks, accurately customize products, and implement quality control measures, to name a few, which can lead to substantial productivity gains and optimization of the manufacturing processes.

RFID is currently receiving a tremendous amount of attention in supply-chain operations. However, as mentioned previously, it is the process that ultimately needs to be modified to derive the maximum benefit from the technology. Therefore, a supply chain driven by product demand in near real time can take several years to build and require the collaboration of manufacturers, distributors, and retailers. RFID can prove a very useful tool to take advantage of this collaboration and the integrated processes that result from it. However, a business does not have to be optimized at this level to derive advantages from RFID. For example, today, RFID can automate shipping and receiving, reduce out of stocks, and eliminate manual labor.

Businesses can use RFID to increase the efficiency of their internal operations. For example, RFID can facilitate check-in and checkout of rental items and eliminate laborious filling out of paper forms and notes by using a single identification tag on an item. This can also eliminate multiple identification tags/labels that may be used today to identify an item.

7.2.3. Enable Superior Branding

In today's highly competitive business environment, companies constantly search for ways to distinguish their brands and products from competitor products. For example, some companies offer better customer service; others provide useful new products and services that set them apart from the rest of the pack. RFID represents another way for businesses to enhance their branding.

Businesses can use RFID to provide customers information on demand. For example, a tagged item, such as a bottle of wine, might provide information about the place and date of production and composition. Types of food that this particular wine complements might comprise part of this information. Thus, the shopper becomes aware of the quality of the product, and the potential to cross-sell is enhanced (for instance, other products such as the foods suggested). In addition, the retailer can share sales information regarding particular wines with distributors and producers so that they can all position themselves to better meet demand.

The application of RFID is almost boundless, constrained only by one's imagination. A business can come up with creative ways to offer new products or services that can provide it with a competitive edge compared to other similar companies in the market. For example, a business can guarantee that products meet quality standards (ISO 2000, government-approved organic standards, and so forth). Customers themselves who are using (or considering using) RFID technology might also be attracted to companies that are likewise deploying RFID, which might result in more business from these like-minded customers.



    RFID Sourcebook
    RFID Sourcebook (paperback)
    ISBN: 0132762021
    EAN: 2147483647
    Year: 2006
    Pages: 100
    Authors: Sandip Lahiri

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