Cost-Benefit Characterization of Selected Applications


In this section, we use the drivers mentioned thus far to characterize selected applications in terms of cost-benefit. Because some of the costs vary based on specific situations, we have provided relative costs of components as opposed to absolute costs.

As already mentioned, a cost-benefit analysis of an RFID deployment depends on several factors. Because the importance of these factors depends on the specific application being considered, it is not possible to provide a simple cost-benefit formula that is universally applicable. Instead, we take a sample of RFID applications from Chapter 1, "A Better Way of Doing Things," and discuss which cost drivers are critical for them based on their inherent characteristics. You can utilize this data in two ways. In some cases, your application may be exactly what is described in here. In that case, you can use this characterization as a guide to further build cost-benefit scenarios. In the case where your application is different from what is being described here, you can find the closest match and modify it to build cost-benefit scenarios. In addition, you can use the illustrated example provided in the Smart & Secure Tradelanes case study (Appendix A) as a guide to build a cost-benefit scenario.

Note:

The Key Benefits are taken from the four primary benefits outlined in Chapter 1. In cases where an application provides multiple benefits, the primary benefit is considered the Key Benefit.


Table 7.1. Cost-Benefit Characterization of Selected Applications

Key Benefit: Security and Authentication

Application

Characteristics

Cost Drivers

Comments

Electronic

Article

Surveillance

  • Prevents shoplifting through inexpensive 1-bit tags

  • Closed loop system that doesn't interact with other systems

  • Low or High Frequency tags with range < 3 ft

  • Primary ($$): Installation, 1-bit tags

  • Secondary ($): Tags, Readers, Training

  • In widespread deployment now

Document Authentication

  • Establishes authenticity of a document through an embedded RFID chip

  • Special tags embedded in the paper

  • Can use read-only or read-write tags

  • Primary ($$): Tagged paper, Integration with other systems to establish authenticity Business Process

  • Secondary ($): Readers, Training, Installation

  • Mid-term (1236 months) timeframe for general deployment; requires technology and pricing maturity

  • Customer education and acceptance key to success

Access Control

  • Tags embedded in badges or key-chains can provide access to restricted facilities

  • Closed loop system that may interact with the directory infrastructure of the enterprise to provision and revoke access on the fly

  • Low frequency tags with range < 6 inches

  • Primary ($$): Tags and readers, integration of tag data with back-end directory infrastructure

  • Secondary ($$): Readers, maintenance, installation

  • In widespread deployment now

  • Smart tags that can also store other keys and passwords, and can act as multiple access device are gaining popularity

Electronic

Drug

Pedigree

  • Prevent proliferation of counterfeit drugs by keeping a record of a drug's pedigree as it moves through supply chain

  • Open loop system that requires some type of central repository to store drug pedigree information

  • Ultra High or Microwave frequency passive tags with range > 3 feet

  • Primary ($$): Tags, Integration with central repository, Training and Process Re-engineering

  • Secondary ($$): Installation of tags on cases and at item level

  • Mid-term (1236 months) timeframe for general deployment; requires technology and pricing maturity

  • Customer education and acceptance key to success

Key Benefit: Safety

Application

Characteristics

Cost Drivers

Comments

People

Monitoring

  • Help locate missing or lost kids in amusement parks

  • Help locate and track whereabouts of the elderly in senior care facilities

  • Active or semi active tags more likely, passive UHF tags in some applications

  • Primary ($$): Readers, Installation and Integration, ProcessRe-engineering

  • Secondary ($): Tags

  • Near term (< 12 months) timeframe for general deployment since direct benefits and technology available today

  • Operational in some amusement parks already

Patient Care

  • Provide patient safety and id the newborns

  • Accurately identify the patient for a surgical procedure or for drug administration

  • Mainly HF tags

  • Primary ($$): Integration, Maintenance, Process Reengineering

  • Secondary ($): Tags, Readers

  • Mid term (12-36 months) timeframe for general deployment

  • Requires technology maturity, and patient education

Environment Sensing and Monitoring

  • Monitor environmental conditions such as temperature for perishable items

  • Identify tampering with items such as food, drugs

  • Active or passive tags with sensory capabilities

  • Primary ($$): Tags, Integration and Monitoring

  • Secondary ($): Readers

  • Mid term (12-36 months) timeframe for general deployment

  • Requires technology maturity, supplier acceptance and process re-engineering

Key Benefit: Convenience

Application

Characteristics

Cost Drivers

Comments

Crowd Control

  • Provide means to process guests / visitors faster at concerts or night clubs

  • HF (High Frequency) tags, injectable tags in some cases

  • Closed loop system

  • Primary ($$): Tags, Process Re-engineering, Installation

  • Secondary ($): Readers

  • Mid term (12-36 months) timeframe for general deployment

Payment

  • RFID based smart cards can act as e-wallets, allowing consumers to pay using the card

  • HF (High Frequency) tags used in this closed loop system

  • Primary ($$): Tags, Cards, Infrastructure, Process Re-engineering

  • Mid term (12-36 months) timeframe for general deployment

Key Benefit: Process Efficiency

Application

Characteristics

Cost Drivers

Comments

Industrial Automation

  • Automate the process of assembling various components through use of RFID to verify components and assembly instructions

  • Closed loop system

  • Primary ($$): Tags, Integration

  • Secondary ($): Readers

  • In use today; continues to improve and gain popularity

Track and Trace / Supply Chain Integration

  • Likely to be the most prevalent use of RFID in supply chain

  • Used in functions such as bar code replacement, compliance with mandates, supply chain visibility

  • Use of passive UHF tags in most cases, with range > 3 feet

  • Primary application of EPC defined standards

  • Primary ($$): Tags, Integration, Installation, Process Re-engineering

  • Secondary ($): Maintenance

  • Track and Trace: Near term (< 12 months) timeframe for general deployment due to various mandates

  • End-to-end Supply Chain Integration can take 2-5 years

  • Tag pricing and read accuracy key performance factors affecting wide-spread rollout

  • Open loop system that interacts with various business applications




RFID Field Guide(c) Deploying Radio Frequency Identification Systems
RFID Field Guide: Deploying Radio Frequency Identification Systems
ISBN: 0131853554
EAN: 2147483647
Year: 2006
Pages: 112

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