iQ MAGAZINE

In recent months, radio frequency identification (RFID) has become easier to use and more powerful. As a result, it's gaining wider adoption among companies that need to track inventory, equipment, or other assets. RFID uses tiny "tags" with microchips that send data to readers over a wireless network and, unlike bar codes, do not need to be physically scanned in order to work.

Many SMBs are finding themselves part of an RFID ecosystem mandated by the likes of major retailers Wal-Mart and Target, and customers such as the U.S. Department of Defense. Others are discovering that RFID improves processes and trims costs by tracking goods within a warehouse or automating ordering and replenishment.

Early adopters have learned they must:

• Use the opportunity RFID provides to optimize business processes
• Match RFID use to real business value
• Ensure leadership commitment for RFID efforts
• Involve IT, finance, operations, and other departments in RFID efforts
• Understand that RFID complements, rather than competes with or replaces, other technologies such as bar codes
• Employ a solid network foundation to enhance RFID's usefulness

Implementing RFID without a clear plan is risky. "It's important to conduct analysis and create an overall plan," says Joe Dunlap, a senior manager and RFID specialist in Accenture's supply-chain management practice.

Adds Erik Michielsen, director of RFID research at ABI Research, "Understand how the technology affects the business, the supply chain, and IT architecture."

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iQ Magazine, Second Quarter 2006