The story goes that, with radio frequency identification (RFID) equipment costs coming down and payback times shrinking, the era of ubiquitous RFID is upon us. Not so fast. Or, rather, not so cheap. Most insiders still don’t believe that inexpensive RFID is just around the corner.A new study conducted by the ARC Advisory Group (www.arcweb.com) on emerging practices finds that few companies currently using RFID technology see a short-term Return on Investment (ROI). Of the 24 companies consulted in the study, only one believed that it could have a payback in less than two years. All other firms believed getting a good ROI would take significantly longer.Better ROI won’t happen, the study concludes, until:
- The reliability of tag reading improves
- Tag costs fall
- A “critical mass” of retailers are using RFID solutions
- Companies are better collaborating with upstream
suppliers
- Wal-Mart’s implementation at the pallet and case level will cover more than 600 stores.
- Some significant portion of the U.S. Department of Defense suppliers, numbering 40,000+, will have shipped considerable inventory to the DoD with RFID tags affixed at the pallet and case level.
- Target, Albertsons, Best Buy and likely other retailers will have implemented the first phases of their RFID rollouts.
- Traditional hardware players such as Philips, TI, Intermec and Symbol will be playing a much larger industry role (the space is dominated today by relatively small startups).