Disappointment with RFID?

Filed in archive Implementation on October 14, 2005

Information Week offers an article outlining the problems encountered in RFID deployments in manufacturer supply chains to date.

The article takes a rather negative view. This paragraph sums it up:

"Given all the headaches, most companies are skating around the difficulty of integrating RFID data into their core manufacturing processes. In the face of painful realities, they aren't even trying to take full advantage of RFID's promise. Spending on RFID systems and services is trending up, with AMR Research predicting $1.9 billion next year going up to $4.2 billion in 2009. But it's the rare consumer-goods company that spends close to earlier predictions of up to $22 million on a deployment, AMR research director Kara Romanow says. Instead, most companies are taking a risk-averse approach, with the average consumer-goods company spending about $662,000 on simple slap-on-a-tag-and-ship deployments. "Rather than spend the millions of dollars we predicted it would take for manufacturers to implement RFID the correct way and integrate it into business processes and applications, they did the bare minimum to comply with retail mandates," she says."

The article is detailed and I urge you to read the whole thing for some valuable "lessons learned" tips.

I'll add two comments of my own about the article:

(1) It is written primarily about manufacturers' supply chain use of RFID. The article does not reflect the market uptake for other applications of RFID such as contactless payments, etc.

(2) The pessimistic outlook is to be expected. We are in the "Trough of Disillusionment" in the Hype Cycle. What we are going through with RFID is typical for any emerging technology. Overinflated expectations lead to disillusionment, before evening out to a more realistic market uptake. Some of the delay factor comes from the fact that companies simply have had to educate their staffs and experiment with the technology. Look at the bright side: better times lie ahead.