Knowledge@Wharton has a very interesting piece that looks objectively at RFID.

According to the article, RFID is a powerful technology that holds great benefits for retailers, governmental entities and suppliers. It promises to revolutionize the supply chain through item-level tracking.

OK, so there is nothing new about that. We've been hearing that for a long time.

However, the article gives an insightful overview of where RFID stands today. "Despite all the promise surrounding RFID, there are hurdles to be overcome. Collectively, these developments serve as an RFID reality check."

And what are these hurdles? There are three major ones:

• Cost of Tags: The cost of tags has to be reduced to 5 cents before RFID usage will become widespread. That is especially true when it comes to low-priced consumer goods. As the article points out, "...the importance of tag costs largely depends on the value of the item being tracked. For example, a $3 million Department of Defense missile can still get a benefit even if an RFID tag costs $100 or more. A can of cola needs a tag with a lower price point, say a penny."


• Tag Standards: Currently there are several different standards for RFID tags. Some suppliers are using "Class 0" tags, others are using "Class 1" tags, and still others are holding out for "Class 2" tags that are being standardized currently by EPCGlobal. Standards are improving and changing so fast that some of the today's implementations will have to be completely changed in a year's time.


• Tag Placement: Suppliers are still working through the challenges of figuring where on items (or cases or pallets) to place tags. There are physical challenges (tag signals have trouble penetrating liquid and metal). There is also tension between retailer mandates which simply require case and/or pallet level tagging, and the supplier benefits, which may be much greater through item level tagging.

Read the whole article (requires free registration). It's not just a rehash of what you've read elsewhere -- it has lots of useful detail.