Using RFID Technology to Derive Business Value
Is It Time for Your Business to Adopt RFID? As originally published on RFID Product News
01-08-2007
Spurred by sensationalized media coverage and mandates from retail giants like Wal-Mart and Tesco, the adoption of RFID technology has become a widely debated topic among businesses over the past year. As newer, less expensive tagging and interrogating applications begin to flood the market, companies around the world are calculating the business value of rolling-out an RFID solution across their supply chain and many are finding a financial case to do so.
An international freight forwarder operating out of Canada is one such example of a company that has adopted RFID technology and is leveraging the solution to help increase its overall revenue.
Over the past 20 years, Liaison Can. U.S. Inc. has moved to the forefront of the cross-border transport, shipping and packaging industry, steadily growing the business from a small Quebec-based courier to a full-fledged international freight forwarder. A growing number of Can. U.S. customers were finding it increasingly difficult to retain their supplier status with mass-merchandisers like Wal-Mart, and began demanding that Can. U.S. offer RFID capabilities as part of their service.
Often the adoption of an emerging technology poses a business case conundrum – will the benefits of an implementation have a significant impact your operations? Can improvements to customer service and operational efficiencies translate into bottom-line business benefits?
For a company that has prided itself on providing its clientele with the total service concept, handling everything from facilitating customs clearance fees to helping customers with invoice matching, Can. U.S. knew that they had to meet their customer needs and that technology would translate into a budding revenue-stream. To move them from a bar-coding and GPS tracking solution to an RFID-enabled system, Can. U.S. worked with a local partner, Ship2Save.
Today, Can. U.S. tracks the inventory stored in its warehouse by affixing passive RFID tags from Alien Technology to products as they are received and using Psion hand held computers with attached RFID readers to scan the products before they are moved to storage. When customer orders need to be assembled for shipping, the customized Operation Management System (OEM) from Ship2Save, which collects and manipulates the data transmitted from the hand held computers, generates reports that show the exact location of each piece of inventory. Products are scanned again when packed for shipping to ensure inventory and order accuracy. The company also uses Printronix RFID printers to print RFID-enabled labels as needed on-site.
Since implementing the RFID solution, Can. U.S. has improved packing efficiency, customer service and increased inventory visibility. But did these efficiencies translate into positive fiscal results? Indeed they did.
By reducing the average order processing time from a couple of hours to only 15 minutes, Can. U.S. has not only been able to process more shipping orders in a day, but they have been able to re-assign two employees to date to help with other tasks such as delivery. The resulting increased efficiency translates into operational cost-savings – for most companies it would be fairly easy to identify the cost of an employee, having the ability to reassign current employees saves the cost of hiring a new employee.
Similarly, the RFID-enabled solution has helped to reduce the amount of time workers spend on service calls by 75 per cent. When customer inquiries come in, employees can log on to the system and obtain real-time access to all product and shipping information. Customer satisfaction has been improved and Can. U.S. is continuing to grow as a business.
Perhaps the most unexpected benefit that the RFID-enabled solution has provided to Can. U.S. stems from the increased visibility into inventory. Warehouse theft among the RFID-tagged goods was eliminated within the first three months of deployment. And the RFID-tagged goods have the ability to transmit their exact location as they are shipped, reducing the possibility of cargo theft. The enhanced security has helped Can. U.S. to reduce its insurance premium by 15 per cent. This is yet another example of technology translating into bottom-line business benefits, as reducing a company's operating costs increases overall revenues.
Companies looking to derive business value from RFID-enabled solutions should consider the following:
- Be certain that your business has the need for an RFID-enabled solution. By understanding the work environment you can better identify which products will help the worker best complete those actions. RFID may or may not be the answer.
- Look for hardware that supports a variety of applications in addition to RFID, such as voice, imaging and bar-codes, to ensure your company is able to leverage both proven and emerging technologies.
- RFID data will have to be managed differently than bar code data, so finding a solid middleware solution will be crucial for organizing information.
- Invest in equipment that provides the most flexibility to reduce costs and increase productivity.
- Finding a solution provider with the right experience to design low-risk solutions.
- Low-cost PDA-style devices for mobile deployments just don’t cut it in harsh environments. For a better return on your investment in the long run, choose a rugged device that can withstand dust, extreme temperatures and drops within the warehouse and field service environments.
Above all, remember that technology can translate into bottom-line business benefits, but it is not a direct cause and effect equation. Investing in technology produces improvements that are generally challenging to measure, like increased productivity. Ask yourself, will using RFID to improve process efficiency and employee productivity produce a significant reduction for your company's hard operating costs that will in effect increase overall revenues? If the answer is yes, then perhaps it is time for your business to adopt RFID.
Tilbage
