Achieving Total Supply Chain Visibility with RFID

As the cost of tags and readers continues to fall, system integration and data analytics are emerging as the top challenges in achieving total supply chain visibility with RFID

A new Aberdeen Group report that dissects the supply chain finds that the objectives, opportunities, and best-in-class RFID solutions change as product travels from one organization to the next in the chain. This creates disparity among partner organizations and the danger that individuals will develop solutions that do not lend themselves to collaborative leveraging of the technology across enterprises. It also creates an opportunity for a new class of vendor who provides solutions suitable to every stage of the supply chain.

In "Total Supply Chain Visibility," Aberdeen Group reveals that RFID costs a distribution company nearly 30% more than it costs a manufacturer and more than twice what the average retailer spends. It is a rare technology that can address the myriad objectives and constraints of a cross-enterprise RFID initiative. However, the right flavor of the technology to address each of the business challenges, collecting data at key choke points, making use of that data to enable visibility, and informing business analytics applications, can make collaboration among organizations seamless.

According to the report, each supply chain company approaches the challenge with a different set of primary objectives, and each has its own expectations for the time it takes to realize positive ROI. Individual companies looking to multiple sources for ROI will find the time to positive ROI shorter, and the same is true across enterprises. When partners collaborate to develop compatible and complementary solution sets, everyone in the chain achieves positive ROI in less time.

"Achieving total supply chain visibility is still an elusive goal for most enterprises, even those with mature RFID initiatives," says Russ Klein, Research Director for Aberdeen Group's Enabling Technology practice. "The report finds firms that involve partners in design and implementation encounter fewer roadblocks on their way to total visibility."