While preventing theft of inventory is a big advantage of RFID tags, tagging inventory in factories offers the advantage of tracking the inventory while it's moving through the supply chain on the way to stores. Also, use of RFID in retail stores makes the checkout process much quicker since RFID tags can be read at a distance. I think cost savings arising from these factors should also be considered.
If you just moved the point where rfid tags are placed to the source of production no added costs would be incurred. Only if points in between are added for tracking would costs go up. The readers are portable and only need to buy as many as you have people operating them. or they are placed at entry/exit points to check in and out of inventory thus only need to implement at those points. This saves valuable human time and this is where the savings come from add theft reduction and that is just icing on the cake.
I suppose the labor cost in china do not offset the capital as fast as developed countries. But it always pays to keep your people doing the highest value tasks as possible offloading tasks to computers allows this re-tasking = higher productivity.
I could be wrong, but I suspect Walmarts' implementation doesn't entail RFID tagging from the source, as discussed in the article, but probably starts once pallets of merchandise enter their distibution system. I'm sure that's an expensive proposition as well, but it sounds like tagging from the source is an order of magnitude more specific in the supply chain, and probably a bit more expensive per unit of production to put in place.
Casinos do it for different reasons, also the model is completely different.
1. Security and faking of ' casino' token is the reason they do it.
2. The cost is not 'written off' per product, the 'token' is re-used multiple times, passing back through the croupier and the exchange point when 'real' money is returned to the player in exchange for the token, making it a highly cost effective system.
Also EACH PRODUCT needs an RFID chip rather than just the packing case of multiple items, since once the outer packing is stripped off, the inner items would become un-traceable, making the whole system pointless.
The Idea is that each item is traceable from source to destination (the checkout- point and beyond)
The main issues related to 'beyond' is that it makes you personally traceable, and also the value of any items tagged in an RFID way, as you walk from store to store in a shopping complex then each shop can see what you purchased in other stores and the value, they can then target you for advertising.
The same way google can track me to 20 meters, without a mobile phone/ GPS system, because they recorded all the WIFI systems when they did their street view.
I'm not sure comparing the profit margins of different industries -- in this case paper products and electronics -- is quite the point. Here's what we know: some industries have adopted RFID broadly. Other's haven't. A study that appears to be taken seriously by the business information market, at least as indicated by the premium its authors are charging to read it, suggests that RFID use could increase in Asia this year. But, the researchers claim, costs are a barrier. So what's happening?
I have no idea what the markup is on bogroll. I also don't know what a supply chain looks like for a company like Kimberly-Clark (inventor of the paper towel, just to pick something). I would suspect toilet paper has fewer steps in its manufacturing process than does, say, a wide-screen TV. So I can imagine different supply chain costs for the products, and different hardware demands were one to decide to install RFID in each chain.
All that said, you sound like someone deeply involved in this issue. I'd love some specific examples from the electronics industry, such as you have them at hand. Thanks again for commenting.
The 10-25 million stat comes from the report cited in the story. It's certainly useful to ask if those numbers were somehow inflated in the original research. If they are indeed "throwing an extra zero," the question I'd ask is why? I'm not sure who benefits from overstating the costs; it seems far more likely for a consultant like Frost, or a maker of RFID systems, to lowball the costs by five or ten percent. It would be helpful to see some examples of the cost exaggeration you're saying you encounter, and help us understand what's behind that. At the moment I'm more apt to believe that there really are prohibitive deployment costs, but that those aren't enough to limit the market. It's not a new technology, as you say, and it's a very useful one. But it does seem like there's still some indecision out there about its use. That's why it seemed to me worth noting a predicted increase in RFID for Asian supply chains. Thanks for your comment.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.