Cost of implementing tagging does not currently equate to savings
Blue-sky thinking on RFID is all very well, but unless you can get a payback from a project within 18 months, don't waste your money, says a new research paper from PA Consulting.
The paper entitled 'Avoiding the RFID money pit', emerged as Tesco faced a fresh barrage of criticism over privacy issues surrounding RFID tags from US consumer group Caspian.
Despite all the hype, says the report, the reality facing the vast majority of grocery suppliers hit by retailer RFID mandates is that their costs will go through the roof without producing any discernable benefits.
Calls for manufacturers to think creatively about using RFID within their own four walls to generate value rather than 'slapping and shipping' RFID tagged cases to retailers are all very well, said the retailer. But with a few notable exceptions, such as Scottish Courage's use of RFID for asset tracking, little evidence was available to show how and when the payback would come.
Until every retail customer was using RFID, suppliers faced double running costs for the foreseeable future, it said.
'It's not just tags and readers, it's the software enabling your warehouse management system to process data, the means to store the data, and training your staff to use it,' it said.
Until tags include extra information not contained in barcodes suppliers were simply replacing one highly efficient system with another one that added no extra functionality at immense cost.
