Full-Scale RFID Could Take a Decade

APC, a Wal-Mart and Department of Defense trading partner, has been working with RFID wireless technology for 15 months already. Although full-scale company deployment will be a multiyear process, ROI does look obtainable by 2009, according to the company

As the year 2004 winds down, many product suppliers are looking to launch their first implementations of RFID sometime in 2005. But full-fledged RFID deployment—across outbound shipments, inbound deliveries and manufacturing for a whole product lineup—could easily take not just one year, but a full decade or more, according to one early user.

"This is not a one-year model," Rich Morrissey, director of e-business strategy at American Power Conversion Corp. (APC), said in a recent Webcast called "Getting Ready for RFID: A User Speaks."

Instead, full-fledged implementation of RFID (radio frequency identification) is "in the 10- to 15-year-plus category," he told a Webcast audience made up mostly of initiates to RFID.

APC, a major producer of back-up power products and services, recently completed an RFID pilot at a couple of warehouse locations involving 18 to 25 products out of its total of 33,000 SKUs.

But before final deployment, the company will spend considerable time on gaining an understanding of how to achieve ROI (return on investment), and on how to deal with business process and integration issues.

Morrissey pointed to three main drivers behind the rollout at APC: mandates from trading partners Wal-Mart and the U.S. Department of Defense; interest among four senior-level executives in evaluating the technology; and a "drive for continuous improvement of our business processes and capabilities, leading to delighted customers."

During the Webcast—presented by CompTIA (the Computing Technology Industry Association)—Morrissey gave the RFID newbies a number of tips about piloting the wireless technology, which is geared toward improving inventory control and streamlining the overall supply chain process.

Planning is critical, according to the e-business strategy director. For one thing, the reported shortages of RFID hardware such as tags, readers and antennae are definitely real. "From order to receiving took over two months," he said.

/zimages/3/28571.gifIs the RFID tag shortage a blessing in disguise? Click here for a column.

Morrissey also suggested that product distributors obtain outside expertise from consultants if needed. "Spend some money upfront," he said. APCs technology partners on the RFID rollout included IBM Global Services (IGS) and Odin Technology.

Next Page: Practical planning advice.