RFID In The Cloud - What To Look For When Outsourcing This Task
By Dylan Persaud, Managing Director Eval-Source
In today's cross channel retail market companies are looking for ways to cut costs this article for RFID outsourcing illuminates how this may be a viable option to reduce supply chain costs and lower risk. This article discusses options on how to make this viable. The promise of RFID and lower cost tags can be gained now more easily than before.
The new RFID market as highly touted by the popularity of the Walmart, Target, Metro initiatives have forced retail companies to look at implementing RFID solutions. A large change in this market since RFID became popular and made it to mainstream it was complex, required additional hardware, software, infrastructure, complicated integration and extra administration of the middleware RFID application.
A recent trend in this area is the creation of RFID outsourcers. RFID outsourcing companies have combined the middleware, the hardware and provide the integration to existing systems and these products and services may be delivered using the cloud now. The cloud has provided retailers and manufacturers to enter the RFID market by reducing the risk into your own supply chain. These cloud services can even provide the BI needed that these systems generate. The analytics can provide real-time valuable insight to already existing inventory levels and give proper status updates. By how this is now offered in the cloud companies can expect an easier entry point to justify this once costly investment there are now other options available. This can easily combine all the components of an RFID system and automate business processes if implemented, as can be seen the benefits are significant.
Below are several factors that should be considered if you are outsourcing the RFID process.
There are several concerns that are addressed through this model: a full RFID implementation may be too cost-prohibitive; the organization may not have the resources to complete a forced mandate pushed down from key suppliers; or suppliers might require compliance in a short time span that means the organization cannot commit to a full RFID implementation. From the resource, cost, and expertise standpoint, this model is useful.
RFID rental companies have gained popularity in the market, as they can offer a whole or partial RFID solution. Companies in the RFID space offer the rentals of tags, interrogators, encoders, and even middleware. Most companies within this market offer consulting on RFID implementations, and can rapidly comply with mandates. Some even offer supplier integration to external trading partners for full supply chain collaboration. The expertise gained through knowledgeable partners can prove very valuable in avoiding common mistakes relating to the implementation. Issues with tag placement, inconsistent reads, and data interpretation can be avoided because of the experience the partner will have acquired from past projects. The data integration and aggregation from the RFID system can be interpreted by the partner for corporate consumption, and be formatted correctly for input to the enterprise resource planning (ERP) system. The partner will advise the customer on how to manage and further understand the power of the new information.
This model can assist in planning, testing, and invoking a pilot program for the organization. With this option, an organization can also lease equipment and upgrade when new technology becomes available without going through significant capital expenses. The difficulties with this model must be weighed effectively to achieve maximum gain. There are a few drawbacks to consider if this model is pursued. When selecting an RFID outsourcing solution, always ensure there is an exit strategy built into the contract. If, for whatever reason, the company needs to change strategy or to find a more cost effective solution, there should be a way out of the current agreement. This has to be addressed by the vendor receiving the outsourced product or services. It is not usual practice for RFID outsourcers to issue an opt-out clause, so the vendor must specify that there is an equitable way out of the contract should conditions change.
Also, if supply strategy should change, there are many logistics and financial issues to deal with if the RFID component is outsourced. The organization possibly may not have planned for the implications of having these services returned to an in-house process. Implications the organization will have to consider include the acquisition cost of new infrastructure, hardware, and software; integration; compatibility with current systems; and functional and technical resources. Further to this, physical acquisition of warehouse space and labour, and the resources to execute the handling component if products are involved, need to be considered. With each of these tasks, there are several steps involved to execute each procedure, which can consume additional time, resources, and budget if not planned for accordingly.
This newly created option of RFID in the cloud has made it easier for companies to enter the RFID market that lowers risks, reduces costs and is a new way lower risks of failed implementation – so good luck to all when exploring this option.
About Eval-Source
Eval-Source is an Analyst/Consulting consulting firm that offers enterprise software evaluation, benchmarking for companies and strategic consulting to the business marketplace. Our innovative professional services combine to make your life easier whether it is to acquire enterprise software , or benchmarking to add critical decision support to your technology investments using the Tru-Eval and Tru-Benchmark systems. For more information, visit www.eval-source.com/blog.