Understanding RFID ROI
I spoke with a manager of a jewelry store recently about using RFID technology. She is in charge of the day to day administrative operations of two retail stores.
All through our meeting, she associated RFID solely with getting her staff less work so that they can knock off from work earlier. But really, I was not getting through to her about ROI. She was looking at RFID from a b-r-o-a-d perspective. B-r-o-a-d perspective generalizes RFID implementation, while disregarding specific RFID strategies that can mean enormous savings for the organization. It paints a picture of luxuries, the company can afford NOT to have.
I believe RFID ROI will only make sense when implementation is highly focused, targeting to fit / improve / newly enable specific roles within the business. Wide scale RFID implementation across multiple supply chains, interchangeably among companies is unlikely to happen not unless the RFID prices fall further. The alternative for RFID integrators who are looking to create a valuable proposition for their clients must examine the places RFID can fit and expand current business capabilities. Look at opportunities where RFID can optimize processes, enable a new business function that places the company above its competitors.
The obvious calculator are
- Time-savings, bulk scanning versus per item scanning
- Cost per error
- Savings in cost of labour - E.g. 10 men vs 3 men in annual costs
- Value of timely data acquisition which ties in with my next point
- Quantify inventory efficiencies
Look into the chief bottlenecks of the current system for applicable RFID areas.
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