RFID ROI: In-Depth, Pt. 1

By Eric Fleming with an introduction by Louis Sirico

A process evaluation must consider more than just the RFID enabled process. It has to consider the downstream, upstream, and parallel processes as well. It has to look at the ergonomics of activities as well as the methods. For example: Where does manual data capture occur? How are exceptions handled and how frequently do they occur? How is data used? What technology platform is used? What does the data drive? Is this a manual process or an automated process? What are the step by step functions of the operator setup process? Where are the visibility gaps in the process? What are the process constraints? How is inventory used or impacted by these constraints?

Every business process has an input, one or more activities, and an output. Since the activities can be expressed as one of the above four components, and the components can be expressed as costs, all business processes can be expressed in terms of costs.

Transformation and the search for ROI have to be a methodical process. RFID as a technology is much like the internet: how much ROI existed for companies that pioneered using the internet to do business, or even email for that matter? Looking at the technology itself is no help. For example, the ROI for your corporate Local Area Network is difficult to quantify, but there is no longer any question as to whether is has enough value to pay for itself or not. If you change the paradigm from what RFID IS to what RFID DOES then you have an Industrial Engineering (IE) or Cost Engineering (CE) question, with a fairly well defined method of approach.