What’s Keeping You From Adopting RFID? Part 1

An RFID technology undertaking requires extensive background knowledge and careful planning. That’s part of the reason why many companies have been hesitant to adopt or even research an RFID system thus far.

What they don’t know, though, is that the money and effort put into an RFID deployment will come back to them. When considering RFID, companies must consider the monetary benefits of solving operational challenges. Research shows that companies lack an understanding of RFID technology and the benefits it can provide, and have therefore overlooked the potential of the technology.

In fact, a GAP Marketing Research Survey conducted in March 2013 listed a lack of knowledge and perceived expense of RFID as the primary obstacles to RFID adoption.

The survey assessed the understanding and use of RFID in the manufacturing sector, specifically how it contrasts with barcode technologies. The study’s sample was taken across all manufacturing industries, focusing on mid-sized facilities and spanning many titles and roles from staff to executive.

The study elicited four conclusions about manufacturers’ knowledge and perception of RFID:

1. RFID is not as well understood or as utilized as barcode technology
2. Knowledge and perceived expense of RFID are the primary obstacles to adoption.
3. RFID has a unique value proposition when compared to barcode technology
4. Tracking of materials from raw goods, through work-in-process (WIP) and on to finished and shipped goods is viewed as the most popular area of use/need.

Now let’s make sense of those conclusions. Part 1 of this blog will focus on the first two conclusions and how they relate to one another. Part 2 will focus on the third and fourth conclusions.

Barcode technology is still widespread, although RFID is on the rise.

One explanation is that many companies simply do not know enough about RFID yet, including the different types of RFID, and therefore are unaware of the benefits it can provide. The GAP study reported that barcode technology is still the most widely accepted and used of the two technologies. The majority (91 percent) of manufacturing professionals surveyed said they were familiar with barcode technology, while understanding of RFID—particularly the various types of RFID—remains limited. Nearly three-quarters of companies (72 percent) are currently using barcode technology to some extent.

However, the knowledge and use of RFID is definitely on the rise. Sixty-seven percent reported that they were familiar with RFID, and one-fourth said they use it.

Companies are unaware of the ROI that RFID could provide.

As mentioned, when asked what they see as the greatest impediments to RFID use at their companies, 20 percent of respondents (the highest vote) said “lack of knowledge and understanding of RFID.” The second highest vote was “too expensive” (18 percent). These numbers suggest that companies don’t understand the relative return-on-investment (ROI) associated with implementing RFID technology.

Because many manufacturing professionals lack an overall understanding of the technology, they are also unsure of the benefits that RFID-related hardware and features could provide. Many responded with “I don’t know” when asked about the RFID readers that might be used in their companies or RFID tag characteristics that might be important in respondents’ locations. If companies were more familiar with the capabilities of readers and tags, they might have a better understanding of their role in improving operations.

Companies using barcode technology are open to change.

In general, companies seem to be losing confidence that barcode technology can provide value to their operations. Only 32 percent of respondents believe barcode technology could do what their companies need; one-third said barcode technology falls short of meeting some of their needs; and nearly half said RFID technology can do things for their company that barcode technology cannot.

Breaking Down the Barriers to RFID Adoption

While RFID has entered the public eye over the past ten years, too many organizations remain on the sidelines without pushing beyond research. Many of those hesitations are in fact not tied to the technology itself but uncertainty around implementation, integration and long-term value.

With businesses under pressure to better their inventory accuracy, asset visibility and operational efficiency, RFID is maturing from an emerging technology to a strategic investment. Organizations need to know what successful deployments look like so that they can decide if RFID will meet its operational goals.

RFID Features And Uses It Is Refined To Work Within Pre-Existing Systems

The most common one is that implementing RFID means you need to replace what you are using now, which is barcodes. Conversely, many enterprises do rely on a combination of the two technologies in order to build a more complete tracking solution.

For plenty of workflows, barcodes are still a viable solution, and RFID introduces capabilities where automation and visibility in real-time are paramount. RFID can be integrated into the business processes as necessary without rip-and-replace of existing infrastructure based on operational requirements.

This gradual approach enables organizations to review outcomes before extending deployment to more facilities or business units.

Identifying the Right Use Cases

Not every business process requires RFID. The greatest value comes from applying the technology where manual tracking creates bottlenecks or where visibility is limited.

Common RFID applications include:

• Work-in-process (WIP) tracking
• Inventory management
• Asset tracking
• Tool tracking
• Returnable container management
• Warehouse automation
• Shipment verification
• Equipment monitoring

By focusing on targeted operational challenges, businesses can achieve measurable improvements while controlling implementation costs.

Integration Makes RFID More Valuable

RFID generates valuable data, but its true impact comes from integrating that information with enterprise systems.

When connected to ERP, warehouse management systems (WMS), asset management platforms, or inventory software, RFID data can automatically update inventory records, trigger workflows, and support business reporting without manual intervention.

Integrated systems help eliminate duplicate data entry while providing greater visibility across the entire supply chain.

Employee Adoption Is Just as Important as Technology

Successful RFID projects involve more than installing readers and tags. Employees must understand how the technology fits into existing workflows and how it supports their daily responsibilities.

Organizations often achieve stronger adoption by:

• Providing hands-on training
• Introducing RFID in phases
• Clearly communicating operational benefits
• Standardizing new workflows
• Offering ongoing technical support

When employees see that RFID reduces repetitive tasks rather than creating additional work, adoption typically becomes much smoother.

Measuring Success Beyond Cost Savings

While reducing labor costs is often a primary objective, RFID delivers value in several additional areas that may have an even greater long-term impact.

Organizations frequently measure success through improvements such as:

• Higher inventory accuracy
• Faster inventory counts
• Reduced asset loss
• Improved order fulfillment
• Better regulatory compliance
• Increased equipment utilization
• Shorter production cycles
• Greater supply chain visibility

These operational improvements contribute to better customer service and more informed business decisions.

Planning for Scalability

Businesses should also consider how RFID will support future growth. As operations expand across multiple facilities or distribution centers, tracking requirements become increasingly complex.

Choosing scalable RFID solutions allows organizations to:

• Add new readers and antennas as needed
• Expand to additional locations
• Track more asset types
• Integrate new enterprise applications
• Support evolving operational processes

Planning for scalability from the beginning helps protect technology investments while reducing future implementation challenges.

Working with Experienced Technology Partners

Every RFID deployment is unique. Factors such as facility layout, asset types, environmental conditions, and operational workflows all influence system design.

Working with experienced solution providers can help organizations evaluate:

• Appropriate RFID hardware
• Tag selection
• Reader placement
• Software integration
• Network requirements
• Testing and validation
• Ongoing support and maintenance

A well-designed deployment minimizes risk while helping organizations achieve faster returns on their investment.

Looking Beyond the Initial Investment

The most common mistake organizations make is to think of RFID as a technology purchase. This is an operational improvement program that allows organisations to automate the collection of data, enhance visibility, and augment decision-making.

Since companies are moving towards more digital transformation, element capture becomes an even more important function in gaining accurate & real-time information. Organizations that consider RFID in terms of future operational savings rather than up-front investment costs tend to be better positioned to increase performance, eliminate manual processes, and support changing business needs.

When exploring opportunities to modernize inventory management and asset tracking, or warehouse operations within their organizations, companies can leverage RFID as a flexible platform that will grow right along with their business, offering measurable ROI across the supply chain.