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 manufacturer’s knowledge and perception of RFID:
- RFID is not as well understood or as utilized as barcode technology
- Knowledge and perceived expense of RFID are the primary obstacles to adoption
- RFID has a unique value proposition when compared to barcode technology
- 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, 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 and nearly three quarters of companies (72 percent) are currently using it 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 that 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.