Determining Justification for Rfid Technology
Running Head: DETERMINING JUSTIFICATION FOR RFID TECHNOLOGY
Determining Justification for RFID Technology
Bahram Izadi, Master Student of Business Management, University of Isfahan, Isfahan, Iran and John Boyd, BASc, Computer Engineering, University of Ottawa, Ottawa, Canada
Abstract
"What are the benefits?" is a common question for any organization considering implementing a new technology. This is an especially important question for small or developing companies, where an error in investment could result in unrecoverable operating capital loss. As Radio Frequency Identification (RFID) systems are making deep and impressive improvements in manufacturing, distribution, and supply chain management and military logistics, it is time to consider the quantifiable financial and operational benefits of RFID in an organization 's competitive strategic plans. This article will review the benefits of RFID implementation against its costs, and demonstrate how the introduction of an RFID system can reduce production, distribution, and warehousing costs, while increasing the operational efficiency of an organization. Through financial metrics, value equations, and numerical analysis this article will demonstrate how RFID implementation can improve not only an organizations bottom line, but also intangible benefits such as internal focus, industry leadership, and differentiation from its competitors. A sample business case study will be presented to demonstrate to the reader valuable insight to both real-world advantages and limitations associated with RFID adoption. 1. Introduction
The focus of this paper is how to develop an RFID strategic plan to quantify RFID justification through return on investment (ROI). RFID offers strategic advantages for businesses, private or state organizations because it can improve efficiency, cost savings, and yield greater returns in virtually all areas of business processes and operations. However due to the
Determining Justification for RFID Technology
Bahram Izadi, Master Student of Business Management, University of Isfahan, Isfahan, Iran and John Boyd, BASc, Computer Engineering, University of Ottawa, Ottawa, Canada
Abstract
"What are the benefits?" is a common question for any organization considering implementing a new technology. This is an especially important question for small or developing companies, where an error in investment could result in unrecoverable operating capital loss. As Radio Frequency Identification (RFID) systems are making deep and impressive improvements in manufacturing, distribution, and supply chain management and military logistics, it is time to consider the quantifiable financial and operational benefits of RFID in an organization 's competitive strategic plans. This article will review the benefits of RFID implementation against its costs, and demonstrate how the introduction of an RFID system can reduce production, distribution, and warehousing costs, while increasing the operational efficiency of an organization. Through financial metrics, value equations, and numerical analysis this article will demonstrate how RFID implementation can improve not only an organizations bottom line, but also intangible benefits such as internal focus, industry leadership, and differentiation from its competitors. A sample business case study will be presented to demonstrate to the reader valuable insight to both real-world advantages and limitations associated with RFID adoption. 1. Introduction
The focus of this paper is how to develop an RFID strategic plan to quantify RFID justification through return on investment (ROI). RFID offers strategic advantages for businesses, private or state organizations because it can improve efficiency, cost savings, and yield greater returns in virtually all areas of business processes and operations. However due to the
References: Lahiri, Sandip (2005, August). RFID Sourcebook. Prentice Hall PTR. ISBN: 0-13-185137-3 Larsson, Björn & Qviberg, Ola (2004, December) 1 Association for Automatic Identification and Mobility. What is RFID? Retrieved September 2, 2008 from http://www.aimglobal.org/technologies/RFID/what_is_rfid.asp 2 Axios Systems. (2007, March) Return on Investment: Fact or Fairy Tale? White Paper. Version 1.1.0 Retrieved September 5, 2008 from Retrieved September 5, 2008 from http://www.rfidlabeling.com/common_applications.html 4 RFID Journal 5 RFID Journal. FAQ - What are some of the most common applications for RFID? Retrieved September 8, 2008 from http://www.rfidjournal.com/faq/16/56