Source: Computer Economics
Over the past several years, Radio Frequency Identification (RFID) has been promoted as the next big thing in supply chain and asset management. The promised benefits of RFID include productivity gains in the warehouse, better product visibility in the distribution channel, improved inventory accuracy, less shrinkage, a reduced number of transaction errors, better asset tracking and utilization, and easier detection of counterfeit products, such as fashion items. Mandates from the U.S. Department of Defense and major players such as Wal-Mart now require their suppliers to label shipments with RFID tags, which forces adoption of the technology.

Despite these factors, the adoption rate of RFID technology has stalled significantly in the last year. This slow-down is not being publicized by suppliers of RFID equipment and systems, since their success depends on continued promotion of the technology. Some reports of an RFID slow-down, however, are beginning to appear in the business press. For example, the Wall Street Journal recently reported that Wal-Mart has only installed RFID in five of its distribution centers, which is well behind its plan two years ago that called for 12 of its distribution centers to be up and running by now. The same article reports that apparel maker VF Corp. has curbed its RFID program, citing an absence of payback for its efforts in the foreseeable future.

This Research Byte is an executive summary of our full report, Radio Frequency Identification (RFID) Adoption Stalls.