The Human Factor Could Be Derailing RFID
Written by Evan SchumanRetail IT leaders today are still struggling with RFID, to find a way to salvage years of effort and to try and eek out some provable profits.
Staples Canada this week detailed some impressive results with reusable active-tag RFID, delivering an attractive 8-cent/chip cost, an extremely accurate read-rate, a sharp reduction of out-of-stocks and even a huge drop in shrink.
But most trials are having much more modest results. But even those modest improvements are not always materializing when the trials morph into full deployments and John Fontanella—a longtime RFID observer whose dayjob is VP/Research for AMR Research—thinks he may know why.
Fontanella, whose RFID projections and predictions have held true over the many years I’ve quoted him, concedes some of the technology’s challenges, but adds that a huge factor in the problem is entirely human.
"It’s going to take a lot more than technology," Fontanella said. "People are going to have to change the way they work."
Fontanella’s point is that retail managers—from the store up to the executive suite—like to make gut decisions. The most perfect-performing RFID supply-chain enhacement—or chip-powered purchasing projection—won’t help the chain’s spreadsheet unless managers are prepared to act on those recommendations regarding inventory and cycle counting.
Managers "are going to have to build dependence on RFID. Instead of routing through styles of slacks, will they trust it?" he asked.
It’s a good question and a keen observation on human behavior. The managers in the field are often the ones who are most suspicious about RFID claims. And if they internalize those suspicions and opt to ignore the recommendations, then it’s obvious the chips will have no positive impact. Textbook self-fulfilling prophecy.
This all underscores how training and getting buy-in from managers in the field is not merely an HR nicety and a morale booster. It might make the difference between the success and failure of a technology rollout.
-Marc
December 17th, 2007 at 10:12 am
The reason passive RFID failed in the supply chain is due to the fact that pilot after pilot could not produce a read rate greater than 80%. A positive ROI for passive tag RFID depends in achieving full automation, “The Internet of Things”. With a read rate of 80% or less, full automation is impossible. Improving the read rate above 80% is not possible without violating the laws of Physics.
The human factor is not to blame. the more experience companies get with passive-level RFID the more they recognize, and are forced to accept, its limitations.
December 28th, 2007 at 8:47 am
The problems with RFID extend far beyond the human factors noted in this post, though it is crucial to deal with these factors. Much of the claimed benefit from RFID can be captured without RFID using existing barcode scanning technologies. Existing technologies face the same problems with human factors. Better to address the human factors without spending millions on RFID. But also, recognize that the resistance to adoption of existing technologies reflects shortcomings in the solutions that RFID does not address. Namely, the failure to provide intuitive, easy to execute, error correction features. Today’s barcode scanning based inventory systems have higher scan accuracy rates than RFID, yet still lead to inventory integrity problems because of errors, short-cuts, and mis-labeled product. When we solve the known problems with existing inventory management systems, then we’ll know whether RFID offers additional benefit or is just a whiz-bang technology in search of a use.