'Slap and ship' OK for RFID says analyst
Forrester Research is advising suppliers to go ahead with a slap-and-ship approach to radio frequency identification (RFID), despite warnings from leading retailers such as Tesco that jumping straight in may lead to problems later on.
During a live Webcast this week, Forrester senior analyst Christine Spivey Overby said that despite its long-term benefits, so-called source-tagging -- integrating RFID technology into the heart of the manufacturing processes -- would be prohibitively costly at the moment for the average supplier.
"To really achieve the benefits from this technology manufacturers need to do source tagging, but this will be very difficult to achieve this year," she said.
Instead, Overby advised companies to begin by adding tags further down the supply chain, at the distribution centre level -- a process know in some circles as 'slap and ship'. "Start with a slap and ship approach. It might sound controversial but very few manufacturers are really in a position to do source-tagging at the moment," she said.
Overby's comments contradict the approach of UK retailers such as Wal-Mart and Tesco, which have adopted ambitious RFID adoption plans for their supplier base.
Speaking at an a recent conference organised by UK RFID standards organisation e.centre, Tesco IT director Colin Cobain argued strongly against the slap-and-ship approach. "Some manufacturers seem to be going down the route of slap and ship. If you start slapping and shipping you will get the technology a bad name in your organisation," said Cobain.
Cobain argued that companies need to adopt a thorough approach to the technology from the beginning, and avoid an approach that contains no overall strategy beyond attaching the chips and pushing the product out the door.
BT Auto-ID Services, the telco's RFID business group, has also argued against slap and ship -- advising customers to adopt an aggressive approach to the technology.
"RFID isn't as expensive to implement as you think. When we mention that the only way to go is to get your feet wet, then that's a 50k decision, it's not a 500k decision. At the end of the day most large companies don't need an away day to make that kind of commitment," said BT RFID manager Geoff Barraclough.
Forrester has been one of the few voices advising caution amid the considerable hype surrounding RFID. At the end of March, the analyst issued a report warning that most RFID technology is still immature and it would cost the average Wal-Mart supplier up to $9m (£5.02m) dollars to comply with the mandate.
"There is no business case for most suppliers in the short term," said Forrester Research senior analyst Christine Spivey Overby. "The technology is not ready, and there is a lack of deep expertise in the industry to help suppliers implant RFID."
BT claims its plan is to make RFID affordable to customers and avoid the need to build expensive bespoke systems. "We disagree with Forrester that it's $9m to comply with Wal-Mart," says Barraclough.
Tesco's Cobain said as far as he is concerned, the technology has passed his three-point test -- better, simpler and cheaper -- and it's all systems go. Tesco plans to have readers and tags in all the key points of its supply chain, and has carried out four significant trials to date, including an item-level tagging project with Gillette. Meanwhile, Wal-Mart has set the deadline of January 2005 for 100 of its top suppliers to be RFID-enabled.
For more on RFID, check out the IT Priorities RFID Special Report and Toolkit