Managing Automation - May 2008 - (Page 43)

ing business with Sam’s Club. It’s the specter of item-level tagging that truly worries Pettigrew. “They have told us that they desire to go to item-level tagging in 2009, which is not that far away. We need to have some discussions with [Sam’s Club] to understand the impact to both our businesses because that could get pretty expensive,” he says. “I think we’re in the same category as many of those other [CPG companies],” Pettigrew adds. “We do find it difficult to justify the item-level tagging — to find ROI in the item-level tagging.” Sam’s Club, of course, sees RFID as more than simply a cost item for its suppliers. “We see there’s potential benefit down the road in terms of inventory and supply chain management, [and] cost reduction,” says Koehler of Sam’s Club. She also points to the revenue benefit of having products in the right place at the right time, as well as the ability of manufacturers to more efficiently recall products. WHERE’S THE BEEF? The concept of establishing a return on RFID investments, though greeted with suspicion by many manufacturers, has its believers. Numerous analysts and Sam’s Club officials point to the success of Daisy Brand, an overachieving packaged dairy foods company that actually opted into the Wal-Mart RFID mandate and managed to improve its operations in the process. ABI’s Poorman marvels at just one of the company’s successes: its ability to shrink the time needed to In the face of load product on a truck from one hour to 20 minproduct-tagging utes, as a direct result of RFID tracking. The consensus is that it takes more than a mandates from slap-and-ship approach to generate a return. The Wal-Mart and company that gets back more than it puts in will other retailers, be the one that creates a business strategy manufacturers are around RFID information. looking for the “Certainly if you treat this as purely a cost-add ROI in their RFID item you’ll get no substantial gain from it,” implementations. Poorman says. Progressive-minded companies see an RFID mandate as a trigger to create better visibility into their operations, he says. A good starting point, he says, involves the question, “Where do they not know what’s going on? Are there opaque areas to their operations?” In his advice to CPG compamanagingautomation.com nies, ARC’s Banker says, “Keep it small, track your ROI, and RELATED ARTICLES: Going Green take it one little step at a time.” www.managingautomation.com/green For now, Huhtamaki is doCashing In on the Promise of RFID ing just that. www.managingautomation.com/rfid10 “We’re going to move forIndustry Update: RFID ward with it. We’re going to www.managingautomation.com/rfidupdate get it done,” Pettigrew says. News Analysis: Partners Take Pragmatic “I’m not getting a whole lot of Approach To Spur RFID Adoption in CPG negativism from any of the Space folks I work with. It’s just that www.managingautomation.com/rfidcpg going forward, if we have to look at the item-level tagging, COMPANIES MENTIONED: then we’re going to have to NCR www.managingautomation.com/ncr take a hard look at how to get ROI on that.” I maonline Photo courtesy: Wal-Mart 43 May 2008 http://managingautomation.com http://www.managingautomation.com/green http://www.managingautomation.com/rfid10 http://www.managingautomation.com/rfidupdate http://www.managingautomation.com/rfidcpg http://www.managingautomation.com/ncr

Table of Contents Feed for the Digital Edition of Managing Automation - May 2008

Managing Automation - May 2008 Contents Take 1 Award-Winning Shoe-Maker Otabo Alters Course, Shifts Production to China IBM Partners with Universities for Cloud Computing Getting Noise in Production Under Control Incuity Embarks on a Vertical Market Strategy Foundation Intensifies OPC Standard Testing Mailbox Notes PM Roundtable Cover Story: The Business of Going Green Special Report: Night and Day Delivering on Promises Finding the Right Fit for Wireless Driving RFID Product Scan Advertiser Index Next

Managing Automation - May 2008

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