Miss Parts I and II? Here they are: Part I,, and Part II
Step 7. Develop investment requirements
Of course, your business case isn't complete without information about what your company needs to invest in order to get RFID up and running. Your team needs to estimate the costs of hardware, software, implementation, integration, training, and support. In the ROI example in Chapter 16, I explain the cost categories you need to address, and I discuss their key characteristics, which will help you estimate accurately.
Step 8. Develop an implementation road map
In this step, you determine the implementation plan in order to understand the timing of the benefits and costs for the business case. The main tasks involved in completing this step are:
- Developing a pilot concept. Smaller, controlled projects that sequentially test RFID technology, infrastructure, and collaboration with trading partners.
- Develop a rollout concept. Following piloting, this is the path to production for all products in scope.
- Apply benefits and costs according to the timing of the implementation
Make sure you know when you need to be in compliance with any mandates. If a customer or regulatory body requires you to be RFID-compliant in production at the beginning of 2008, you need to plan around that event. Before 2008, you need to complete, at a minimum, a portfolio of pilot projects and a limited rollout.
Deciding when to implement RFID
When deciding when to implement RFID, consider why you are toying with it in the first place. There are three generally-normally-usually-almost-all-the time distinct reasons to implement RFID:
- Your company has been hit with a mandate to do so. For example, Wal-Mart insists that all cases be tagged. This creates a concrete deadline, and you need to look back 6"12 months from that deadline and plan accordingly so you that are live on the required date.
- You are convinced via an ROI study that your internal business process
will benefit in a tangible way from the adoption of RFID, so you want to incorporate the technology as soon as possible to realize that ROI and its strategic benefit. In this case, the timing can align with your normal business planning cycle and fit in your strategic and budgetary process.
- You aren't under a mandate but believe that you will sell more product to a big retailer if you proactively tag your cases. This instance is similar to the preceding example; however, you'll probably start out by just wetting your feet--to get tags on the minimal amount of products and then evaluate to see whether the potential long-term impact is as good as you might expect.
Although you may believe that the ROI hurdle rate will be achieved in a year or two (or simply feel like hunkering down under your desk and waiting for this RFID phenomenon to pass), there are more reasons to act now than there are to postpone the inevitable. A lot of those reasons center around creating in-house expertise and understanding RFID's impact on infrastructure and business processes. You might need to change everything from packaging to warehouse management systems. Beginning to understand the potential areas for change today will help you plan over the next couple of years when ROI is clearly positive or competitive factors in your industry dictate the use of RFID.
As you consider the timeframe for implementing RFID, you also need to watch closely what your competition is doing. Are they deploying RFID or simply playing with it? Have they gone to their customers with the promise of being RFID-compliant? Does your industry do a lot of business with Wal-Mart, the DoD, Target, or Albertsons?
Timing should be driven by ROI, competitive analysis, client requirements, and potential economies of scale in infrastructure--like doing it when you upgrade your enterprise resource planning (ERP) or warehouse management system (WMS) applications.
Decide whether to implement the entire plan at once
You've heard the expression, "Think globally, act locally." The same applies to an RFID implementation, although in this case, it's "Plan globally, implement locally." Although I emphasize that RFID is a company-level project throughout this book, the implementation is likely to take place in just one or two warehouses or manufacturing facilities. I know you're not a doctor (or haven't played one on TV), but think like a surgeon for a minute. You have a patient who requires treatment in many different areas. As his surgeon, you strategize a treatment plan that will eventually cover all his apparent ills--but you can't operate on them all at once. You might start by operating on the knee, and then on a subsequent day, you might tackle the elbow. In similar fashion, your RFID implementation must be surgically precise.
Because logistics is usually the first part of the company to be confronted with the RFID phenomenon, it is a logical place to pilot the technology. Some companies start with read-only tags where the numbers are pre-programmed.
Although this strategy saves a step or two in a slap-and-ship process, it creates headaches later in data management. Read/write tags allow companies to reach back way into the product life cycle and achieve the maximum benefit from the technology. Starting with read/write tags a little at a time is usually your best bet when you go to an actual pilot deployment.