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CES 2008: Making money with RFID

HP demonstrates its ideas on how to get ROI from RFID technology.

The Consumer Electronics Show isn't just about gadgets and devices. It's also the home of several parallel conferences, including the Consumer Electronics Supply Chain Academy. Stepping off the beaten track of the conference floor can lead you to some interesting sessions, including details of how companies such as HP have been working with RFID tags.

The company has 33 manufacturing and distribution sites that are RFID equipped, and in 2007 it tagged 19 million cases, using 277 RFID readers and 202 RFID label printers. Many of HP's RFID sites are run by partners and contractors.

HP has had to be innovative. In one case antenna had to be redesigned. "RFID scanners have problems working around liquids and metal - and what we have with inkjet cartridges is a metal can of liquid," said HP's global RFID programme director Frank Lanza.

One successful implementation used RFID to handle printer product returns. Bundled cartridges have a finite life and boxes needed to be individually checked for cartridges that needed replacing. RFID tags on the boxes mean scanners can identify only the boxes that need to be opened. This improved cycle times by 50 per cent, increased capacity by 70 per cent and cut labour costs by $500,000 (250,000) a year; the project cost $1 million (500,000) but it will pay for itself in less than two years.

RFID ROI comes from various directions; improving supply chain operations, monitoring service levels and keeping products moving. "We're seeing that the product moves from the stockroom to the floor, enabling us to see what's in the back room that hasn't been brought forward to the shelves," said Patrick Javic, the industry development manager for RFID standards body EPCglobal.

RFID can show who's to blame if time-sensitive products like DVDs don't arrive in stores in time for release dates, so you can invoke contract penalties. It can also be used to store after sales information, for example linking to a product recycling information.

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