Pricing: A big roadblock towards successful implementation of RFID technology
Whenever I attend seminars and conferences I get to meet a lot of professionals and businessmen from various fields who tend to be confused about whether they should implement RFID or not and one of the main reasons behind it tend to be the costs associated with it since barcode is pretty cheaper as compared to this technology. First of all I recommend them to find out whether RFID would be a match for their business or not, then I tell them to check out if RFID would be able to serve them well in their operations or not and finally whether they would be able to recover the cost of implementing the technology which is a bit high when compared to the ubiquitous barcode technology.
If we consider the ability of RFID then you would see that it is being implanted in areas of security, supply chain management, access control, transportation and asset management but this is not the end since it has further potential in the areas of public transport, baggage handling, manufacturing, health care, manufacturing and retailing and the implementation would continue to rise in the other areas too provided it’s a fit for them and offers them a better return on investment.
Among other factors the price of implementing the technology has been the biggest roadblock in its implementation. Even though the technology has been around for almost five decades but prices are still high which has made a number of first timers to adopt a wait and watch policy in this regard. Even though some companies have been offering RFID tags at five cents a piece in case of bulk orders but I believe that the price would have to come down further if the RFID industry is looking towards a faster and better implementation of the technology not only among big giants but even SMBs. Words having being going around in the industry that the prices of RFID tags need to be dropped below 3p if they would like it to be implemented in lower cost production lines. The prices having been falling of late but nobody is sure as to when it would break the ‘five ‘mark? It could be tomorrow, a few months later or even a few years and this will certainly have to take place if the industry is looking forward to a bigger implementation of the technology.
It’s expected that most of the companies implementing RFID will get a better ROI and this might motivate other companies to also give it a try. An RFID technology implementation is not just about tags and readers but also involves appropriate hardware and software infrastructure which includes middleware, servers, databases and applications and when all these things are take into consideration it could turn out to be a six digit project which may not find many takers. What needed at this point of time is the costs of the technology to touch down but in a subtle manner and certainly this wont be as easy as it seems. The RFID industry may see their margins plummet but businesses implementing RFID are also right in pinpointing that until and unless the technology comes down to reasonable level they do not see a fruitful business adoption in it and they definitely seem to be saying the right thing since there is no point in investing in something which does not gives returns The RFID industry seems to be in a state of six and seven with regards to the cost of the technology but the dust will only settle down with the passage of time. Didn’t barcode technology take time to taste commercial success? We can say the same about RFID too!!