OVERVIEW

From cans of coffee and packs of razor blades to a single pair of shoes, boxes of ammunition, or blood plasma, the supply chain of the future will include stowaway passengers tiny chips, sometimes the size of a speck of pepper, emitting identifying data to a sensor. What does this mean for a retailer? The answer to this question for a very important supply chain sector revolves around issues less publicized than the expected improvements to information, inventory control, and having the right products on the shelves so there is less chance of out-of-stocks. Labor savings and reduction of internal theft are high on the real list driving deployment. As we review the potential benefits to retailers from the adoption of RFID technology, we will see that labor and theft dwarf the other advantages, providing a typical retailer with the opportunity to more than double profits or possibly return part of the savings to consumers in the form of lower prices.

At a time when great opportunities are appearing to reap this kind of windfall, the retail sector is faced with the greatest area of pushback from upstream suppliers. The companies providing goods to the retailers have been among the most ardent RFID resistors, as they fail in general to grasp any real savings from their cooperation. In the center of this tug-of-war, RFID technology has some significant hurdles to overcome. More investments are needed by more participants, even though some of those investments may be obsolete...