RFID for Business Intelligence

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October 31, 2005

RFID Opens the Doors for new uses of Information

For the true Business Intelligence enthusiast, RFID is a dream come true. For those that are new to the technology, I’ll give you the 20 second intro. RFID stands for Radio Frequency Identification. In a nutshell, its the ability for products (or any other object of interest) to identify itself without human intervention. An RFID tag (composed of a tiny chip and antenna) can be affixed to a product for identification purposes, much like a UPC on a barcode. However, unlike the barcode, the RFID tag can announce its presence remotely and automatically (requires no line-of-site and hundreds of tags can be read simultaneously and instantly). That is, it does not require a human to scan it. Rather, the tag can transmit information to Readers that are in the general vicinity - say 10-30 feet (or longer depending on the type of tag). This means that collection of product information and events can be automatic.

The classic example is a warehouse distribution center where pallets of product move in and out. If the products are equipped with RFID tags, then a full account of what products enter and exit the warehouse can be collected automatically by simply placing RFID readers at the dock door. Supply Chain Optimization analysts are thrilled because RFID will speed up the processes for Shipping, Receiving, Picking, Packing, ... etc., resulting in reduced costs and increased production.

However, us BI geeks recognize the value RFID brings beyond the operational efficiencies. We see it as the silver bullet to detailed event information, giving us new visibility into every product movement. Because RFID reduces the cost to collect product events, more events will be recorded and recorded more frequently. What was once only inferred, or studied based on a limited sample, can now be analyzed regularly on a second-by-second basis.

How long did the product sit on the shelf?

What was the dwell time at the distribution center?

How fast did the stock boys move inventory to the sales floor?

Was this product ever returned? Removed from the shelf? Brought to the dressing rooms?

What employee assembled the product?

With RFID, information that can answer these and other questions can be collected automatically. The potential analyses are endless. The doors are wide open for new insights into how to run our business more efficiently.

So, this blog ... its a forum to chat about any use of RFID-enabled information. It does not necessarily have to be about the strategic use of information that us BI-ers love to tout. Most of the RFID implementation have not gotten there yet. Operational initiatives generally come first (such is life). Thus, comments and discussion about challenges in read rates, tag costs, and vendor selection are all welcome. In the long-run, it is my hope that this blog will foster ideas for innovative uses of this new data collection technology.

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Posted by Eric Colson at 2:00 AM | Comments (6) | TrackBack