From A Management Perspective To Assess How The Rfid Technology, Value

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Since the analysis of scholars and experts RFID Application until the following labels will be reduced to five cents U.S. began to flourish, the fifth of the money has become something of a magic number, and the success of RFID tags also seems tied to whether the continued decline in costs to meet everyone the expectations of five cents, but the price tag should not be about the decision-making basis for enterprises to adopt RFID or restrictions.

From the perspective of economics or management, profit = (price? Unit cost) * Sell Volume? Other costs is an identity, the profit from the difference between revenue and costs, while the profit maximization has become management targets. Therefore, whether the management practices or IT Tools, are all committed to reducing the various costs (operating costs, inventory costs, raw materials and labor and other direct costs) or to enhance product competitiveness in the market (higher quality, perceived value and volume) to achieve this goal. Any management approach or tool, can also be based on their cost of investment required, risk, and is expected to raise prices or sales volume to assess their return on investment (ROI).

Cost point of view, although the use of RFID labeling because of the relationship between the unit costs caused by higher costs but can be assessed from the following number is expected to bring cost-effective:

1. Inventory costs: raw materials, WIP and finished goods inventory costs. RFID can help managers be more accurate to control the production line, in-transit inventory and retail end, to avoid duplication provides raw materials such as waste materials and improve inventory turnover, inventory management, but also can reduce labor costs.

2. Wait Cost: To be expected in the process or wait for the time spent in manual processing. As the RFID sensor with automatic features, so check out the goods, quantity and checking can replace the manual process and avoid or omissions due to lack of manpower caused by the waiting cost.

3. Communication cost: the cost of the confirmation message that the two sides, such as fax, wait for a response time. Through RFID automation functions, the delivery or immediately after receiving confirmation, and by using the system immediately Electronic E-mail, EDI, FTP, SMS messages and other means to inform, communicate substantially reduce the time and cost required.

4. Quality costs: refer to in order to maintain quality of the prior, and after a matter of cost. Ju Fan in the work order process, material, assembly confirmed the shipment order items, quantity, delivery location to confirm, etc., can use RFID to confirm. In extreme cases such as medical drugs, the cost of errors that could lead to injury or even death, it is difficult to estimate the cost of its quality. RFID can serve as quality at every stage of the goalkeeper, to reduce the production of any human error, thereby reducing cost of quality.

5. Stockout cost: As the shelves out of stock replenishment is not an immediate opportunity costs arising. RFID can be the number of real-time monitoring of goods shelves, when given immediately below the safety stock replenishment may notice, and may monitor the replenishment process, implementation of products added to our operation.

Therefore the overall cost can be managed by reducing the cost to cover the cost of tags, the remaining part of the overall costs if less than the original, the overall efficiency will improve.

Us from a revenue perspective, the first price, the price can be said that the extension of consumer perceived value, if the application of RFID products can enhance the perceived value to customers, then the cost can be tagged transferred or shared by consumers, such as traceability applications, consumers may be willing to spend more money to more secure Food , Then by the application of RFID products to provide security for the appeal may form a special brand through packaging and marketing to improve the value of the product itself.

Sales of the product or brand is the result of competitive, RFID applications will improve the efficiency or quality-related applications, such as the application of RFID in the logistics industry to provide a shorter, more accurate delivery of quality, to improve customer satisfaction and greater competitiveness to our customer base. These are the views from the income, sales by value and improve to increase overall profits.

Can be seen, the cost, the label is relative rather than absolute, and can find where the benefit is key to assessing the value of RFID. Therefore, the present application is not the biggest bottleneck encountered high price tag, but the expected benefits and the import can not be precisely assessed, the reasons are often caused by a chronic shortage of domestic enterprises due to a systematic performance evaluation and experience can not wait until the needs assessment to formulate a correct assessment methods, but also the lack of accurate historical data for comparison.

We recommend intention to import the enterprise need not rigidly adhere to the so-called RFID tags or the cost of hardware, first the structure of benefits arising from the source to find hope and, through internal and external discussions that can effectively assess the performance indicators (PerformanceIndicator) , and discussions with manufacturers to develop a reasonable testing program, and indeed different records of the indicators before and after application, so contribute to a more concrete and effective way to make a decision on whether to adopt RFID. We also hope that the implementation of the public areas of the current proof of concept or demonstration projects to provide more advance in the plan and return on investment after the evaluation results for companies interested in importing as a reference.

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