Theory and Practice, April 11, 2005: Create RFID Program Value with an "Options Thinking" Investment Strategy

This Manufacturing Insights update discusses the benefits of using "options thinking" as an alternative to the traditional ROI strategy when evaluating RFID. Faced with highly publicized customer mandates, many manufacturing companies were faced with a must-do RFID project but were not able to justify the project using traditional ROI models. As a result, a number of these organizations took a minimalist IT investment approach and implemented a lowest-cost, nonscalable, "slap and ship" RFID solution. This cost-driven decision has limited these companies' future ability to provide a scalable integrated RFID solution, and, as a result, these slap-and-ship solutions will probably need to be replaced within a few years.