Some manufacturers get early RFID payoff

13.03.2006
The use of radio frequency identification (RFID) tags is providing a payoff to some manufacturing firms despite some technology hiccups and high price tags.

Users at the RFID World conference here last month said that as the technology matures, it is starting to show a solid return on investment. Indeed, some said the technology is delivering a unique look into the manufacturing supply chain.

James Jackson, director of vendor relationship management at clothing manufacturer VF Corp. in Greensboro, N.C., said that RFID technology is helping his company ensure that merchandise tied to time-sensitive events like the Super Bowl is on store shelves at the right time. Since implementing its RFID system, VF can notify stores when tags report that inventory is stockpiled in back rooms instead of being on the sales floor.

The RFID program will help VF reduce the amount of payments it makes to Wal-Mart Stores Inc. in the form of fees that the retail giant charges suppliers when it says it hasn't received an item ordered. The tags let VF verify when items are shipped and arrive at the stores.

Some users at the conference warned their colleagues that RFID can still carry a significant price tag despite the benefits.

"In reality, it costs money," said Jim McMasters, senior vice president of information systems at Tandy Brands Accessories Inc., a maker of fashion accessories.