Companies with international reach, such as Wal-Mart and Marks & Spencer, are using it to provide accurate goods tracking; to ensure more efficient stockholding and demand forecasting; to create simpler, more streamlined processes; improve overall efficiencies in the supply chain and even boost governance.

Adoption is expected to continue with the Wireless Data Research Group (WDRG) announcing that the market for RFID hardware, software and services will increase at a 23% compound annual growth rate (CAGR), from more than $1bn in 2003 to $3bn in 2007. However, transition from one management methodology and technology to another is never simple.

The local market is eagerly anticipating the adoption of RFID technology, which has the potential to increase efficiency and reduce shrinkage. Icasa is in the process of finalising the bandwidth allocation for RFID, further driving interest in the local market.

When investing in RFID, local users should consider a number of issues. Many of these will relate to strategic issues that influence the adoption of any new technology, such as the current dearth of technical skills to install and support these solutions and the need for integration of RFID solutions with other systems - including current ERP systems and manufacturing applications - to achieve the desired supply chain-wide interoperability and functionality.

Says Dugmore: "It is, therefore, imperative for the local market to investigate RFID as a technology, enabling companies to make informed decisions. As the technology is relatively new to the supply chain environment, empowering yourself with knowledge is key in going forward."

There are important matters regarding the technology itself and how it is implemented that will impact the long-term success of RFID for organisations and for SA as a whole. Standards play a particularly important role, especially how data in encoded in RFID tags for it to be accepted worldwide. This forms the basis for compatibility across the supply chain, and components such as readers and tags should work in a heterogeneous environment. Reader types and tags must also suit the application for the maximum benefit to be derived.

Dugmore reiterates: "Learning as much as possible about these standards and ensuring equipment is ratified by the EPCglobal - a body that leads the development of industry-driven standards for the Electronic Product Code (EPC) - will ensure a smoother transition to RFID in the supply chain."

Solutions that offer ease of transition from legacy to new systems should also be considered. To maximise the benefits of RFID the whole supply chain environment should be involved. This includes the retailer, its manufacturers, transportation and logistics among others.

Dugmore suggests: "If implementing a pilot site, it is beneficial to drive participation from 'front and behind' partners such as the supplier and retailer. This extends the benefit down the supply chain, and delivers not only internal benefits but external ones too. For example, an external benefit is achieved when a transportation agent collects goods from the manufacturer and makes use of the same tag attached to goods until it is delivered to the last link within the supply chain. All components within the supply chain make use of one RFID tag, thus reducing costs."

"It should be noted that RFID is not a 'one size fits all' technology, and each application must be evaluated individually to establish the correct approach and solution. To ensure a successful choice, speak to industry players that are in the know and adhere to guidelines and products endorsed by recognised standards bodies such as the EPCglobal, and ensure that your strategy makes provision for the transition to new systems."

The supply chain stands to benefit significantly from RFID which, if implemented correctly, can be a valuable tool to increase efficiencies, reduce losses and deliver a smoother operation. Rather than assessing the cost of the solution, establish the savings by implementing RFID within your environment.