Calculating Costs of Radio-Frequency identification

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Is your warehouse up to snuff?

Thanks to Wal-Mart Stores Inc.'s edict to its suppliers, RFID is coming to a retail supply chain near you.

The good news is that your new pal Wal-Mart has put on the suppliers the burden for buying and placing the millions of RFID tags that will be needed. Your challenge, then, is to figure out exactly how RFID will integrate into and improve supply-chain systems. "Don't boil the ocean," says Christine Overby, a senior analyst at Forrester Research Inc. It's too early in the RFID game, Overby says, to reinvent business processes around a technology that will likely take seven to 10 years to become fully realized in the supply chain.

Instead, stay on the leading edge by teaming with an RFID-logistics consultant to guide you through a one-year pilot. Deploy RFID at one of your distribution centers and three of the stores it serves. Work through the application-integration hurdles and push the new-and-improved data into your warehouse-management and enterprise-resource-planning systems.

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