Can RFID give businesses a fighting chance against hard times? A growing number of companies are convinced that it does.
By John Edwards
Dec. 1, 2011-
With the “soft” economy now entering its fourth year, by some estimates, it’s easy to understand why many business leaders are tempted to belt out a few bars of the old Merle Haggard tune “Are the Good Times Really Over?”
For many companies facing dismal markets and depressing financial outlooks, it’s not a question of getting back to business as usual, but grabbing onto a life ring that will keep them afloat for the duration. While radio frequency identification alone can’t restore the good times, a growing number of businesses are convinced the technology can help them better survive the tough period, however long it lingers, and position them to hit the ground running once the economy gets back in gear. By powering revenue-building innovations and allowing adopters to run smarter, leaner operations, RFID is filling a critical role for companies that have already made the most of all the traditional recession-fighting tools at their disposal.
“Everybody is a little scared about what’s going on in the economy,” observes Drew Nathanson, VP of the Auto ID practice at VDC Research, a technology market research firm in Natick, Mass. “There’s a lot of volatility, and volatility typically means holding onto your money.” Nathanson thinks now is the time for businesses in almost any field to consider implementing or expanding their use of RFID. “The value proposition is proven; it’s a smart investment,” he says. “The benefits adopters get are immense, especially the influence on the bottom line.”
Businesses that employ RFID to save money or create new revenue streams can protect their bottom line and market share, leaving budget slashing and employee layoffs as absolute last resorts, says Anthony Palermo, director of business development at the Academia RFID Centre of Excellence, an RFID training, certification and consulting firm in Montreal. “People are always looking to find ways to make things more efficient, but when the [financial] crisis happened, many organizations went overboard,” he says. “I think people just cut; they cut their budgets, they cut their staff—it was reactionary. Now, businesses are being proactive by looking at ways to make things more efficient.” That way, he adds, they’ll be ready if the economy falls into a double-dip recession. Here’s an in-depth exploration of why four organizations in different sectors adopted RFID during these tough economic times, and how they are benefitting from the technology.
In today’s ultracompetitive business world, manufacturers need to find innovative ways to speed production without sacrificing quality. This is particularly true in the surgical products field, in which quality lapses can lead to needless patient suffering and multimillion-dollar lawsuits. For Zimmer Ohio, a surgical products distributor based in Columbus, Ohio, RFID opened the door to both faster production runs and fewer mistakes. One of Zimmer Ohio’s primary services is supplying prepackaged surgery cases, including all the components necessary to complete operations, to hospitals, clinics and other health-care industry customers. Each case is custom-packed to include the implants, instruments, devices and other items specific to the individual surgery.
Traditionally, the company’s cases were assembled manually, scanned and processed. The system included a visual inspection for accuracy by a trained employee. It was the employee’s responsibility to determine whether there were any missing, extra or expired instruments, a job that demanded someone who knew the appropriate contents of all the various case types. The process was inherently error-prone, dependent on the employee’s skill and knowledge, as well as that person’s attention level on any given day. In other words, it was a process crying out for automation.
Zimmer Ohio turned to systems integrator RFID Enabled Solutions (RES), of Dublin, Ohio, to develop a better inspection process. RES responded with an RFID solution that includes a portal to scan and verify completed surgery cases against an order list stored in a database. If the system detects an error, it alerts a supervisor to any missing, extra or expired items in the case. The new process saves Zimmer Ohio both time and money, and eliminates the possibility of surgery-case discrepancies.
“The biggest gain was quality—the ability to meet customer requirements of 100 percent accuracy, 100 percent of the time,” says John Reese, Zimmer Ohio’s warehouse manager and leader of the company’s RFID project. “In the past, we had a preinspection system in the warehouse, and then the sales rep [stationed in the operating room] did another inspection—there were four manual inspections.” Yet, warehouse accuracy rates never surpassed 98.6 percent, which meant that any overlooked mistakes had to be detected in the operating room. “It was a problem, just because of human error and the speed at which things are moving,” Reese explains. “But now, we have 100 percent accuracy.”
Zimmer Ohio also gained the efficiency boost it was seeking. “The new system has resulted in three hours of time savings per inventory specialist per day, a 37 percent productivity increase,” Reese says.
The technology also will help Zimmer Ohio meet anticipated future growth, Reese says. “It is a growing industry, even in these recession times,” he observes. “It’s not as fast as in the past, but it is still growing and expected to even grow faster in the next few years just because of the baby boomers—knees, hips and things like that.”