If you want to get real value out of your radio frequency identification deployment, the first thing to do is to put a stop to all that mindless slapping and shipping.

A radio frequency identification (RFID) tag—a piece of plastic or paper that contains a wireless transmitter and an embedded microchip that stores basic information—can track and report the movements of a tagged object. That's a good thing. But slap and ship deployment—that is, slapping RFID tags onto cases, pallets, or products, sending them on their way, and then using the tags as nothing more than high-tech tracking devices—won't give you the best return on your investment.

"To really realize ROI from RFID, companies need to see this technology as a way to collect valuable business intelligence that can help them cut costs and increase profits," says Manish Bhuptani, director of market development at Sun Microsystems.

Bhuptani, with coauthor Shahram Moradpour, has written a book, RFID Field Guide: Deploying Radio Frequency Identification Systems, which provides an in-depth practical look at the best practices and pitfalls of RFID deployments. He believes that before companies start tagging anything, they should first consider what their business goals are and how information gleaned from RFID could help them achieve these goals.

Getting the ROI into Retail RFID

Recently some retailers and suppliers needed to quickly implement RFID technology because of mandates by major retail partners such as Wal-Mart, which required that its top 100 suppliers be RFID-compliant by January 2005. Bhuptani recommends that in these cases companies do simply slap and ship, and then consider what other benefits they can gain from the deployment.

Whether RFID is instituted because of a mandate or deployed as a company-chosen initiative, when it is utilized properly, as a fully integrated part of a business, retailers can use RFID to track assets, ensure timely delivery and receipt of goods, and collaborate with suppliers and partners to improve fundamental business processes across the entire supply chain. Retailers achieve these benefits by analyzing what RFID data is trying to tell them: Where are the products, where should the products be, and do they have what they need when they need it?

Information gleaned from the tags can alert retailers to potential stockouts of popular items in time to do something about the situation, validate the authenticity of received goods, allow retailers to know exactly where goods are in every step of the production and shipping process, and much more, says Bhuptani.

"One of the keys to realizing ROI from RFID is finding ways to use the information from the tags in the same way as you'd use any type of business intelligence," says Bhuptani. "Sun is working with our partners to develop solutions that really put RFID to work."

I Can See Clearly Now

Sun and SeeBeyond Technology recently formed a technology and marketing partnership to deliver combined products for building service-oriented architectures (SOAs) and for processing and using RFID data gathered by a retailer and its supply chain.

"Clearly, SOA is emerging as the preferred service delivery mechanism for forward-thinking IT strategists," says Jim Demetriades, CEO of SeeBeyond. "As customers standardize on the Java Enterprise System for their core infrastructure, it's only natural that they would extend this platform to include a complete SOA-based composite application development environment to drive their integration projects, thus improving core business operations, reducing development costs, minimizing risk, and accelerating ROI."

SeeBeyond will port components of its SeeBeyond Integration Composite Application Network (SeeBeyond ICAN 5) Suite to the Sun Java Enterprise System. ICAN 5 modules enable users to bring together disparate enterprise network systems and resources. The two companies will initially focus on solutions for RFID and portal application development, which will then be jointly marketed and sold by Sun and SeeBeyond.

One solution that Sun and SeeBeyond are close to releasing is a joint end-to-end offering specifically for the retail market. This solution features the interoperation of Sun's Java Enterprise System RFID software and SeeBeyond's ICAN 5 Suite, which allows organizations to make better use of systems already in place; connect seamlessly with partners, suppliers, and customers; and automate core business processes to improve operations.

With Sun and SeeBeyond's joint solution, Sun's RFID software processes data coming in from RFID readers and integrates it with existing business applications, where it can be put to good use. The collected information is then sent to the SeeBeyond platform for distribution to business partners and enterprise back-end systems such as SAP or Oracle.

"RFID will give a significant competitive edge to retailers who use it as a source of real-time information. Solutions like Sun and SeeBeyond's that bring RFID data directly into business collaboration and decision-making applications are exactly what retailers need," says networking systems consultant Edward Addams. "Taking the flow of data produced by RFID and transforming it into actionable information makes RFID both practical and profitable."

Retailers will soon be able to see the Sun SeeBeyond joint RFID solution in action at Sun's RFID Test Center in Dallas.