Business Strategy and the RFID Challenge
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Business Strategy and the Business Strategy and the RFID Challenge RFID Challenge Dr. John Hamilton Dr. John Hamilton Consortium for Supply Chain Management Consortium for Supply Chain Management Studies Studies Saint Louis University Saint Louis University October 20, 2004 October 20, 2004
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Transcript of Business Strategy and the RFID Challenge
Business Strategy and the Business Strategy and the RFID ChallengeRFID Challenge
Dr. John HamiltonDr. John HamiltonConsortium for Supply Chain Management Consortium for Supply Chain Management
StudiesStudiesSaint Louis UniversitySaint Louis University
October 20, 2004October 20, 2004
Key Discussion PointsKey Discussion PointsStrategyStrategy
TechnologyTechnology
Value propositionValue proposition
TransitionTransition
StrategyStrategyForward lookingForward looking– 3 to 5 years3 to 5 years
Environmental impactEnvironmental impact– WalMart & DOD RFID WalMart & DOD RFID
requirementrequirement
Provides direction and Provides direction and communicates to communicates to stakeholdersstakeholders
When effective --- When effective --- competitive advantagecompetitive advantage
Why Strategy?Why Strategy?Customer demandCustomer demand
CompetitivenessCompetitiveness
Cost impactCost impact
Seize opportunitiesSeize opportunities
Why Strategy?Why Strategy?Communication to Communication to executive executive managementmanagement
A way to measure A way to measure progressprogress
A plan for the A plan for the futurefuture
Minimize the total Minimize the total costs of RFIDcosts of RFID
TechnologyTechnologyCurrent RFID Current RFID issuesissues– Will not replace bar Will not replace bar
codescodes– Must co-exist Must co-exist – CostsCosts
TagsTags
ReadersReaders
– ReliabilityReliabilityTagsTags
ReadersReaders
TechnologyTechnologyData impactData impact– Supplier & Supplier &
customer customer synchronizationsynchronization
How to gain value?How to gain value?– Item level, 20 Item level, 20
billion billion
Business process Business process impactimpact– Do we know the Do we know the
cost or the value?cost or the value?
Value PropositionValue PropositionTactical versus Tactical versus strategicstrategic– Short term Short term
response, high costresponse, high cost– Long term Long term
response, lower response, lower costscosts
Cost absorptionCost absorption– This cycleThis cycle
Value PropositionValue PropositionNext cycleNext cycle– Competitor & Competitor &
supplier responsesupplier response
Future RFID costs Future RFID costs will declinewill decline– Economies of scaleEconomies of scale– The experience The experience
curvecurve– Implementation and Implementation and
process process improvementsimprovements
Value PropositionValue PropositionValue chainValue chain– Internal analysisInternal analysis– External supportExternal support
How to attain an How to attain an internal ROI from internal ROI from RFID?RFID?
An integral part of An integral part of corporate strategycorporate strategy
SupportActivities
Primary Activities
Technological DevelopmentTechnological Development
Human Resource ManagementHuman Resource Management
Firm InfrastructureFirm Infrastructure
ProcurementProcurement
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MARGIN
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Value Proposition Value Chain Analysis
Identifying Resources and Capabilities That Can Add Value
TransitionTransitionCustomer demandCustomer demand
RFID maturityRFID maturity
Dual purpose Dual purpose technologytechnology
System flexibilitySystem flexibility
Strategic valueStrategic value– Who will be the Who will be the
winners?winners?
How long?How long?
Thank YouThank You
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