Feasibility study

What is an RFID feasibility study?

When facing complex projects that impact the entire supply chain – from production to retail and even the outlets – it is good practice to precede any activity with a feasibility study.

Much like the design of a house, the feasibility study is the design of the RFID system in its entirety. It defines the perimeters of the supply chain, identifying products, establishing processes, parametrizing the features of the hardware and software interfaces and estimating the return on investment (ROI) for businesses.

The feasibility study can be divided into a series of stages that are essentially sequential in nature. Once the objectives have been defined (see paragraph 1) and the tag type and coding that will be adopted is decided (see paragraph 2), the core parts of the feasibility study can be carried out, consisting of the ‘as is’ analysis, the ‘to be’ design and the calculation of the return on investment

  • ‘As Is’ analysis: the ‘As Is’ processes subject to engineering are initially mapped out, starting from the first upstream process (usually the production of the garment at the façon), by means of shipment to the distribution centre. At the distribution centre the internal processes are investigated in detail (goods-in, storage, picking, sorting, packing, shipping) up to the point of sale. Here the analyzed processes are typically goods-in, replenishment from the backroom, inventory counts, checkout and returns. At this stage the critical points and/or the opportunities that the technology could provide are identified for each process in the supply chain.
  • ‘To be’ planning: Processes are then engineered from an RFID perspective, defining the technical specifications (such as which hardware is assigned to a given process), information specifications (data to be exchanged with the resident information system, data warehousing specifications) and management specifications (activity flow charts for processes and operators).
  • Economic assessment: The investment is assessed from a differential perspective with respect to the “As Is” situation, analysing the different items of capital and operating expenditure, these being the terminating and initiating costs connected with the project. This economic assessment touches all analysed processes impacted by RFID technology.