A VC in Vacationland

For those of us who read the RFID publicity on a daily basis, there is one recurring theme–RFID implementation is proceeding in baby steps towards becoming a pervasive technology to allow anyone to track anything anywhere in the world at any time. But you would think from reading the PR blurbs that widespread RFID adoptions is about to happen tomorrow.

The recent announcement that Honda would begin using RFID to track reusable container movements between suppliers and one of it’s UK plants is a good example.  If you just read the headline "Honda the latest car manufacturer to adopt RFID", you would think that Honda had adopted a widespread program for using RFID.  Instead we find that they are using RFID for asset tracking 350,000 containers and potentially saving $8 million per year.  Unfortunately, that $8 million in savings includes a lot of lean manufacturing process savings, so the true RFID benefit is not apparent.

Lest I be labeled an RFID curmudgeon, which I am not, let me make clear that my issue is with the PR spin and not with the technology application.  It is great that Honda is beginning to use RFID for asset tracking, one of the best early uses of this technology.  What is not good for RFID is the over hyping of the wins.  Why not just say Honda has adopted RFID for asset tracking with suppliers at one of it’s UK plants?  I am not sure that Honda has an overall RFID plan.  I am actually pretty sure they and most other companies do not as yet.

RFID is increasingly getting bad press because the vendors have been over promising and under delivering on the benefits.  If you do not believe me, ask any consultant who has tried to establish a practice in this space. Few widespread RFID program adoptions are underway.  Most are specific solutions focused on applications where hard benefits can be realized without significant costs.

I personally am betting big on the RFID space as a great source of real time data to help better manage supply chains, via investments in companies such as TrueDemand.  However, very, very few pervasive or clean RFID data sets are available to supply chain analysts for forecasting or other planning activities at present.

Why don’t we all take a deep breath and adopt a realistic view of this technology?  One reason is that there is a lot of venture money behind the hundreds of RFID chip, sensor, middleware, applications, etc. etc. startups and the venture guys expect to get nice payoffs in the next few years. On one hand, you cannot blame the RFID companies trying to accelerate the marketplace.  On the other hand, why over hype the technology to the point where fewer and fewer potential users believe the benefits story?

I guess I’ll stop ranting on this for the moment.  Meanwhile, I hope the PR specialists in RFID realize that truth sells a lot better than fiction in the real world.