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Business Strategy and the RFID Challenge

Business Strategy and the RFID Challenge. Dr. John Hamilton Consortium for Supply Chain Management Studies Saint Louis University October 20, 2004. Key Discussion Points. Strategy Technology Value proposition Transition. Strategy. Forward looking 3 to 5 years Environmental impact

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Business Strategy and the RFID Challenge

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  1. Business Strategy and the RFID Challenge Dr. John Hamilton Consortium for Supply Chain Management Studies Saint Louis University October 20, 2004

  2. Key Discussion Points • Strategy • Technology • Value proposition • Transition

  3. Strategy • Forward looking • 3 to 5 years • Environmental impact • WalMart & DOD RFID requirement • Provides direction and communicates to stakeholders • When effective --- competitive advantage

  4. Why Strategy? • Customer demand • Competitiveness • Cost impact • Seize opportunities

  5. Why Strategy? • Communication to executive management • A way to measure progress • A plan for the future • Minimize the total costs of RFID

  6. Technology • Current RFID issues • Will not replace bar codes • Must co-exist • Costs • Tags • Readers • Reliability • Tags • Readers

  7. Technology • Data impact • Supplier & customer synchronization • How to gain value? • Item level, 20 billion • Business process impact • Do we know the cost or the value?

  8. Value Proposition • Tactical versus strategic • Short term response, high cost • Long term response, lower costs • Cost absorption • This cycle

  9. Value Proposition • Next cycle • Competitor & supplier response • Future RFID costs will decline • Economies of scale • The experience curve • Implementation and process improvements

  10. Value Proposition • Value chain • Internal analysis • External support • How to attain an internal ROI from RFID? • An integral part of corporate strategy

  11. Value Proposition Value Chain Analysis Identifying Resources and Capabilities That Can Add Value Firm Infrastructure Human Resource Management Support Activities MARGIN Technological Development Procurement Service Marketing & Sales Inbound Logistics Outbound Logistics MARGIN Operations Primary Activities

  12. Transition • Customer demand • RFID maturity • Dual purpose technology • System flexibility • Strategic value • Who will be the winners? • How long?

  13. Thank You Success with partners

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