Here’s a great article on a new technology. It seems like a Blackberry may be an expensive way to manage your RFID data, unless you already need one. This may be a good gadget for an RFID enthusiast or developer, though.
http://morerfid.com/details.php?subdetail=Report&action=details&report_id=5218&display=RFID?
Karen Radde, an RFID professional with RFIDSupplyChain.com, wrote once on her Blue Bean blog that customers are always wanting to know “How far will it read?” Perhaps tag/reader manufacturers should begin reporting something akin to confidence intervals. Whereas, a given RFID technology should yield results at a given level under certain circumstances, by changing variables x, y and z, users can expect a new performance based on some calculated probability. Get your calculators out…
There is an excellent article in October’s Harvard Business Review about Chinese and Russian entrepeneurial networks. I have not written about the BRIC economies in some time, but given my recent involvement in LinkedIn, this article was particuarly intriguing.
Chinese networks are generally classified by:
- smaller size due to institutional stability and constrained migration
- higher density due to preference for familiar contacts
- higher trust due to institutional developmenet and comfor with third parties
By contrast, Russian networks are characterized by:
- larger size due to weak institutions and high mobility
- lower density due to comfort with loose social ties
- lower trust due to de-institutionalization and suspicion of third-parties
In 1954, Joel Dean wrote Measuring the Productivity of Capital for the Harvard Business Review. Some of his remarks were quite prescient and may still be relevant to capital budgeting processes at present. Speaking about the relationship between corporate strategy and capital budgeting decisions, Dean suggests that while a “company’s goal is profits,” a bit of latitude can be taken to include other worthy organizational pursuits—ostensibly those espoused in an organization’s overall strategy. This seems a far cry from today’s corporate culture that puts profits above all else. With corporations ultimately responsible to their share owners for maximizing share owner equity, many firms may forgo capital investments which would support their corporate strategy and perhaps maximize a much longer-term profitability in lieu of shorter-term profit gains.
RFID implementation may certainly fit into this lateral component of capital budgeting. While short-term IRR and NPV may not appear to justify enterprise-wide implementation, a longer-term ancillary-benefit assesment may lead to a different conclusion. This is particulary true in light of the difficulty capturing accurate costs and cash flows with technology that is designed to reduce direct labor costs. That being said, Dean cautions quite aptly: “some projects are [considered] so pivotal for the long-run welfare of the enterprise that they possess high strategic value which overrides mere economic considerations and lifts their evaluation into a mystic realm beyond the ken of economic and financial analysis.”
Throughout the capital budgeting process, I would suggest taking a bit of latitude—certainly within perspective of the current business climate—and considering those projects which may yield long-term fruition of organizational objectives.
I have been reading a lot lately about inventory managment. In general, inventory stocking systems can be divided into four categories: memory, fixed, zone and random stock systems. Each system has its place in the inventory managment world, and one in particular could benefit significantly from RFID implementation.
A fixed stock system assigns a location to each stock-keeping unit (SKU) within a warehouse. When a new widgit comes into inventory, it goes with all other widgits which share its SKU. This stocking systems provides the most systematic layout for inventory, and it assures a well-organized warehouse. However, it also dictates that each stock location must have capacity for the maximum quantity of inventory of that unit at any given time. Invariably, this results in having a warehouse which is much larger than is necessary. Memory stock systems rely on the memory of a small group of stocking employees. The employees put stock where it will fit and rely on their memory for picking at a later time. Obviously, this provides for an efficient space utilization, but has weakness tantamount to the reliability, availability and sometimes attitude of the employees. In a zone system, items are grouped together by type or size and can be thought of as a cross between the fixed stock and random stock (which I will return to) approaches. Zone stocking has its place, but it can lead to honeycombing—a type of inefficient space utilization—and other problems.
Lastly, there is the random stock system. A random stock system is similar to the memory stock system with one key difference. Unlike the memory stock system, where employees use their memory to locate stock position, a random stock system uses a detailed, accurate and up-to-date database system to catalog each item along with positioning information. Records management within a random stock system is paramount, as the accuracy of positioning information must be accurate to ensure efficient stock picking. What was once done by transaction—using something like a stock movement card—can now be automated real-time by implementing RFID. Rather than having employees make notes or scan barcodes during inventory movement—whether it be storing, re-locating or picking—RFID can be used to accurately read tags embedded on pallets, cases or items. Interrogators can be placed on material handling equipment, at common entry/exit points and throughout a facility to capture temporal and spatial positioning of a given item.
Stephen Covey talks about time management using a matrix. As you can see on the right, Quadrant 1 refers to items in our life that are both urgent and important; Quadrant 3, not important, but urgent; Quadrant 4, not important, and not urgent. With reference to RFID, I want to talk about Quadrant 2—items which are important, but not urgent.
Items which are important, but not urgent, represent those things in our lives—both personal and professional—which are not on the front burner. Despite the fact that they are not pressing—which do not warrant our immediate attention—but are important in the long-term none-the-less. The most common example would be planning. We all recognize the importance of planning. We realize that to reach our long-term objectives, we must first determine what they are. We must make a plan to acheive those objectives, and then, we must work toward them. They are not urgent in the sense that planning does not take precedence over those urgent items in our life which must be done right away. However they can not be ignored. Much like planning, many items can wait until tomorrow, but need to be done to achieve our long-term goals.
RFID is a prime example of a Quadrant 2 activity. Realistically, given other pressing matters like the day-to-day operation of a supply chain and the very real costs associated with implementation, RFID can wait until tomorrow. In fact, it can wait until next year. But, I will caution you; RFID implementation can not fall to the wayside in the chaos of our Quadrant 1 items. Supply chain managers must realize the long-term advantage—and necessity—of implementing RFID technology. It has been said over and again that “competitive advantage is temporary.” To be certain, RFID is rapidly becoming a competitive advantage for those organizations that can implement it effectively. As time goes on, organizations that postpone their RFID projects will quickly realize that they have missed their opportunity to gain a competitive advantage. And, if too much time passes, those asleep at the wheel will realize that what once could and would have been a strong competitive advantage has become a necessity. They will realize that they have not only missed an opportunity to move ahead of their competition by taking advantages of the cost-savings that RFID can provide, but they have slid behind their competition and that advantage has been taken by someone else. The time will come in which organizations who delayed RFID implementation for whatever reason, will be playing catch-up to merely maintain parity in the marketplace.
Put RFID alongside your Quadrant 2 activities. Realize that although it is not urgent, its consideration is extremely important. Do not wait until your competitors have passed you by, and you have missed the opportunity to gain a competitive advantage.
Moments after writing Do you trust me?, I came across an article in September, 2008’s physicsworld magazine. The lead-in begins…
“Scientists and those people with religious convictions may have sharply contrasting beliefs, says Robert P Crease, but does that forbid them from having stimulating conversation?”
It’s an interesting article that goes on…
…both groups have to trust something intangible: the scientific life and the religious life, respectively. For at the core, if sometimes not the surface, of science and religion is a kind of humility. For scientists, it is the awareness that we do not know enough about the natural world; we know only fragments, and not all that we can. For the religious — and especially for Christians, Jews and Muslims — the humility lies in the awareness that the way we humans ordinarily lead our lives is imperfect; that we are not all that we can be. The idea that the truly religious life is marked by humility and the awareness of one’s own ignorance is hardly controversial, and is the thesis of the New York University theologian James P Carse’s new book The Religious Case Against Belief.
And concludes…
Trust, then, is one issue about which both scientists and the religious have a backlog of experiences that might be mutually illuminating. It would be interesting to see what would happen if we got them talking, not about their beliefs, but about how they form and defend those beliefs. That would be a conversation worth overhearing.
I e-mailed Alex Todd with TrustEnablement.com and asked for his thoughts. Based on his research and theories, he had this to say…
That’s an interesting article. I agree with the thesis that trust underpins both science and religion. The fundamental difference is their preferred sources of trust. Humility is a risk transference mechanism that manifests itself as deference, which in my Trust Enablement(r) Framework serves to rebuild lost or deficient trust. It is the most efficient starting point for developing trust that, when it works, stimulates a virtuous spiral of mutual reciprocity, resulting in increasing levels of trust.
There is an interesting parable available from trustoptimizer.com. A Tale of Two CEOs compares two similar business models–one extremely succesful and on the rise, the other on its way out. Trust Enabling Stragegies, the research group behind this article, draws a distinction between these two business models and distills it down to a single fundamental quality: trust. Alex Todd, president of the group, states: “Trust is integral to every transaction and the foundation for business success. It drives the volume, velocity and value of every business transaction.”
I tend to agree. If you look at some of the world’s longest-running, most-profitable organizations, they each have a strong commitment to honesty and integrity. Businesses cannot succeed if their employees lack trust in their management, if their customers lack trust in the organization or if their investors lack trust in the business model.
From a supply chain standpoint, companies would do better to realize that their customers rely on the commitments that are made. If obligations are not met and commitments are routinely broken, the supply chain customers will not be able to make good on the commitments they have made to their own customers. If you take the partnership approach, if you believe that you as a supplychain provider are working in tandem with your customer toward the ultimate goal of serving their customer, you must realize that the commitments you make to your customer are as important as the commitments they make to theirs.
Andy Mulkerin writes about a new Transfer Logistics operation being setup in Chengdu, China. I seem to recall that UPS obtained an advantageous road license in late 2007. Hopefully the region will not be hit with more geological catastrophes.
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