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RFID and dilemma of disruption

Filed in archive Point of view by ehsan on January 06, 2007

It's really hard to be VP Supply Chain of Walmart, isn't it? I was thinking the other day about the type of the decisions these people make, for example on RFID.

For sure RFID is a disruptive technology and it will finally surpass other existing alternatives; that's why Walmart is pushing its suppliers to equip themselves with RFID technology. If companies like Walmart success in pursuing this strategy, they will cause a wave of change in many industries. On the other hand, this is like a double-edged sword because imagine...

A world that everybody uses RFID and there exist an efficient relationship between all suppliers and retailers. In such a world, RFID is a standard thing and so the competitive advantage of Walmart will go away. So the key question is what to do, to invest or not to invest?

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Tags: walmart supply chain disruptive technology dilemma rfid supply+chain

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Response from: no image Dave (Check me out!)

The implementation of RFID by WalMart and other retailers is not for competitive advantage but to lower the overall costs to consumers. Sure, in the short term there will be some advantage using RFID due to lower cost supply chain, but ultimately the playing field will level out. The 'true' competitive advantage will come from the more efficient use of RFID, which WalMart is capable of achieving like they have with IT systems and logistics. In a level playing field, the more efficient company always wins.

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RFID and dilemma of disruption

Filed in archive Point of view by ehsan on January 06, 2007

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