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The Hackett Group has found that one way companies are narrowing the gap between demand for IT services and IT budgets is to cut back on discretionary IT spending, which include RFID technology. However, rather than meeting expectations that it would repair breaks in supply chains, RFID is proving more successful in relatively small-scale, closed-loop places like hospitals.

Two of RFID's highest-profile supporters, Walmart and the Department of Defense, have made scant progress in implementing RFID according to Bob Novack, an associate professor of supply chain management for Penn State. Where Walmart has experienced some success with RFID is in back rooms of stores, as opposed to in distribution centers where computers, trucks and metal shelving can wreak havoc with read rates.

According to Novack, before RFID can be broadly deployed in supply chains, costs will need to drop to less than a penny per tag. The technology also will have to overcome cultural barriers as suppliers and their customers must collaborate more closely than ever before.

Read the full story at itbusinessedge.com.

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