Making Your Case

Testing the business case for an RFID project is the first consideration for a CIO. Sometimes, RFID is the wrong solution. For example, Dow uses bar codes and handheld readers to track the large metal containers used to transport chemicals. RFID tags cost more, so Dow would want to reuse them to minimize the overall price. But it's hard to find RFID tags that can survive the sandblast cleaning the containers go through as their chemical contents are replaced, Asiala notes, so applying a bar code is simpler and cheaper.

In other cases, using RFID does make sense for Dow. The company is testing active tags placed over the fastener that holds each shipping container closed; the tags connect to an internal sensor and clock. The combination lets Dow track environmental conditions such as temperature or moisture, so a log is stored on the tag - essentially, a shipment e-pedigree. That log can be checked as the container passes through various points on its journey, giving early alerts to possible problems, Asiala says.

The same tag is also used in a more traditional inventory management application: to locate and redirect a container in transit, for instance, when a customer cancels an order but a different customer wants the materials. When the container enters a port, the shipping firms can find the affected container and move it to a new ship destined for the new customer, rather than ship it back to its origin first, as had been standard practice, Asiala says.

Most experimentation today in using RFID beyond inventory management is happening in the medical industry, notes Michael Liard, a research director at ABI Research. Like Dow's Kepler, hospital CIOs have discovered that RFID can sometimes be a useful tactical weapon to support a larger strategic need.

Reducing medication errors is a common goal at hospitals. That's why the Friedrich Schiller University Hospital in Jena, Germany, is testing the use of RFID tags on patients' ID bracelets, nurses' ID badges, and drugs and drug containers. Before a nurse administers a drug, she scans herself, the patient and the drug. A software system checks the patient and drug IDs against the pharmacy instructions to make sure there are no medication errors. The drug type and amount, as well as the time of delivery and the ID of the nurse who administered it, are all logged, so the hospital can quickly analyze medication history in case of a problem, says vice CIO Martin Specht.