Students at Indiana University's Kelley School of Business will soon be lugging radio-frequency technology books in their backpacks along with the usual accounting and marketing texts. Thanks to a $150,000 grant from Procter & Gamble, the school will expand its graduate and undergraduate curricula this fall to address RFID technology and its role in business.
"Today's global business environments are characterized by unprecedented competitive pressures and sophisticated customers who demand innovative and speedy solutions," says Dan Smith, interim dean of the Kelley School. "With changes in RFID technologies, businesses are abuzz with its potential, and it's vital that our graduates leave our program ready to play a leading role at corporations ...."
What undoubtedly helped the Kelley School land the grant (it's one of only three P&G grant recipients in the country) was the faculty's demonstrated interest in RFID. Last spring, faculty members built the first working RFID model at a U.S. business school, primarily for students in its MBA Supply Chain Management Academy. That model includes several different types of systems, which involve antennas, electronic product code (EPC) tags and reading devices that are hooked to computers that store the information. Students can experiment with the system in different ways; they can study, for example, how a transportation system gets products from one DC to another and, ultimately, into consumers' shopping carts.
Some of the grant monies will be used to expand the RFID lab into a full-fledged technology center to enable the study of advanced supply chains and retail operations. Other funds will be used for course development at both the undergraduate and graduate levels. Ash Soni, chair of the Department of Operations and Decision Technologies, says the school's undergraduates will learn about operational aspects of the technology and its infrastructure. MBA students will focus on how it can be used for strategic purposes. Down the road, faculty for the school's MBA program plan to develop a multidisciplinary series of cases about RFID and related technology.
"This technology is going to impact business in lots of different ways, so it makes sense for us to do it at both the undergraduate and graduate levels," says Soni. "All indications are that RFID technologies will have revolutionary applications not only in supply chain management, but also in operations and management well beyond the obvious benefits we can identify today."
All the buzz notwithstanding, it appears that many 3PLs remain unconvinced that RFID will be the next big thing. In a recent survey of third-party logistics service providers, only 36 percent said RFID would have a major impact on their industry, 57 percent expected it to have some impact and 8 percent of 3PLs said that RFID would have no impact.
Though 3PL providers conceded that installing RFID equipment could help them gain new customers or retain existing customers, only 16 percent said they believed the main benefit would be more efficient operations. "From a cost standpoint versus benefits realized, the business case still seems to be unclear on some product lines," says Bruce Edwards, chief executive, Americas, at 3PL provider Exel. Edwards notes that the pharmaceutical sector and companies with high-value products have the most to gain. "But I don't think RFID has the right cost profile for the normal products that most consumer goods manufacturers are flowing through their DCs."
Still, their skepticism isn't keeping the 3PLs from moving forward. The survey, part of IWLA's 2005 Business Outlook, found that 41 percent of respondents expect to increase their technology budgets this year in order to pursue RFID projects. Of that group, 7 percent expect to increase funding for RFID projects by 10 percent or more.