Return on Investment
The return on investment with RFID is fairly easy to visualize. The system will initially cost anywhere from $10 to $15 million including readers, software, and implementation. Annual cost will likely start at $20–40 million depending on inventory size but will probably drop to $8–20 million annually as tag costs decline.
On the flip side, benefits from inventory control could be in the $20–55 million range each year for a large manufacturer. This relies on reasonable estimates of inventory lost, stolen, or overstocked, and excludes the possibility that RFID implementation could eliminate wide-scale theft, prevent inventory spoilage, or help to avoid a lawsuit or regulatory headache, events which might drive savings far beyond estimates.
There are several major vendors in RFID technologies including well-known names such as Microsoft, Cisco, and Texas Instruments. However, the demand would seem to presage more competition, and further cost reductions are expected as competition in the market increases and as demand makes economies of scale possible.