Oct. 15, 2008 – We asked Toby Rush, President and CEO of Rush Tracking Systems, the secrets of thriving in the RFID business. His answers show that selling cost savings can be big business. (Ed. note: what would you rather sell in this economy than the ability to reduce spending?)

From the outside, Rush Tracking appears to be growing strong and steadily. What do you see as the element of success in selling and implementing RFID for clients?

RUSH: We have seen a lot of growth in the industry. We have been doubling year over year. We have been profitable in 2006. We have been profitable in 2007; we are going to be profitable in 2008. A lot of that is because a standardization of Gen 2 technology.

As you have got a base set of use cases that we have been deploying. You get more and more sophisticated tag sensitivities; better and better tags; better readers; and more sophisticated advanced readers that are coming onto the market. We are able to scale those use cases across the enterprise, but still have a lot of extra things that we can do, so the ROI just going off the charts.

It sounds like you are saying that the improved Gen 2 is a bit of a fulcrum of your company's growth.

RUSH: Maybe better to clarify it. First we do have a lot of upfront defining of and identifying, quantifying, articulating the business value.

So when you can do that, and then support these business process changes in the standards-based technology, then people aren’t asking 'does the technology work,' they are asking 'what applications do we got tackle with this technology.' So with a stable platform, we are able to overcome the technical questions much faster and focus on the business.

Like me, you have probably met people – less of them recently – but even today who are singing the blues about their RFID business. What do you think they are missing?

RUSH: There are a four core competencies that you need to really effectively deploy RFID. Business process, software, hardware and physics. Unless you can handle all four of those and get them thoroughly correct, you are going to be missing a leg of this.

What we have done is build a team focused around business process, business value, encapsulating work flow into the hardware and physics. When you get those four together, you are really able to scale well.

When you are talking to clients, I am guessing you talk about the value you are bringing them. How do you approach a meeting or a discussion like that?

RUSH: We start with a really open question. "If you had visibility to the products and processes of your enterprise, what would you do different?"

As they begin to wrestle with that question, we have a structured methodology called visibility assessment. We walk through at the enterprise level, a facility level and an operator level; process technical and financial feasibility; and work through each one of those iterations – enterprise, facility and operations of the user level – and you really gleam what is the true value. Then we can match the technology to those business factors.

Now the nature of a question like the one you just mentioned is that it sounds open ended. If they have never seen that business value in their system prior, do you find they can have the answers; or do you have to guide them a little bit towards the answers?

RUSH: The question isn’t how do you use RFID. Because people get this blank-page syndrome; they don’t know where to start. So people have done what is called "value stream." It is a very common in supply chain. As a manufacturing operation consulting tool, we say "where do you add value to products along the way?" That is where you get paid.

So we will do a traditional value stream map and highlight how material flow, material movement, plays a part in that. And how we can make that far more efficient.

What are the job titles of the internal champion, that make your proposal become an actual sale and implementation.

RUSH: It is VP manufacturing, it is VP or directors of supply chain, operations, logistics; it is the business guys. You have got to have IT involved. You have got to have their advanced technology guys, enterprise IT folks. However, it is the business guys who get you to define the business.

Do you see a difference in the way buyers talk to you today, versus talking to you a year or two ago?

RUSH: Absolutely. There are a lot less questions about what RFID is and how does it work and a lot more questions of how do I use it. So people are not questioning if RFID works, it is how do you use it most effectively.

Do you ever find a situation where you walk in and say, "You guys really have everything great here. There is nothing we can do to help you"?

RUSH: That has happened a number of times. It is where, I think, continuous process flow organizations are already automated. They already have automated conveyance systems.

The flipside of that question might be are there situations where you walk into a manufacturer, or some other company, and said, "If you spend X, you could save 3X a year," where they listen, and they get it, and they say, "Nah, that is not for me"?

RUSH: There are definitely those that doubt. So when we build a business case we try to do it with their team, so we don’t have to prove it to them. Their own internal team is pushing it.

If there is not a pain, you are not going to have interest. Part of our job is to help make latent pains or hidden pains – this thing that you just assumed is the way you do business – better. To show there is a different way to do it, that makes your supervisor’s life, plant managers and operators' lives a lot easier and here is how to do it.