RFID Lowdown: Wal-Mart Moving Ahead Agressively With RFID

September 15, 2006

Wal-Mart Moving Ahead Agressively With RFID

Giant retailer Wal-Mart has been running one of the largest conversions to RFID in the world. In fact, with exception of a Chinese railway ticketing project, Wal-Mart is essentially single-handedly driving a huge part of the RFID industry with their mandate. Part of that mandate is to ensure that each and every one of their suppliers use radio frequency technology in their supply chain as well.

Success levels to date have been reportedly varied, with some suppliers cooperating and others quite reluctant, having to be nudged by Wal-Mart's powerful hand. While Wal-Mart has been touting the benefits of RFID technology, at least for them, the biggest hurdle for the project appears to be those suppliers who feel that the ROI (Return on Investment) for them is not worth the efffort. Well Wal-Mart just upped the ante by announcing that they plan to convert another 500 of their stores (including Sam's Club) to RFID use, effectively doubling the number after the effort. Part of the new push includes adding another 300 suppliers to their list of those that are RFID-compliant. That would double the number to over 600 by Jan 2007.

The bulk of the EPC-based RFID tags in use will be pallet- and case-level, which are generally far less expensive than item-level tags. Benefits of their use, to Wal-Mart, includes reducing the number of out-of-stock items in-store, as well as reducing overstocked items. Benefits of use to suppliers? The cynical view: staying in business. The positive, or at least compliant view: the ability to refine production to generate optimum quantities

As I understand it, there won't be any dragging of suppliers kicking and screaming. Those who do not participate simply will cease to be suppliers to Wal-Mart.

Sources: [Line56, Food Business Review, Progressive Grocer, Food Production Daily Europe]

--
Did you enjoy this post?

September 15, 2006 | Permalink