Déjà Vu All Over Again

By Mark Roberti

Sept. 8, 2008—Three times last week, I heard from suppliers who said they're not taking steps to comply with Sam's Club's requirement to apply RFID tags carrying Electronic Product Codes (EPCs) on sellable units (see Sam's Club Tells Suppliers to Tag or Pay). These companies said they simply don't believe the retailerer will go through with the deployment.

Two systems integrators I spoke with also told me that while they'd completed preliminary work with Sam's Club suppliers, the work had been shut down because "it appears Sam's Club is backing off its requirements." If this sounds familiar, it's only because it is—the same thing happened when Wal-Mart initially rolled out its RFID plans. At that time, some suppliers swore up and down that the retailer would back off its tagging requirements.


Wal-Mart did make some adjustments to its rollout plan—for instance, it focused more on stores than on distribution centers, because early work determined there were more benefits to be had at the store level. But here we are, three years later, and Wal-Mart has not pulled RFID out of its stores. Instead, the retailer continues to explore the benefits and employ the technology where it's delivering the most value.

Those who dragged their feet were forced to implement slap-and-ship tagging systems, which deliver no benefits back to them. Other companies, such as Beaver Street Fisheries, Kimberly-Clark, Procter & Gamble and World Kitchen, took an approach that either minimized additional labor costs, or delivered benefits by allowing them to utilize the data to improve sales and cut costs.

I know the folks at Sam's Club are currently refining their rollout plan. These are smart folks, and they'll continually examine where the benefits lie, where the technology delivers the most value and what suppliers are capable of achieving, then adjust their plans and implementation strategy accordingly. That's just good business practice.