Wal-Mart, Suppliers Affirm RFID Benefits

With RFID data, Campbell knows, for the first time, what's happening within individual stores. The firm can tell if a store has not put a display out on time, or if sales in the first few days of a promotion are exceeding expectations. This ability enables it to react, either by working with Wal-Mart to get the display out, or by replenishing stock more quickly.

"Promotions can last for a couple of weeks or even a month, so if you see the product is not out on the floor when it's supposed to be there, you have the opportunity to take action and still affect the sale of that item," she says. "The stores not putting it out on time have maybe a 25 percent lower sell-through, so there is a lot of incentive to get this right."

Wright disagreed with commentators suggesting suppliers are opposed to the use of RFID and are only doing it because Wal-Mart requires it. "Despite what has been said, they don't want any company to do something that doesn't make economic sense for that company," she says. "They are not pushing for anything unreasonable. They have been very collaborative; they share their learnings. This is something we are doing together, and I feel it's strengthened our relationship because we are working so closely to get this right."

Tim Smucker, chairman and co-CEO of The J.M. Smucker Co., agrees. "EPC RFID has opened a dialogue between trading partners," he says. "Some of it is positive and some [of the discussion] is focused on where improvements need to be made—and that's great. We are always eager to work with our supply chain partners to improve execution."

By using data supplied by Wal-Mart and other supply chain partners, the company can tell where its products are in the supply chain. "That will provide efficiencies when you are receiving the product at a distribution center, picking it and shipping it to the retailer, and finally it reduces out-of-stocks at retail, so the product is there when the consumer wants to buy it."

According to Smucker, although his company has reaped long-term benefits from being able to see the location of products in the supply chain, it is taking a long-term view of EPC RFID. "We were one of the first companies that supported the bar code way back when," he says. "It took 10 years, really, to have that implemented throughout the U.S. and then the world, but it has enabled trade around the world. This is another step in that evolution of the supply chain. It's about visibility."

The prospect of better serving customers, however, is what excites Smucker the most. "Everything we do is focused on benefiting the consumer," he says. "If the consumer benefits, then we benefit and Wal-Mart and our other customers benefit. No question about it."