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What the Sam's Club Announcement Means
Wal-Mart is also taking a collaborative approach. It has launched a trial in which a group of suppliers tag every case in several product categories with the aim of quantifying the benefits of tagging to Wal-Mart and those suppliers. Wal-Mart believes that if the suppliers are convinced tagging all cases will deliver benefits for them, they will be more willing to tag additional goods shipped to Wal-Mart. Simon Langford, Wal-Mart's director of EPC and RFID technologies, told me that tagging all products in additional categories will begin by the end of this month, and that the results will be gathered and analyzed in April.
My biggest concern regarding the news that Sam's is offering suppliers additional time to tag sellable units is that the suppliers likely will fail to use the time wisely. Very few responded to Sam's Club's January 2008 letter stipulating an Oct. 31, 2009, deadline by investigating how to tag sellable units, so it's possible suppliers will wait until six months before the new deadline to begin doing anything.
However, I believe that would be a mistake. To reduce labor costs associated with tagging sellable units and achieve any benefits, suppliers need to integrate tagging with their operations, link tagging systems with their back-end systems and develop applications that utilize the EPC RFID data Sam's Club provides back. It's a big job, and Sam's CEO, Doug McMillon, acknowledged in the letter that it's a project that will require 12 to 18 months to complete. So Sam's Club isn't backing off—it's wisely giving suppliers more time so they can comply with the tagging requirement in a way that will allow them to achieve benefits.
My guess is that Sam's Club is considering an early 2011 timeframe for implementing EPC RFID-enabled checkout. If I were a supplier, I'd begin working toward that goal now, giving my company time to phase in high-volume tagging, rather than waiting until the last-minute when there is no margin for error.
So will suppliers begin moving forward? I think many will take this deadline seriously, for two important reasons: One, Sam's Club is giving them a reasonable amount of time to comply, and will provide information that shows it has studied the data and quantified the benefits; and two, if some suppliers don't comply, Sam's will have good reason to drop them.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog or click here.
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My biggest concern regarding the news that Sam's is offering suppliers additional time to tag sellable units is that the suppliers likely will fail to use the time wisely. Very few responded to Sam's Club's January 2008 letter stipulating an Oct. 31, 2009, deadline by investigating how to tag sellable units, so it's possible suppliers will wait until six months before the new deadline to begin doing anything.
However, I believe that would be a mistake. To reduce labor costs associated with tagging sellable units and achieve any benefits, suppliers need to integrate tagging with their operations, link tagging systems with their back-end systems and develop applications that utilize the EPC RFID data Sam's Club provides back. It's a big job, and Sam's CEO, Doug McMillon, acknowledged in the letter that it's a project that will require 12 to 18 months to complete. So Sam's Club isn't backing off—it's wisely giving suppliers more time so they can comply with the tagging requirement in a way that will allow them to achieve benefits.
My guess is that Sam's Club is considering an early 2011 timeframe for implementing EPC RFID-enabled checkout. If I were a supplier, I'd begin working toward that goal now, giving my company time to phase in high-volume tagging, rather than waiting until the last-minute when there is no margin for error.
So will suppliers begin moving forward? I think many will take this deadline seriously, for two important reasons: One, Sam's Club is giving them a reasonable amount of time to comply, and will provide information that shows it has studied the data and quantified the benefits; and two, if some suppliers don't comply, Sam's will have good reason to drop them.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog or click here.
