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CVS: RFID May Cure One Headache

The drugstore chain has joined the Auto-ID Center in the hope that RFID can ensure products haven't reached their expiration date.
Jun 25, 2002June 25, 2002 -- CVS Corp. operates more than 4,000 drugstores in the United States. One of the company's biggest headaches is making sure every bottle of aspirin, every tube of toothpaste and every box of antihistamine capsules hasn't passed it's recommended sell-by date.

The company, which had sales of $22.2 billion last year, hopes that RFID may cure it of this headache, and it believes the Auto-ID Center may have the right prescription. CVS has become the sixth major retailer to join the MIT-led effort.

"The Auto-ID Center is involved in cutting edge research that could benefit the entire retail industry, not just CVS, and will most likely be the wave of the future in many different applications," says Todd Andrews, spokesperson for CVS. "For those reasons, and because of its affiliation with MIT, we decided it would be a great idea to be part of the group."

Andrews says that RFID offers the potential for "breakthrough" efficiencies, particularly when it comes to making sure merchandise hasn't passed its expiration date. Right now, the company has to pull each item of each SKU off the shelf to view the sell-by stamp and make sure it hasn't passed its date of recommended purchase date.

"It is very time consuming," says Andrews. "You are talking about tens of thousands of items. This technology offers a store manger the possibility of vastly improving that process, where it is done in a matter of seconds, rather than let's say an hour to go down one shelf."

The company is also looking at broader supply chain efficiencies. One issue is the size of shipments. Pallets of goods may be sent to a Wal-Mart or Sam's Club. But CVS stores typically deal in smaller shipments, which are harder to track using bar codes.

Andrews says the company is hoping to get a "ground-floor understanding of any technology breakthrough that will help us increase efficiencies and better serve our customers."
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