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Companies Believe in RFID Benefits, Not Hype

At RFID Journal LIVE! this week, attendees received an update on Wal-Mart’s RFID deployment and tried to match their needs with the state of the technology.
By Mary Catherine O'Connor
May 04, 2006In her keynote address yesterday, Carolyn Walton, Wal-Mart's vice president of information systems, kicked off the final day of the fourth annual RFID Journal LIVE! conference with a message echoed by many end users at the show: To make RFID work, you must take risks. "Stick your neck out," she urged.

At the same time, Walton also encouraged attendees to start small, complying with any retailer tagging requests they might face, but also learning about RFID and what it can do for their companies. "You can't leap-frog into [RFID] and launch a full deployment," she said.

Wal-Mart's Carolyn Walton
Of the RFID end users in attendance, the largest share was made up of representatives from consumer packaged goods companies. And while most of this group is looking to deploy RFID to comply with requests from Wal-Mart, Target, Albertsons, Best Buy and other retailers, a good number are keen to discover ways their internal operations can benefit from the technology.

"We're here to solidify which vendors we will be working with," said Dennis Upton, chief information officer for Brother International Corp., a manufacturer of copiers, sewing machines and other consumer goods. The company faces a mandate to begin tagging some shipments headed for Wal-Mart next year. "It's going to cost us to use RFID, so if we can get some benefit out of it—other than keeping Wal-Mart as a customer—we'll do it."

Walton provided updates on Wal-Mart's RFID program execution, saying five distribution centers, 475 Wal-Mart stores and 36 Sam's Club locations are now RFID-enabled and receiving a combined total of 3,000,000 tagged cases each week.

Walton also discussed the internal benefits some of its suppliers have leveraged using feedback from Wal-Mart regarding the locations and times at which the retailer reads case tags. Through this feedback, she said, Hanna's Candle Co. discovered that a full truckload of its candle products had been received into the yard of a Wal-Mart DC, but was left there, unloaded. This discovery helped Hanna's and Wal-Mart avoid missing sales on the seasonal products still sitting in the truck.

Wal-Mart's goals for the upcoming year include providing its sales associates with handheld interrogators (readers) that will seek specific EPCs in backroom inventory, alerting them to the tag's presence as the associate waves the reader past shelves of cased product. Walton also noted the significant reductions in out-of-stock instances attributed to the use of RFID, discovered through a research project launched by the University of Arkansas (see RFID's Impact at Wal-Mart Greater Than Expected).

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