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Déjà Vu All Over Again

As they did with Wal-Mart, many suppliers are assuming Sam's Club will back off its EPC tagging requirements.
By Mark Roberti
And many of the products sent to Sam's Club are easier to tag than those sent to Wal-Mart. That's because bulk packaging usually provides more space to place a tag, and more air gaps that make that tag easier to read. This means Sam's suppliers will spend less time dealing with the physics of RFID, trying to ensure the tag can be read.

The biggest challenge Sam's Club suppliers face involves tagging high volumes of products. You can't take a manual approach to that, because the labor costs are just too high. And if you sell many SKUs, the complexity of tagging all of them becomes too much to manage manually. But automating the tagging as part of a high-volume production operation has its own challenges.

If Sam's Club does provide additional time for suppliers to begin tagging sellable units, companies would be wise to use that time to devise a smart strategy for tagging in the most cost-effective way. The editors of RFID Journal have been working on a guide to doing just that. We'll lay out the options and show suppliers what they need to do, but doing it will still take time (and, yes, money).

I don't believe Sam's Club launched its EPC strategy on a whim. The retailer knows there are significant benefits to tagging sellable units, and I wouldn't bet against 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.

USER COMMENTS

William James 2008-09-12 10:47:41 AM
Sam's Club Initiative Mark, Very good analysis of the Sam's Club initiative. I'd on suggest that one of the incentives to help the suppliers really push hard to item level tagging is the payback they will get by gaining visibility to their product moving through the Sam's Club supply chain. By actually seeing what products are coming out of the store or off the shelf and displays they will have a much more accurate count on their inventory positions they need to maintain upstream. The problem they are all chasing is the out of stocks which they solve by moving product into the DC's so it's readily available for shipment into Sam's. This stuffing of the supply chain is costing them millions in inventory capital. Additionally, having visibility to the item level data helps them to better fine tune their promotions and category management. This is especially important when a supplier runs a promotion with Sam's, the execution is critical to the success of the promotion and today they have no real "in-store" data to tell them if they met their marks. By having access to the item level data that hopefully will be shared back with them they can better tune their supply chains which will save millions on fuel and transportation, packaging, shipping, and other sustainability goals they are trying to meet. Sam's should help the suppliers by giving them access to the data at the item level so they can feed it back into their production planning systems. At that point they will start to realize the ROI's they so rightly long for. Bill James VP Business Development Seeonic Inc. www.seeonic.com

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