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AMR: $250m Spent by Suppliers on Wal-Mart RFID Mandate

In 2004, most suppliers under tight schedules to meet retailer deadlines did not end up deploying RFID technology in a way that meaningfully transforms their supply chains.
Dec 16, 2004This article was originally published by RFID Update.

December 16, 2004—According to a recent report from AMR Research of Boston, Massachusetts, an aggregate total of $250 million was spent on RFID by Wal-Mart suppliers in pursuit of the retailer's mandate compliance. Is that a large sum, given the scope of the RFID initiative? Not really. It represents an average of $1 to $3 million per supplier, far less than the $13 to $23 million AMR predicted. Why the shortfall? Most suppliers under tight schedules to meet the January 1, 2005, deadline did not end up deploying RFID in a way that meaningfully transformed their supply chains and business processes. A lack of demonstrable return-on-investment from costly RFID deployments meant that many suppliers implemented only the bare minimum to comply with mandates. Many implementations ended up as islands unto themselves, only negligibly integrated with the greater enterprise.

But as negative as this look-back sounds, 2004 was actually extraordinarily productive. The knowledge and experience gained from these forays into radio frequency identification, while impossible to quantify, will prove hugely valuable as companies surely increase their dependence on RFID to improve supply chain management and related business processes.

Read the article at AMR Research
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