May 03, 2004For weeks, rumors have been rife that Wal-Mart is backing off its January 2005 deadline for having its top 100 suppliers begin tagging pallets and cases sent to a distribution center in Texas. Not so, says Simon Langford, manager of RFID strategies at Wal-Mart.
"We're on right on schedule with the timetable we laid out in June of 2003," Langford told RFID Journal. "This is not something where we will flick a switch on Jan. 1. Some suppliers are ready to ship tagged pallets and cases to our Texas facility. This will be a migration throughout this year."
Wal-Mart announced last week that it had gone live with an initial RFID rollout. The retailer is now tracking 21 items from eight suppliers at its Texas distribution center. Tags on pallets are being read at the dock door of the facility. Tagged cases are being tracked from the DC to the back of seven stores in the Lone Star State. Both the pallets and the cases use RFID tags carrying Electronic Product Codes (see Wal-Mart Begins RFID Rollout).
Wal-Mart expects that this first real-world deployment will provide the experience it needs to ensure that it meets its goal of reading 100 percent of the RFID tags on pallets at the dock door and on cases on the conveyor. It will also provide greater insights about how the retailer can use the technology to cut costs and improve on-shelf availability of products for consumers.
"As we start to get visibility right from the manufacturer to the sales floor and share it with our suppliers, there will be things that both sides can learn from and that enhance the way we do business," Langford says. "And as we deploy the technology, our store associates are coming up with new ideas, which is great."
While many analysts have questioned both the benefits of RFID and the ability of Wal-Mart to achieve its goals in the stated time frame, Langford was very optimistic about the technology. "Over the past year, RFID technology has not only come down in price, it has improved in leaps and bounds," he says. "Six months ago, we could read 30 to 40 percent of cases of bars of soap on a pallet. Today, we can read 100 percent. That's just one example, and we're not requiring that all cases on a pallet be read, but it demonstrates how far the technology has come."
Langford says that Wal-Mart has been sharing many of the things it has learned about using RFID with its suppliers to ensure that they will also get the benefits from the technology. He points out that 37 suppliers who are not in the top 100 have signed on to begin tagging product as of Jan. 1, suggesting that these companies see benefits for themselves.
In mid-June, the retailer will hold a gathering for the next 200 top suppliers, to brief them on its requirements and share information about its RFID program. "We're excited about the extra benefits [RFID can provide] to us and to our suppliers," says Langford. "Together, we'll be able to provide a better offering to consumers, so we’re not relaxing."
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