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The Industry Breathes a Sigh of Relief

News that Wal-Mart is continuing its RFID rollout is being greeted as welcome news by RFID vendors.
Posted By Mark Roberti, 09.12.2006
By Mark Roberti

Not sure whether RFID vendors are, by nature, a nervous lot or if there is still some question about whether radio frequency identification will really become ubiquitous in the supply chain. Vendors had been expressing concern about Wal-Mart's efforts since Rollin Ford took over as Wal-Mart's chief information officer from Linda Dillman in April.

As the new CIO, Ford naturally took a cold, hard look at Wal-Mart's RFID efforts, and there was concern that he might slow down that effort or change the nature of the rollout. That would be bad news for RFID vendors, because they feel they need Wal-Mart to drive adoption.

Today, Wal-Mart put out a press release indicating it will bring another 500 stores and Sam's Clubs online with its RFID initiative by the end of this fiscal year, bringing the total number of its retail locations using the technology to more than 1,000. (The company has more than 3,900 total locations in the United States.)

Ford said, in a press release, that "recent internal analysis" of the initiative "reinforces the value of this technology for Wal-Mart, our suppliers and, ultimately, our customers. We're aggressively moving forward with the expansion of RFID-enabled facilities."

While some portrayed this as an "expansion" of Wal-Mart's RFID initiative, it was really just a recommitment to the retailer's plans to be in 1,000 stores by the end of the year. It announced that goal nearly a year ago (see Wal-Mart To Expand RFID Tagging Requirement).

Nevertheless, vendors felt it was good news that Ford has done the analysis and reaffirmed that the RFID program should continue on course.

One interesting note: In the release, Ford said all new Wal-Mart installations would only read tags based on EPCglobal's second-generation UHF standard. Wal-Mart has made it clear to suppliers that it wants them to stop using Gen 1 tags, but many had large inventories of tags that they needed to use up.

Wal-Mart had hoped to get suppliers to switch to Gen 2 by June 30 (see Wal-Mart Specifies Gen 1 Sunset, Forklift Pilot). It's now saying it will accept Gen 1 tags at stores with Gen 1 interrogator equipment, so suppliers don't get stuck with tags they can't use.

The bottom line: despite all the hand-wringing about Wal-Mart's RFID initiative, it continues apace.

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