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» Wal-Mart, Suppliers Affirm RFID Benefits

by CHRIS KAPSAMBELIS, posted 02/25/2007

The big problem with passive EPC RFID is that it failed to perform any better than barcode. Wal-Mart based its vision on the perception that group reading (Pallet with cases) will eliminate the need for reading items one at a time. This was never possible because of Physics. When it comes to reading one at a time, barcode is superior.

In 2003 Wal-Mart was misled by the hype surrounding RFID in general, and failed to understand the limitations of the passive EPC RFID that was chosen for the Supply Chain.

> > Gabrielle,
>
> I based it on the paragraph in the article where Langsford
> says there are only 5 DC's implemented because they shifted
> focus to the stores where there is a more immediate ROI. I
> would have been more accurate to say "immediate ROI."
>
> It is hard to see where savings would come from though
> since barcode systems are so efficient and RFID poses some
> odd problems. Such as, what if a pallet of cases are
> checked in, and there are 3 cases wide, by 3 cases deep, by
> 3 cases high, but the RFID interrogator shows only 25 boxes?
> It would seem that 2 tags aren't transmitting; but which 2?
> How could you tell short of taking the pallet to the far
> corner of the parking lot and bringing in one case at a
> time until you got no reading on two of them. And how would
> you correct the problem so that the cases can proceed
> through the distribution channel? The tags are only 95%
> effective, so this problem would present itself constantly
> in a large DC.
>
>
>
> > Ken,
> > I ask this question for a greater understanding on my
> part.
> > What information did you base your statement that no DC
> ROI
> > exists?
> >
> > Thanks in advance for your reply.
> >
> >
> >
> > > This article denies the Wall Street Journal's claims
> > while
> > > simultaneously confirming them.
> > >
> > > The fact is, Wal-Mart under Linda Dillman was clearly
> > > mandating case-level RFID across the board. She told
> MSN
> > > Money Magazine that "they would not invest more time
> in
> > > suppliers that are reluctant..."
> > >
> > > The major CPG's co-opted the initiative to meet their
> > ends
> > > -- namely to insure store-level compliance with
> > promotional
> > > product in which they give Wal-Mart significant funds
> > for
> > > executing. No compliance -- no funds. The use of RFID
> > for
> > > promotions does benefit suppliers, consumers, and
> > Wal-mart;
> > > but it is not the vision Dillman had for the
> technology.
> > >
> > > It also confirms that the ROI at the DC's isn't there
> --
> > > which again was a major thrust of the initiative early
> > on.
> > >
> > >
> > > Finally, it confirms that using RFID to locate general
> > > merchandise among a sea of boxes in the back room
> > doesn't
> > > work either. For example, cases in the box bailer
> > waiting
> > > to be recycled continue to transmit data when the
> stock
> > > room is interrogated. A bit of a problem with no
> obvious
> > > solution.
> > >
> > > RFID does make sense for tracking P-O-P compliance,
> but
> > > that will fail to generate the kind of impact that
> > Wal-Mart
> > > originally suggested by many orders of magnitude.
> > >
> > > RFID will be useful in retail and Wal-Mart blazed the
> > > trail, but their initiative as originally conceived
> has
> > in
> > > fact fizzled. Why not redefine the initiative honestly
> > and
> > > move on?
> > >
> > >

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