The first time tags are read on goods at the store is when they arrive at the receiving bay. On either side of each door at the back of the store, Wal-Mart has installed RFID readers and antennas in metal enclosures. When a shipment arrives, the truck backs up to a door. On the grocery side of the store, Wal-Mart reads all the tagged pallets and as many tagged cases on those pallets as possible. On the mass-merchandise side of the store, staff wheel an accordion-like flexible conveyor up to the back of the truck and take cases off individually, slide them down the conveyor and stack them on pallets in the back room according to product category—toys on one pallet, electronics on another and so on. As each case passes an RFID antenna, a light flashes, indicating that the case’s tag has been read. But there are no computer screens, nothing to slow the unloading of the trucks. The tagged cases are not stacked separately from cases without RFID tags.

Changing business processes
The company is reading 90 percent to 98 percent of singulated cases (those not stacked on a pallet) as they come in to the store and nearly all of the pallets, but only about 60 percent of the cases on pallets (radio waves are unable to penetrate many products to reach the tags on cases in the center of the pallet). Langford says the read rates are high enough to allow Wal-Mart to change business processes and take advantage of the data (for an explanation of how Wal-Mart copes with less-than-perfect read rates, see Not Perfect, But Good Enough).


On-hand inventory is updated, but instead of assuming 10 cases arrived, Wal-Mart now knows 10 cases arrived. The retailer has also installed RFID readers at the doors to the sales floor. When cases or pallets are taken out of the back room and brought to the sales floor to replenish the shelves, the tags on those cases are read. The inventory system in the store has been upgraded to handle RFID data, and the cases are given a temporary status in the system: They are characterized as “being stocked.”

If the readers at the entrance to the sales floor read the case again, Wal-Mart knows the case has been returned to the back room and into inventory, and its status is changed. If a reader installed by the trash compactor reads the tag, Wal-Mart assumes that the items in a case have been put on the shelf. “That’s probably the most critical read point, because that’s the end of the product’s life,” says Langford. “Once we see an EPC at that point, we can make a fair assumption that the product is on the shelf.”

Automated pick lists
Today, only a small percentage of the 62,500 stocking-keeping units in a typical Wal-Mart store or the 116,000 SKUs in a typical Wal-Mart Supercenter arrive with RFID tags. But by placing readers at the three key locations—receiving bays, between the back room and sales floor, and trash compactor—Wal-Mart is able to know where those products are within a store with reasonable certainty.