Wal-Mart is already using that information to generate pick lists automatically for the tagged items. Here’s how it works. Ten tagged cases arrive at the back of the store. Two are brought out to the sales floor. Wal-Mart’s inventory system knows how many items can be stored on the shelf and how many are in a case. So let’s say the shelf can hold 16 items, and each case contains eight. The inventory system knows that the shelf is full.

The retailer’s existing point-of-sale system, which uses bar codes, not RFID, records how many items are sold over the course of a day or week. Each item sold is subtracted from the 16 on the shelf. When, say, 12 items are sold, the inventory system knows there are only four on the shelf, and it triggers an alert for that item to be added to a pick list. “Based on sales history, we can prioritize lists by which items are going to sell out first,” Langford says. “So, instead of getting into a situation where there’s an out-of-stock, we can fill those gaps before we sell out.”

Occasionally, associates indicate through their handheld computer/bar code scanner that they’ve picked an item when they haven’t done so. Without RFID, Wal-Mart has no way of knowing whether an item really has moved from the back room to the sales floor. And this relatively minor issue can be compounded if a manager, thinking the back room has no inventory of that item, orders more from the distribution center. Wal-Mart ends up with too much inventory in the back and a still-empty shelf. With RFID, the only way the inventory system is updated to indicate that a shelf has been replenished with a particular product is if a reader located between the back room and the sales floor reads the tag on a case of that product.


The back room of a Wal-Mart Supercenter is surprisingly small. There isn’t a lot of space for inventory, but associates can still spend upwards of 20 minutes looking for an item on a pick list. To reduce that time, Wal-Mart is introducing a handheld RFID reader that works something like a Geiger counter. An associate can walk down an aisle in the back room, point the reader at stacks of boxes and listen for a beep when the correct case is within the read field. That enables the associate to spend less time in the back room hunting for product and more time with customers on the sales floor. “It’s a big advantage for us,” Langford says. “We can work more effectively. It’s better for our associates, and it’s better for our customers.”

Wal-Mart also plans to introduce alerts for RFID-enabled product. If associates change on-hand inventory to zero and order more of a product from the distribution center, the system will let them know that the product is in the back of the store and should be taken out to the sales floor. “We’ll put in some management tools around that,” says Langford. “But if an associate still sets the on-hand inventory to zero, we know what the unique serial numbers are on the cases, so if we see those cases come out later, we know the decision was wrong. We can correct the on-hand inventory information and add those cases back into the system so we have a more accurate inventory.”