An Update on EPC RFID Adoption

By Mark Roberti

Some leading adopters of EPC RFID say they wish they were further along, but are comfortable with the progress they've made to date.


Last week, I had the privilege of moderating several panels at EPC Connection 2008, the fifth annual conference and exhibition, which RFID Journal helped produce with EPCglobal North America. Overall, I think it’s clear that adoption hasn’t lived up to the early hype. Nonetheless, leaders of the EPC RFID movement are comfortable with the progress they are making.

One panel featured Alan Estevez, the U.S. Department of Defense‘s principal assistant deputy undersecretary of defense for logistics and material readiness, and Carolyn Walton, VP of information technology at Wal-Mart Stores. Both attributed the perception that their organizations are backing off or slowing down their efforts to adopt Electronic Product Code technologies to the fact that they have been less vocal in the past year or two regarding those efforts. Both indicated they weren’t satisfied with progress, because satisfaction implies complacency, but that they continue to make progress in terms of employing EPC RFID technologies to improve business processes.

I found it interesting that adoption at both Wal-Mart and the DOD is proceeding in some unexpected areas. Walton said, in essence, that Sam’s Club now leads Wal-Mart (Sam’s is a division of Wal-Mart), in that the wholesaler is focused on the sellable unit, while Wal-Mart has no current plans to tag at that level because it sells many individual items that are too inexpensive to tag, while Sam’s sells in bulk. Sam’s Club, she noted, has no intention of backing off from its plans to track goods at the sellable unit. (I also heard from one supplier that Sam’s will not accept shipments of cases sent from overseas unless they are tagged.)

According to Estevez, the U.S. Navy has moved ahead quickly with adoption. The military branch has deployed an RFID system to track supplies and equipment as they pass through naval base warehouses in Pearl Harbor, he said, as well as the warehouse operated by Marine Air Logistic Squadron 24 at the Kaneohe Bay Marine Corps Base, both located on the Hawaiian island of Oahu (see Navy, Marines Track Assets on Oahu). But he was realistic, adding that no matter who wins the U.S. presidential election on Nov. 4, funding will be tight given the United States government’s recent expenditures to prop up ailing banks.

I also hosted a panel with Chris Adcock, president of EPCglobal Inc., and John Seaner, president of industry development for EPCglobal North America. I would describe both gentlemen as pleased with the progress of EPC RFID adoption, though some of the buzz from a few years ago has dissipated. Seaner pointed out that while few retailers in the United States have issued tagging requirements, many are presently running pilots and finding benefits in a variety of areas. Widespread adoption won’t happen over night, he asserted, but it will happen. Adcock cited growing adoption by large and small retailers in Europe and Latin America, as well as many pilots in Asia.

The third panel I hosted was related to an industry initiative known as New Ways of Working Together, launched by Wegmans Food Markets and The J.M. Smucker Co. This panel featured Ann Dozier, VP of collaborative customer capabilities for North American retail sales at The Coca-Cola Co.; Mark Pollock, director of global EPC RFID initiatives at Kraft Foods; and Milan Turk, Jr., managing director of global customer e-collaboration at Procter & Gamble.

What was encouraging about this panel was that these large consumer packaged goods companies view EPC RFID adoption not as an end in and of itself, but rather as part of a broader collaboration effort. Why is this encouraging? Because the major benefits from adopting EPC RFID—a version of passive ultrahigh-frequency (UHF) RFID based on open standards—come from collaboration. And if adoption of EPC RFID technologies is part of a broader strategic initiative, it is more likely to gain traction in the medium and long term than if it were viewed as a panacea for supply-chain inefficiencies.

The event was smaller this year than in years past, no doubt due to recent turmoil in the financial markets and the associated economic uncertainty, but also because of erroneous media reports that industry leaders are backing away. It’s too bad many missed an opportunity to learn how to deploy EPC RFID cost-effectively, because EPC RFID might be about to enter a new phase of adoption. I wouldn’t be surprised to see Wal-Mart and Sam’s Club move more aggressively in 2009. Walton, for instance, mentioned a category trial in which suppliers are tagging all cases in specific categories to confirm a smaller pilot’s conclusion that sales rise across the board when all cases are tagged. Suppliers and competitors not yet ready to follow suit might find themselves left behind.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark’s opinions, visit the RFID Journal Blog or click here.