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Making RFID Work for All

Having learned from the experiences of early adopters, companies are engaging suppliers in more collaborative ways to encourage them to tag items or shipments.
By Mark Roberti

It will take a time for Airbus' suppliers to set up tagging operations and begin delivering tagged parts to an Airbus facility for installation on aircraft, so it will take a while for the new categories of tagged components to enter service for customer use. But airlines are already beginning to take advantage of tags attached to seats and life vests installed on Airbus planes. Some savvy carriers are realizing that RFID can be used not only to track parts but also for physical logistics, tooling management, aircraft configuration and other processes. Airbus is providing both guidance and consulting services to help these companies develop a smart approach to using RFID.

"For us to succeed, our suppliers upstream need to succeed, and our customers downstream need to succeed," Nizam says. "So we've been trying to help the industry move away from an analog- and paper-based supply chain to a more streamlined, automated and digitalized supply chain. RFID helps create that digital state of connectedness to our parts and processes that many are now calling the Internet of Things."

Walmart changed its strategy and began working with clothing suppliers that understood the value in tagging items for the retailer—sales went up due to better on-shelf availability, which benefited both retailer and supplier. When Walmart began tracking its private-label jeans, sales rose significantly. The retailer shared that information with its jeans suppliers, which agreed to tag jeans voluntarily. Suppliers of men's basics also got on board.

Macy's is asking suppliers to tag items that are replenished regularly, but is not forcing compliance. Instead, it's working with suppliers to help get them up to speed with RFID. Macy's supported the Voluntary Interindustry Commerce Solutions Association (VICS) Item-Level RFID Initiative (now the GS1 US Item Level RFID workgroup), which funded research by the RFID Research Center to identify use cases for suppliers. Only a small percentage of Macy's suppliers have begun to use tags for internal benefits.

There will likely be some companies that push RFID on their supply-chain partners, and others that take a collaborative approach. Either way, it's clear that companies have learned from early adopters that helping partners achieve benefits is good for business.

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