May 10, 2006Bailian Group, China's largest retail chain, has begun the second phase of a pilot program to use RFID technology to track goods within its distribution center, as well as shipments from some of its suppliers.
Sometimes known as the "Wal-Mart" of China, the Shanghai-based retailer has completed the pilot's three-month initial phase, in which the retailer tested RFID technology in a simulated environment. During the trial, Bailan Group evaluated hardware and considered how well the RFID systems would work with its legacy computer systems.
Next, during phase two, the retailer will begin tagging items at its Shanghai warehouse and track how long goods are kept in the distribution center, as well as how they are moved around while there and where they are stored. The retailer also expects some of its suppliers to begin tagging cases or pallets of goods shipped to that DC.
Information services company VeriSign is supplying Bailian Group with a number of EPCglobal Network components such as Object Naming Services (ONS), EPC Information Services and Track & Trace Services. The retailer's RFID deployment uses 928 MHz passive RFID tags and readers from ADT, RFID middleware from Cisco and wireless networks and handheld readers from Psion Teklogix.
"With phase two, we are moving from the lab to real life," says Trent Peterson, senior manager of international business development for VeriSign, based in Mountain View, Calif. The Chinese retailer is growing, he says, and intends to open distribution centers in other parts of the country. It may also extend its RFID system to those new DCs.
The pilot will include the participation of key Bailian Group suppliers that have deployed RFID-tagging technology, or intend to do so. "Bailian Group would like to see more suppliers tag cases," Peterson says. This tagging may begin with regional suppliers and expand to others not in the immediate vicinity. Based on his own experience with RFID deployment in retail stores around the world, Peterson adds, "Suppliers see a benefit for data exchange with retailers."
With Bailian Group's comparison to Wal-Mart, some suppliers may be concerned that the Chinese retailer will issue an RFID mandate similar to Wal-Mart's. Petersonreports, however, that "there is no talk about a mandate today."
While the phase-two pilot is specific to the Shanghai distribution center and participating suppliers, Bailian Group hopes to extend it to more suppliers, and to some of its approximately 7,000 stores across China, as well. "They are taking this in a measured, step-by-step approach," Peterson says. "Right now, tagging is limited to certain items."
