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Wal-Mart Relaunches EPC RFID Effort, Starting With Men's Jeans and Basics

The retailer has shifted its focus from tagging all pallets and cases to working with suppliers to tag items in categories where the company and its partners will see the biggest benefits.
By Mark Roberti
Jul 23, 2010Wal-Mart Stores is working with suppliers of men's jeans and basics (socks, undershirts and underwear) to be able to track these items using radio frequency identification tags based on EPCglobal's second-generation ultrahigh-frequency (UHF) RFID standard and carrying Electronic Product Codes (EPCs). This effort is part of the next stage of Wal-Mart's EPC RFID program, which will concentrate on the types of products that have multiple stock-keeping units (SKUs) and are, therefore, a challenge to manage from an inventory perspective, according to Myron Burke, Wal-Mart's director of store innovation, who is leading the retailer's EPC RFID program in the United States.

"We are addressing the opportunity to improve inventory accuracy and inventory availability," Burke says. "We have been working collaboratively with suppliers on a strategic basis to make this part of our systems."

Wal-Mart has been working with suppliers of denim products and basics for the past eight months, to enable those suppliers to tag goods at the point of manufacture so that they, like Wal-Mart, can benefit from using the tags. Unlike previous efforts, in which Wal-Mart required suppliers to tag by a certain date, the retailer is now working with suppliers collaboratively to incorporate EPC RFID data into their warehouse-management systems, and to change their business processes so they can take advantage of the EPC RFID tags to receive goods into inventory more quickly and accurately, improve their own inventory accuracy and reduce errors when picking and shipping goods. Some suppliers are already tagging jeans and basics; the rest are slated do so by the end of the year.

Early this year, Wal-Mart began explaining to suppliers of jeans and basics that they should tag these goods with EPC RFID inlays, and that the RFID transponders should be embedded in hangtags, labels or exterior packaging printed with the EPCglobal seal, indicating the presence of an EPC RFID tag. Wal-Mart employees will not be removing the RFID tags when items are sold or deactivating the tags, but the retailer expects its customers will cut off and discard the tags prior to wearing the items, as they customarily would for other non-RFID labels and hangtags. Wal-Mart has asked the suppliers to not sew the tags into clothing. Wal-Mart will not be reading the tags at checkout, so the EPCs will not be associated with any personally identifiable information, to protect consumer privacy.

The apparel items will be tagged at the point of manufacture. Wal-Mart will read the tags as the goods arrive at stores' loading docks, when they move from the back of the store to the sales floor, and on the sales floor itself. Burke indicated that new RFID hardware and software systems have been developed, not just to tell Wal-Mart which items need to be replenished, but also to show when items are on the wrong shelf or missing from a shelving unit.

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