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Wal-Mart Spells Out RFID Vision

At the Retail Systems 2003/VICS Collaborative Commerce event in Chicago last week, Wal-Mart CIO Linda Dillman spoke extensively about the retailer's plans for using RFID.
By Bob Violino
Jun 15, 2003—June 16, 2003 - For the past few months, Wal-Mart has been working to get its suppliers to focus on RFID, so that they will be ready to tag cases and pallets when Wal-Mart is ready to begin using RFID. Last week, at the Retail Systems 2003/VICS Collaborative Commerce event in Chicago, which was co-located with RFID Journal Live!, Wal-Mart CIO Linda Dillman spoke extensively about Wal-Mart's plans for using RFID.
Wal-Mart's Dillman

Dillman spoke with Michael Di Yeso, the Uniform Code Council's executive VP and chief operating office, in an effort to promote adoption of the Electronic Product Code. Di Yeso stressed that "this is not a UCC initiative. This is not a Wal-Mart initiative. This has to be an industry initiative."

He said that the retail industry "will not capitalize on the full benefit of RFID if it remains within the four walls of the enterprise. The only way we can capitalize on the full benefit of RFID is if the technology becomes open, is based on standards and is implemented by multiple sectors." He added that he and Dillman "really hope to indicate today that this industry is going to get behind EPC. There are a lot of flavors of RFID out there, but it is not just RFID anymore; it's EPC."

Dillman emphasized that view in her remarks. Here are excerpts from her speech:

EPC is retail's implementation of RFID. If you think about it in its simplest terms, you could put the EPC code as the identifier that you send from that little tag. It just makes it a much easier, more accurate way to get the same information in your supply chain and in your stores.

I'm going to talk a lot about potential. I'm assuming a lot of you have heard about what the potential is. We believe in the potential, but one has to have the right path to get there.

Dillman then spelled out the benefits in the supply chain, starting with efficiency:
It allows suppliers to have more efficiency while supplying us. It can improve the supply chain, so they have true real-time response on products.
--High-resolution recall: I know recall is not on anyone's list today as an issue. Imagine having the ability to only recall the products at issue and not have to send out a very wide, broad recall. Huge impact.
--Within distribution centers, automated inventory counts: 100 percent accurate inventory counts. Inventory management is a concern for all of us.
--Factory receiving and shipping: You don't have to touch the product to identify what it is when it comes in the back door or goes out of the store.
--Quality inspections: If you are receiving on [advanced shipping notices] and you periodically have to do quality inspections to make sure you are being shipped what you were told you were being shipped, that is very easy with an EPC.

Dillman then went on to talk about the benefits in the store, starting with the most immediate, largest impact first:
--Reduced out of stocks: To have the right merchandise on the shelf for the customer when they need it -- not in the back room, not somewhere else in the supply chain -- is huge, and the goal is very reachable.
--Theft prevention: A better solution sometimes than EAS tags.
--Product tracking.
--Automated checkout has been laid out as nirvana. It will get there one-day. I asked the gentleman who leads our store operations group for Wal-Mart I said: When do you believe, based on what you know, that we’ll be using RFID or EPC in the checkout. He said three years, and I fainted. This one takes a while to get there. It's the only implementation that I know of that, as a retailer, we don't get any benefit until 100 percent of the product is tagged. Until every single item in the store is tagged, we still have to touch it -- a cashier has to move it -- at the front end you don't get any of the benefits.
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