Wal-Mart Calls for Collaboration

Senior Wal-Mart executives took to the stage at the Retail Systems trade show in Chicago this week to call for collaboration with suppliers and other retailers to generate industry-wide benefits for RFID. The remarks come at a time when there is talk of resistance from suppliers who are being asked to put RFID tags on pallets and cases for the world’s largest retailer.

Wal-Mart’s Mike Duke

“Bar codes have transformed the way we all do business,” said Mike Duke, president and CEO of Wal-Mart Stores Division (USA). “RFID will not just transform how we do business but will revolutionize how we all do business. I don’t think we can even imagine all the benefits that it will deliver.”

He said Wal-Mart has been collaborating closely with its suppliers. “We are pleased with the level of support we’ve received from suppliers,” he said. Duke added that Wal-Mart accepted there would be give and take between the retailer and its suppliers, and it did not expect the top 100 to be tagging 100 percent of the pallets and cases shipped to its Texas distribution center beginning in January 2005.

“Some of our suppliers will be tagging most of the SKUs they send to the DC” in Texas, where Wal-Mart plans to start the RFID rollout next year, he said. “But there are some suppliers who have many, many products. And if some of those products are difficult to tag, we won’t stop buying them.”

Duke pointed out that Wal-Mart was working with working groups under the Business Action Group within EPCglobal to promote a single standard for using Electronic Product Code technology within the retail industry. “We can’t go it alone,” he said. “What’s important is all of us working together” to promote industry adoption and achieve the business benefits.

The message that all mass merchandise retailers need to agree on a standard and on how to share EPC data with suppliers was brought out more dramatically when Wal-Mart CIO Linda Dillman and her counterpart at archrival Target, Paul Singer, appeared on a panel together. The two said they wanted to show unity in their approach, which would be good for the many suppliers that serve both customers.

“We never seem to do things one way in this industry,” said Singer. “We have two EAS systems, and we had two electronic marketplaces. I thought, What better way to convince people we are going to do this one way than to walk out on stage holding hands with Linda Dillman and announce that to the world?”

Dillman stressed that Wal-Mart wanted to work with Target and others through EPCglobal to define standards that would work not just for retailers but also for their suppliers.

On the panel with Singer and Dillman were Mike O’Shea, director of auto-ID/RFID strategies and technologies at Kimberly-Clark, and Dick Lampmann, senior vice president of Hewlett-Packard. Lampmann is a member of EPCglobal’s board of governors and O’Shea is a cochair of EPCglobal’s User Action Group.

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