Wal-Mart RFID Initiative to “Continue Unabated”

By Admin

Late last week Wal-Mart issued a press release which provides the most recent public guidance on the company's RFID initiative. This article highlights the three key points.

This article was originally published by RFID Update.

April 17, 2006—Late last week Wal-Mart issued a press release which provides the most recent public guidance on the company's RFID initiative. Highlighted below are the three key points:

CIO change will have no impact on RFID initiative. Phrases like "continue unabated", "there will be no slowing down", and "unequivocally committed" are used in the press release to describe the company's RFID initiative, despite the fact that Linda Dillman -- widely credited with being the driving force behind the initiative -- is no longer CIO (see our article RFID Visionary No Longer CIO at Wal-Mart). The new CIO, Rollin Ford, used last Wednesday's biannual CIO Summit as a platform to "strongly endorse" RFID. Ford was previously the company's executive vice president of logistics and supply chain, and he has served on the Wal-Mart RFID executive steering committee for the past three years. Clearly the company was eager to assuage any concern that the recent CIO move would adversely affect the mandate.

Gen1 will be made history on June 30th. Ford also used the summit to officially announce the retailer's Gen1 "sunset date", the date after which Wal-Mart will no longer accept goods tagged according to the Gen1 standard. This surely comes as welcome news to Wal-Mart suppliers and RFID vendors alike, who have been clamoring behind the scenes for an official sunset date to kill the limbo between Gen1 and Gen2 technology. Wal-Mart had previously indicated that Gen1 would be sunsetted this summer, but a firm date now allows suppliers and compliance vendors to move forward with singular devotion to Gen2. It also represents a very strong vote of confidence in Gen2 technology. While Wal-Mart had previously referred to the "step change" in performance that it observed between Gen1 and Gen2, its move to become a pure-Gen2 shop backs up those words with definitive action. Lastly, given Wal-Mart's close relationships with many of the RFID vendors, it is in a good position to understand product availability. By proclaiming a Gen1 sunset date, the company presumably feels comfortable that vendor supply capacity for Gen2 readers, tags, etc. is sufficient to meet what will surely be an uptick in demand. This is an important point, since insufficient supply for both Gen1 and Gen2 technology has at times weighed down the industry.

Wal-Mart firmly in UHF item-level camp. The last point Wal-Mart made in the press release was its "enthusiasm" for the developments around UHF item-level tagging. Recall that UHF has recently been touted as an alternative to HF for item-level tagging. While the conventional wisdom was historically that UHF technology (Gen2 is UHF) cannot work around "RF unfriendly" liquids and metals, advancements led by chip-maker Impinj suggest that this is false, and that using "near field" UHF will indeed allow Gen2 tags to work in liquid and metal environments (see our article Impinj Launches UHF Tech for Item-Level Tags). This is particularly relevant in the pharmaceutical supply chain, since it is both an early field for item-level deployments and one whose products are often unfriendly to RFID. The debate between UHF and HF was fueled when RFID solutions provider ODIN technologies released a benchmark report that concluded HF was the appropriate technology for pharma item-level tagging (see our article Report: HF Wins First Round of RFID Frequency Battle).

Wal-Mart has been a supporter of UHF for pharma, which the specific mention of the technology in the press release only reinforces. Significance? Wal-Mart itself operates a large percentage of the pharmacies in the US, so as with typical retail, it can wield considerable influence over its pharma suppliers.

Read the press release from Wal-Mart