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March 1, 2004

PRESS RELEASE - FOR IMMEDIATE RELEASE

Editorial inquiries, contact:
George Anderson
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geoanderson@retailwire.com

Experts Discuss Next Steps to Implementing RFID Technology

Target's recent announcement that it has asked its largest suppliers to have radio frequency identification (RFID) tags on pallets and cases by the spring of 2005 follows similar announcements by retail giants such as Wal-Mart and Metro.

While the technology is far from perfect, many see it as the future of the supply chain, offering distributors better inventory control and, with that, cost savings. Others, including Costco, Home Depot and Lowe's, are said to be pursuing internal RFID initiatives with a time-frame similar to Target's.

RetailWire.com recently discussed the realities and potential of RFID with its BrainTrust of industry experts.
Bill Bittner, president, BWH Consulting says the benefits of RFID use in the supply chain are already established but cautions that the devil is in the details.

"The first thing is the need to finalize the standards. EPC Global is working feverishly with the various technology and user groups to reach a final draft on the data content, encoding, and radio frequency transmission requirements. These must be combined with existing standards for supporting 'serialization' in various electronic documents, such as Advance Shipment Notices and possibly Invoices."

Ted Gladson, president of Gladson Interactive, agrees. "The standards are still a work in progress for being able to read the tags reliably. Once that can be done, you need your backend system to do something with the huge amounts of data that will be generated.
"While RFID is getting all the press, very little is being said about the data that RFID will generate, how we will aggregate the data and, most importantly, what actions we will take once we have the data. The first step should be synced data."

Bittner adds, "The simplest applications (e.g. building a "pull list" for stocking the selling area) may use existing applications and merely change the source of their input. Truly new applications that, for example, warn the store personnel of expiring product freshness or recalls, require new programming, network connections, and databases. Who will actually maintain some of this data is not yet known."

One member of the RetailWire community (user 'handle' - PStegeman) urged greater caution. "Although this technology will eventually help improve the supply chain, I don't think the speed at which retailers are asking manufacturers to employ it will serve anyone well. The BIG problem is the ability of the standards organizations to keep up with these mandates. Global Data Synchronization (GDS) has not yet begun to take hold in the U.S., despite a concentrated effort on the part of many executives. And, unlike GDS, which has really only been pushed in the U.S. to this point, EPC mandates are coming from both U.S. and EU retailers. Let's ensure the standards and the technology are consistent globally before wasting a lot of money chasing a system that is not ready."

While all the answers may not yet be known, it is clear the RFID train has left the station. As Ron Margulis, managing director of RAM Communications says, "When the combined retail strength of Wal-Mart, Target, Costco and Home Depot is supporting an initiative, it will be hard to stop it."

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The complete RetailWire.com discussion forum entitled "The Seniors' Market" can be viewed at: http://www.retailwire.com/email/discussion.cfm?doc_ID=9658

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