Some Suppliers Dragging Feet on Wal-Mart’s RFID Program
By George Anderson
Wal-Mart’s top suppliers that participated in the first phase of its radio frequency identification (RFID) technology program all met the minimum requirements set by the retailer but that is not going to be good enough going forward, says the company’s chief information officer.
Linda Dillman told MSN Money magazine last week, “We’ve started communicating to some of the suppliers who have been reluctant — which is a nice way of saying it — to say, ‘We can’t invest any more time in you’.”
Kara Romanow of AMR Research told The Morning News, Wal-Mart is taking a “hard line” with suppliers it views as impeding progress on its RFID initiative.
“The message hasn’t really changed, I’m just not sure how much they’re enforcing it. (The suppliers) are dragging their heels because there’s no (return on investment) for them,” said Ms. Romanow.
Greater participation will only happen, said Ms. Romanow, when it makes financial sense for suppliers.
“The cost model doesn’t support it,” which is why some suppliers have tagged only a “handful” of products, she said.
“Those 100 suppliers did their minimums, rather than embracing it fully,” she said. “It’s a manual process, in most cases — slap and ship. They don’t have the infrastructure in place.”
Some categories of products, such as electronics, with higher price points can support the cost involved with using RFID, said Ms. Romanow. She is looking for manufacturers and distributors of higher ticket items to continue working with Wal-Mart and other retailers to improve supply chain efficiency and reduce costs using RFID.
Moderator’s Comment: What is the real story behind the progress being made using RFID at retail? –
George Anderson – Moderator