Update: The Wal-Mart RFID Initiative

Oct 07, 2004

By Ronald Margulis

In less than three months, the world as retail, wholesale and manufacturing professionals will change dramatically. In January 2005, Wal-Mart’s edict that its top 100 suppliers
start shipping cases and pallets that are uniquely identified with computer chips. This “will not just transform the way product ID is captured, stored and analyzed, but
will revolutionize the way is business is done in the retail supply chain and deliver unimaginable benefits.”

The author of this comment was Kerry Pauling, an information technology manager at Wal-Mart, who gave an update on the retail giant’s RFID activities to a group of about 400
attendees to the Council of Logistics Management’s annual conference in Philadelphia earlier this week.

Pauling said the rollout of the top 100 suppliers was on schedule and would actually include more than 30 additional vendors. He reported that Wal-Mart is currently live with one pharmacy DC, one general merchandise DC and seven stores in the Dallas area, and that things are going smoothly.

Pauling also was very clear on what the rollout is encompasses —

  • It will not cover all cases
  • All stores and DCs will not be live right away
  • Wal-Mart will work with suppliers to help bring them into compliance

Wal-Mart does expect about 65% of its volume to be delivered on pallets with RFID chips by sometime next year, and will extend the rollout to the next 200 suppliers and start the international rollout in 2006.

Moderator’s Comments: Is there a sense of urgency amongst Wal-Mart suppliers about meeting the rollout deadlines? Is Wal-Mart pushing for use of RFID
before suppliers have been able to make their business case for the technology?

Manufacturers I’ve heard from recently aren’t feeling any anxiety over the January 2005 edict because they don’t expect tough enforcement by Wal-Mart.
As long as they are tagging pallets and showing marked progress toward tagging cases, they expect to be OK. This is going to lead to some half-baked solutions that will meet the
Wal-Mart requirements but won’t deliver the information that can help the manufacturer run his business better.

Ronald Margulis – RW Commentator

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