RFID Wal
Mart
The retail
giant was expected to throw its weight behind RFID (radio frequency
identification) technology at the Retail Systems 2003 industry
conference in Chicago. Sources familiar with the
company's plans said executives will make a presentation encouraging
its top 100 suppliers to start using wireless inventory tracking
equipment--chips affixed to products, and scanners in warehouses--by
2005.
Wal-Mart's
endorsement of RFID Wal Mart gives an important boost to efforts to
overhaul the world's supply chains, a makeover that could provide a
shot in the arm for technology companies struggling to find buyers
for the latest products and services. RFID is expensive, but backers
say it offers long-term benefits that could dwarf the impact of the
bar code on inventory control and distribution.
RFID spending
will be "bigger than...Y2K," predicted AMR Research analyst Pete
Abell. "I imagine there will be a rush on investing in RFID."
Suppliers are already exploring the use of RFID technology in
tracking goods from the factory to warehouses. But backing from
retailers is considered important because it could ultimately allow
products to be tracked on store shelves.
Executives from
Bentonville, Ark.-based Wal-Mart are expected to aggressively push
for the adoption of RFID Wal Mart technology during a presentation
at an upcoming event for retailers, suppliers and distributors,
sources said. Part of the discussion will involve the significance
of standards development and its effect on the widespread adoption
throughout the supply chain.
Wal-Mart
representatives did not return calls for comment.
RFID tags have
the potential to streamline and improve inventory management by
allowing manufacturers to more efficiently enter and track the flow
of goods. For example, RFID could let a company add a boxful of
goods to its inventory systems all at once, without having to unpack
the carton and scan each piece separately. An RFID scanner can pick
up signals from all the chips in the sealed box, something bar code
systems can't do.
The cost
savings could be substantial for RFID Wal Mart, the world's biggest
retailer with sales of $217.8 billion in 2002. AMR's Abell estimates
that Wal-Mart's costs associated with supply chain--including
storing, transporting and keeping track of goods--are about 10
percent of overall sales. RFID, Abell said, could save 6 percent to
7 percent of those costs annually. Using the 2002 figures as a
model, that would amount to about $1.3 billion to $1.5 billion
saved.
Such savings
are an attractive brass ring, but installing the technology is no
small task. Wal-Mart suppliers "may find it difficult to meet the
early 2005 time frame," Abell said.
Let’s see how
RFID Wal Mart are associated together. Recently, Walmart goes
serious with RFID. A
good discussion on RFID Wal Mart MetaFilter. Apparently, US Giant
retailer Walmart is forcing its top 100 suppliers to track goods
using RFID by 2005. Walmart even seems to track women's panties
already!
Gilette started
the wave last year, but if every single product one buys now will
implement a long-lived passive tracking device, the opportunities
are rife for retailers to dig into people's
privacy...
Now, instead of
paranoid worries, I hope people start focusing on the promise of
RFIDs: instant checkouts, instant inventories, instant customer
feedback to the retailer (meaning better product choices by the
stores) and much better inventory management (meaning lower
prices!). Never mind traceable warranties, potential theft
prevention/insurance, etc, etc, etc...
RFID Chip, also
known as RFID tags, is being touted as the greatest invention for
retailers since the bar code. A tiny computer chip can be embedded
in any product for sale, or the package it comes in, to uniquely
identify it. In a store such as Wal-Mart, a company seriously
interested in the technology, an RFID scanner sends out a radio
signal, and each chip responds. The retailer has just taken
inventory, saving a great deal of work. As great as this may sound,
there is a dark side to this
technology.
