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RFID's Bump In The Road

Wal-Mart's suppliers may be delivering a setback to the retailer's RFID initiative, but that won't stop the eventual broad acceptance of RFID technology and the data it will yield.

The end of March brought big, though perhaps not shocking news that the companies supplying Wal-Mart with the products it sells aren't taking to RFID as quickly as the world's biggest company would like them to. It's a stumbling block for RFID technology, and the supply chain data bonanza the technology's proponents hope for, but it's not the end of RFID.

As a story from Gregg Keizer reported in Business Intelligence Pipeline, Forrester Research revealed that fewer than a quarter of Wal-Mart's 100 biggest suppliers will hit a Jan. 1, 2005 deadline to be RFID-compliant at the case and pallet levels.

In hindsight, it probably was unrealistic for Wal-Mart to assume it could snap the suppliers to attention on basically what came out to two years' notice. And it's likely the mega-retailer will have to soften its stance with its suppliers -- something that, incidentally, would be out of keeping with the way the hardline company is accustomed to dealing with them.

But the goal of eventual wide-scale adaptation of RFID is still intact. RFID tags attached to each case or pallet of goods, along with readers to identify the tags, will give companies nearly real-time information on the flow of everything in their supply chains. Eventually, analytics applied to that data will give retailers and manufacturers an unparalleled insight into their logistics and sales operations.

Wal-Mart might find it's pushed its suppliers too hard this time, but the company is the very one to push RFID successfully. With about a quarter trillion in sales during its last reported fiscal year and near-geographical ubiquity, Wal-Mart has very serious clout with the manufacturing community. RFID, the data the technology will yield, and the insights business intelligence will reveal from that data are several years off. But they'll become reality.

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