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3/2/2005
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Wal-Mart CIO Says RFID Is Here To Stay

Addressing thousands of execs at RFID World, Wal-Mart CIO Linda Dillman said the debate about whether RFID will happen is over.

Linda Dillman, CIO of the world's largest retailer with revenue in excess of $250 billion a year, is one happy executive. Wal-Mart Stores Inc., which took little-known radio-frequency identification and made it the hottest supply-chain technology around, is on track to have RFID in 600 stores and 12 distribution centers by year's end.

"The best thing about being here today is we are now past January 2005, and I don't have to stand up here and debate whether it will happen, because it did," Dillman told thousands of executives attending this week's RFID World Conference & Exhibition in Dallas. Since revealing two years ago that it wanted its top suppliers to begin shipping RFID-tagged cases and pallets of goods in January, Wal-Mart has installed 14,000 pieces of hardware, has run 230 miles of cable, and is live with more than 100 suppliers. RFID is installed in 104 Wal-Mart stores, 36 Sam's Clubs, and three distribution centers.

Wal-Mart and other retailers say RFID will help them track goods throughout the supply chain and ultimately will help them get the right products in the right stores at the right time. It'll also help locate specific products anywhere in the supply chain, which should make recalls easier to manage. "Getting merchandise to the shelf is important to us," Dillman said. "Tracking recalls is one of the next projects Wal-Mart is working on."

RFID is not new. But before Wal-Mart revealed its initiative, the technology was used mainly for tracking very high-value assets. One analyst has called RFID "the oldest emerging technology," said Julie England, VP of Texas Instruments Inc. and general manager of its RFID business. England kicked off the opening of the show, which has grown from a mere 250 attendees two years ago in Fort Lauderdale, Fla., to more than 3,000 attendees today.

Wal-Mart's RFID efforts to date have taught the retailer a lot about the technology, Dillman said. "The data is critical, and suppliers are starting to use the data in different ways," she said, citing benefits ranging from total supply-chain visibility, improved product in-stock rates, and protection against product counterfeiting.

Processes in the past year have changed, and Wal-Mart has learned what's needed for rapid deployment of RFID technology and how to minimize deployment costs. "The model we had a year ago you couldn't have deployed it in 104 stores," she said.

"The message I want you to take away is, it's working--we aren't doing it as an exercise," Dillman told attendees. "From the manufacturer to the suppliers to the customer there is a benefit. Start sooner than later. I don't know about you, but I don't like to be a follower. Start small. Our team in the first year had five associates that made this happen at Wal-Mart; today we have nine. If you have a small group that understands the business and have faith, you can make it happen. Recognize it's a journey. It's not a single step."

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