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Eight Suppliers To Be Used For Wal-Mart's April RFID Pilot Program

Wal-Mart has yet to name the eight suppliers, but says three of its warehouses in Dallas are already equipped with RFID readers to handle the shipments.
Wal-Mart Stores Inc. in April will launch its first radio-frequency identification working pilot program with eight as-yet-unnamed suppliers, according to Linda Dillman, Wal-Mart's executive VP and CIO of information systems. Cases and pallets of the suppliers' products with passive RFID tags will be shipped to three of Wal-Mart's Dallas distribution warehouses that have been equipped with RFID readers at all shipping and receiving doors.

Speaking at the Grocery Manufactures of America conference in La Jolla, Calif., Dillman also addressed the issue of RFID implementation costs. "Depending on whom you listen to in the industry, people will say you have to get rid of all your legacy applications and buy all this equipment to house huge amounts of data," she said. But that isn't always necessary, she said, and also noted that since Wal-Mart announced its RFID mandate last year, the price of RFID tags declined by half.

One of the concerns about using RFID technology is that companies may wind up with more data than they're capable of making use of or maintaining. Wal-Mart will filter only the data it needs as needed, storing additional information in what Dillman described as a "black box" that sits in front of the company's existing systems. As that additional information--such as date codes for food items--becomes useful, it will be incorporated into Wal-Mart's enterprise applications. "So much more information is made available with RFID, and we're going to strip out the data we need today and store the remainder," Dillman says.

Dillman also addressed other Wal-Mart IT initiatives. For example, to support its more than 20 million daily customers worldwide, Wal-Mart embarked last year on a program called "Predictive Technology" to enable the company to forecast demand for items, instead of waiting to see what sells before replenishing stock. It also has become involved in UCCnet, a global online registry of product information that manufacturers and retailers use to improve electronic-data sharing for ordering, billing, and inventory management. "We have 450 suppliers live on data synchronization with us and 2,300 have signed up," Dillman said. "Our goal is to get all on board."