Target Joins The RFID Race

Target Corp. is joining the ranks of Wal-Mart Stores Inc. and the Department of Defense in requiring suppliers to use radio-frequency identification tags on every case and pallet that is shipped to them.

The retailer is asking its top suppliers to begin using RFID for shipments heading to several distribution facilities by spring 2005, and asking all suppliers to do so by spring 2007, according to RFID Journal, an industry publication.

Target did not return calls regarding its RFID mandate.

Target's request doesn't come out of the blue; the retailer has been an active member of EPC Global Inc. and the Auto-ID Center for some time. It also has been conducting trials with several of its larger suppliers, according to Sue Hutchinson, product manager with EPC Global, a joint venture between EAN International and the Uniform Code Council that's working to define RFID standards. The Auto-ID Center, a research group sponsored by MIT, handed over RFID standards development to EPC Global last year.

"It's very exciting to see that Target was finally to the point of being comfortable enough internally to put out guidance to their suppliers," Hutchinson says. She adds that Target's mandate is similar to the guidance that Wal-Mart, the Defense Department, and German retailer Metro AG have given all their suppliers. "That's good, because everyone is working to make sure, wherever humanly possible, that guidance given to manufacturers is similar so that we aren't making them nuts with totally different requirements."

Bill Allen, marketing communications manager for Texas Instruments RFID Systems at Texas Instruments, says TI "interfaced with some of Target's suppliers that have mentioned a need to comply," but he declined to elaborate on any specifics.

Like the others, Target is asking suppliers to support the EPC Class 0 and Class 1 protocols, with plans to move to the EPC Class 1 second-generation protocol when products become available later this year, Hutchinson says.

Target's mandate should further boost RFID as a way to track goods throughout supply chains. The company is one of the largest U.S. retailers, with $48.2 billion in annual revenue. The Target umbrella includes Target, Mervyn's, and Marshall Field's stores.