Retail Show Attendees Hear RFID Updates From CIOs

Wal-Mart's Dillman says 57 out of 100 suppliers due to implement RFID this month are shipping tagged cases and pallets.
Retailers from around the world packed the opening session at the National Retail Federation trade show in New York on Monday to hear CIOs Linda Dillman of Wal-Mart, Zygmunt Mierdorf of Metro, and Colin Cobain of Tesco give conference goers an updated look into their strategies for implementing radio-frequency identification technology. The executives emphasized that RFID is just an enabling technology, and companies must update their business processes to take full advantage of it.

RFID is already in use in 104 Wal-Mart stores, 36 Sam's Clubs, and three distribution centers, Dillman said. Wal-Mart has installed more than 14,000 pieces of hardware and run 230 miles of cable. Halfway into this month's deadline, 57 out of the 100 suppliers due to implement RFID are shipping tagged cases and pallets. So far this month, Wal-Mart has read 7,161 tagged pallets and 210,390 tagged cases and has recorded 1.5 million electronic product code reads.

On the conveyers in the distribution centers, the retailer has achieved the ability to read 95% of the cases. At the end of the distribution process where the cartons are broken down and thrown into the trash compactor, Wal-Mart is achieving 98% read rates. Reading all cases on a fully loaded pallet remains the biggest challenge at 66%.

The deployment hasn't been without its hiccups. Wal-Mart learned early in its pilot projects that one RFID technology vendor's reader was issuing a sleep command to another vendor's tags, which stopped without warning. Wal-Mart also found a dead spot in the delivery process where it couldn't track a key supplier's cases moving through the supply chain. "There were two days we couldn't account for between their shipment and arrival at our distribution center," Dillman said. "We also discovered on a Saturday afternoon that one out of every 12 out-of-stock items on a shelf never made it to a pick list to get replenished that day."

Wal-Mart will continue to work on RFID processes as the company has only scratched the surface, Dillman said. Some of the 200 suppliers scheduled to go live in January 2006 are already up and running, she said, because they didn't want to wait.

Cobain took the stage next to demonstrate Tesco's RFID internal deployment. He stressed that the U.K. company is working with suppliers to perfect internal processes and standardize on RFID hardware. The company is tagging individual high-value products that are prone to theft and loss in the stores. The implementation in 14 stores and one distribution center has increased visibility for goods going from the distribution center to the stores. A demonstration during the presentation took a misstep when a third pallet run through RFID readers didn't trigger a green light, after the first two went through without a hitch.

Metro's Mierdorf provided a demonstration through a live videoconference feed from Metro's RFID Innovation Center in Neuss-Norf, Germany, which opened in July. Simulating a garment sorter in the distribution center, an employee demonstrated how an RFID-tag-enabled hanging-garment sorter can automate the route of between 4,000 and 8,000 garments every hour, versus 150 pieces manually. Replicating a retail store, the employee showed how RFID tags trigger information displayed on a screen as she entered a dressing room, and how the unique identification number on the article of clothing is used to display to customers related items and accessories on a wall monitor.

The employee also showed how it's possible to use an RFID tag with a point-of-sale platform to call up an item on a register, then remove the tag before the customer leaves the store. Metro's vision is to deploy RFID throughout the supply chain, from manufacturing to the consumer, Mierdorf said.

All three CIOs said their visions of using RFID to improve the customer experience and make retailers more efficient won't be realized overnight. "RFID is enabling change," Tesco's Cobain said. "It's enabling us to make it better for customers by improving product availability and [allowing] staff to spend more time helping customers."

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