The trial is being conducted with a handful of suppliers and EPCglobal Inc., the standards group spearheading RFID adoption. "We're just about to enter the next phase where those suppliers will push their information to us as they ship the products," Simon Langford, RFID global manager at Wal-Mart, said. "With this process, we will have the capability to see product on the way to us."
There are several changes in the works. The plan is for RFID tags to eventually trigger advanced ship notices (ASNs) through the EPC Information Service (EPCIS) network each time a supplier ships product out the receiving doc door. But that process is about a year away, Langford said. Suppliers can access the information now by logging onto Retail Link, Wal-Mart's Web-based software that lets buyers check inventory. The information is available within 30 minutes after a RFID tag has passed by a reader.
In 2005, Wal-Mart read more than 80 million electronic product codes (EPC), a number designed to uniquely identify a specific item in the supply chain, as it continues to expand RFID efforts from Arkansas, Louisiana and Texas into other states. The data is collected from RFID tags to automate the reorder process as products on shelves and storerooms are sold.
Expansion is always on Wal-Mart's agenda. This year, Wal-Mart will begin to use handheld RFID scanners in back rooms to identify product it needs to restock shelves. Earlier this year, a study by the University of Arkansas found the retailer reduced out-of-stocks by 16 percent through the use of RFID tags on cases and pallets of goods from suppliers.
Employees will soon have automated notifications alerting them when promotional items and cardboard displays filled with Gillette razor blades or Johnson & Johnson baby powder need to move onto the store floor from the stockroom, for example. Langford said tagging displays is a way for suppliers to step into RFID. "If the displays don't make it onto the floor in time, Wal-Mart has not maximized sales and is carrying too much stock at the end of the promotion," Langford said.
RFID to monitor cold storage is on the agenda. Perishable products from fruits to vegetables to meats to dairy are required to maintain a specific temperature while in transit from farms to retail distribution centers and stores. Vendors, such as Alien Technologies Inc., have been working on RFID applications that monitor temperature throughout the supply chain. "There is nothing out there that is exactly right for us to pilot," Langford said. "We would like to test something this year" in the "ultra high frequency (UHF) spectrum, so our infrastructure could read the sensor tags."
Then there is the move to Gen 2-compliant RFID tags. Texas Instruments Corp.'s Educational & Productivity Solutions business division, a supplier of educational products, became the first to affix EPC Gen 2-compliant RFID tags to cases and pallets of calculators headed to five Wal-Mart distribution centers. The announcement made earlier this month revealed that TI began shipping products with Gen 2 tags late last year.
Wal-Mart has more than 61,000 suppliers in the United States alone. About 20 percent contribute to 80 percent of its $285 billion in annual revenue last year. To put its RFID efforts into perspective, the retailer officially brought on about 130 suppliers in January 2005, added 200 this month and another 300 is scheduled to join in January 2007. By that time there will be 1,000 stores equipped to read and process RFID data, up from 500 stores today. "We will continue to move southeast across the United States," Langford said "We are in the planning stages with the United Kingdom and Canada."