Wal-Mart Plans Next Phase Of RFID

Retailer expects to add more suppliers and distribution centers as well as expand use of the tracking technology overseas.
With the deadline for Wal-Mart Stores Inc.'s 100 largest suppliers to implement radio-frequency identification technology just five months away, the retailer is thinking ahead to the next stages of its RFID strategy.

Speaking Tuesday at a pharmaceutical industry supply chain conference in Washington, D.C., Simon Langford, global RFID strategy manager in Wal-Mart's information-systems division, said the retailer's largest 100 suppliers remain on track to have RFID systems in place to track products at the carton and pallet level starting Jan. 1.

But Langford added that another 37 small and midsize companies, including Beaver Street Fisheries and BP Amoco's Castrol North America Inc. division, that recognize RFID's potential benefits will also begin using the technology to track goods shipped to Wal-Mart at the start of the year.

Wal-Mart will expand its efforts to its next 200 largest suppliers by Jan. 1, 2006, Langford said, joined by a number of additional smaller companies that want to begin using RFID by then. The company will shortly announce to those suppliers just which Wal-Mart distribution centers and stores will be involved in the next stage of RFID deployment; he indicated they could be in the Southeast and Midwest. Use of RFID in Wal-Mart's international operations will also begin after 2005, he said.

RFID technology continues to improve and become more affordable, according to Langford, who noted that the cost of RFID readers and tags has dropped by half in the last year. "So we're seeing the barriers [to adoption] come down." But he said the price of RFID tags--most likely printed labels rather than silicon--will have to drop below 1 cent before tagging of individual items on shelves becomes feasible. He indicated that was likely 10 to 15 years off.

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