Manufacturing News

Wal-Mart shows flexibility with RFID mandate

December 3, 2004
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Digital information is encoded on thin, ultra-high frequency (UHF) tags that are embedded in smart label material. Source: Weber Marking Systems.
The public discussion of the status of the Wal-Mart RFID project has been misleading, concludes New England-based ARC Advisory Group after surveying 24 companies that were actively investing in the EPC RFID (Electronic Product Code Radio Frequency Identification) project.

According to Steve Banker, service director for supply chain management at ARC, "The impression conveyed to the public by many pundits is that all Wal-Mart SKUs bound for three of the retailer's Texas distribution centers from the top 100 suppliers will be RFID tagged starting January 1. This is incorrect." In fact, Banker states, in negotiations with its top 100 suppliers, "Wal-Mart has shown more flexibility than many anticipated."

Wal-Mart has mandated that by January 2005 its top 100 suppliers must apply passive RFID tags based on EPC-global standards to cases and pallets headed toward three specific distribution centers (DCs) in Texas.

Wal-Mart suppliers negotiated a wide range of agreements, says ARC. One large supplier will be shipping more than 700 SKUs starting January 1. Many other companies, even very large companies, will be shipping less than a dozen, according to the study. Some top suppliers began shipping a limited number of SKUs to Wal-Mart in 2004. Once companies start shipping, they are expected to keep shipping those SKUs.

According to ARC, even if a supplier in initial negotiations was able to commit to only a small number of SKUs, that supplier knows that in upcoming meetings Wal-Mart will press for an expanded list of SKUs for tagging.

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