RFID Issues Take Center Stage at NRF
The rollout of radio frequency identification (RFID) initiatives recently launched by Wal-Mart Stores Inc. has not gone as smoothly as the retailer would have liked. But the problems will not hamper the future of the program, company executives said during the Jan. 16–19 run of the National Retail Federation conference in New York.
Wal-Mart set Jan. 1 as the deadline for its top 100 accounts to equip inbound shipments with RFID labels that can be tracked by the retailer’s new system. The aim is to improve inventory tracking so store shelves can be replenished quickly.
Wal-Mart Chief Information Officer Linda Dillman, who spoke at the NRF conference with her counterparts from Metro AG in Germany and Tesco in the United Kingdom, said early testing had exploited flaws in the various systems being used. For example, one RFID reader by a certain vendor made another vendor’s labels inactive. There were cases when shipments could not be tracked, she said, noting that retailer is working to correct such problems.
At the conveyer belts, Wal-Mart workers armed with hand scanners have achieved a 95 percent success rate in reading tagged merchandise. Reading at the pallet level has been more difficult, with only 66 percent of pallets being read, Dillman said.
Wal-Mart officials had anticipated there would be problems reading shipments in certain instances, such as when trying to scan RFID tags near water. But they said they were at the tip of the iceberg in addressing obstacles.
Wal-Mart is going full steam ahead with the implementation and has set a new mandate asking its top 200 suppliers to be RFIDcompliant by January 2006. Dillman said some already are up and running. In addition, the retailer announced it will have close to 600 stores and 12 distribution centers RFID-ready.
Tesco officials said that before setting requirements for suppliers, the company will work on standardizing hardware. The company also said it is expanding RFID usage as a loss-prevention tool by tagging and tracking high-value products. Unlike other security tags, RFID chips can be integrated into packaging and are invisible.
Metro showed how it is using RFID to improve computer-integrated manufacturing systems by outfitting hanging garment sorters with tags. The sorter can route garments at a rate of up to 8,000 pieces per hour using RFID, compared with 150 pieces manually.
“RFID is enabling change,” Tesco’s Colin 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.”
A report released during the conference found that more than half of retail leaders polled favor the technology. About 20 percent of those surveyed said they already had RFID projects on the table.
—Robert McAllister
