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NYT: Wal-Mart Slows RFID Plans, Suppliers Resist
securitas writes "The New York Times' Barnaby Feder reports that Wal-Mart has scaled back its plans to deploy RFID tags because the majority of its top 100 suppliers will not be able to meet the Jan. 1, 2005 deadline that the retailer demanded. Suppliers are resisting Wal-Mart's RFID demand for a variety of reasons according to AMR Research. Only 40 suppliers will meet the deadline, with two suppliers 'so tied up in a complete overhaul of their entire information technology infrastructure that they have put off attempting to introduce radio tagging.' A more pragmatic reason for the delay is that 'no one who uses the technology has systems that can reliably read the information 100 percent of the time in factories, warehouses and stores; Wal-Mart said the rate was around 60 percent in its stores.' It's hard to make the case that RFID will help track inventory when you can't reliably find 40% of it."
The title makes it sound as though Wal-Mart's suppliers are resisting the slowing of the introduction of RFID, while the truth is quite the reverse - that the slow-down is happening because of supplier resistence, not despite it.
It's official. Most of you are morons.
as a % out of this situation in profit and capital
Customer
Wallmart
Distributer
Manufacturer
then perhaps you can understand the remaining parties reluctance to make the expenditure
Given that Wal-Mart has been bullying its suppliers since donkey's years, it's high time they got a taste of their own medicine. However, rumour has it that the Pedigree has pawed the line in this initiative. Only, they're calling it Arf-ID.
cough, sorry
I have an RFID card I leave in my wallet that allows me access to parts of my work building. much better than swipe cards.
I'd love them to be used in shops too. if you could just walk round a shop putting things in a bag, put the bag on a pay station, insert your credit card, type your PIN, and leave... I think that would be great, and a real case of technology actually making life better.
and the only people (*cough* luddites *cough*) I want to hear privacy complaints from are the people who are posting from an internet cafe, wearing a disguise, putting a tinfoil blanket over themselves and the computer, and then paying with cash they've cleaned any DNA from. and you guys probably don't even go to shops ever since they introduced the eeeeeevvvviiiilll of barcodes anyway.
I can only find what I'm looking for in Wal Mart about 60% of the time anyway, so really it all balances out in the long run...
Wise men say, "Forgiveness is divine, but never pay full price for late pizza."
Suppliers were due to have ability to tag at the pallet/case level. At current tag prices that's not to bad of a hit. However, the tags are the trivial part of an implementation. It's getting the data from the tags into your information infrastructure that will kill you. I've seen demos where pallets of case goods were trucked S-L-O-W-L-Y through an array of antennas and even at that rate one or more items on the manifest were not recognized. So, what do you do? 1) Check off each item visually? 2) Run around the warehouse looking for the missing items? or 3) Read the boxes with a barcode scanner? Bentonville, we have a problem.
Ask me about my vow of silence!
I like RFID in the same way I like barcodes. Both are amazing for certain applications (RFID kinda beats the pants off barcodes for most things, though it needs to be backed up by a barcode and a human readable identifier...)
Their usefulness, however, in my mind, does not preclude discussion of their drawbacks. Sure, there are people who are screaming BAN RFID OMG WTF but they're already the fringe and are being officially and unofficially ignored. Just because some fringies are mewling does not make the entire line of inquiry invalid.
I think it is a reasonable point to make in general with technology that once we feel that our assumptions in terms of civil life are being changed, we have to step up and say something.
What we call folk wisdom is often no more than a kind of expedient stupidity.-Edward Abbey
You say this, but you provide no proof or examples of the rampant abuse you so disdain. If you're going to make far reaching claims like this, don't expect people to take them to heart without facts backing it up.
/. so commonly fears. Most RFID generally has a range of a meter or two (at most.) How are they going to track you once you leave the store? It would be ludicrous (and legally impossible) to set up readers along public sidewalks and inside public buildings.
While I might concur that RFID has potential for abuse, I must say that I have been quite happy with it when I do use it (access cards etc.) I also personally believe that it is much harder and impractical to implement these "tracking" methods
-dave
http://millionnumbers.com/ - own the number of your dreams
I am currently working with one of the RFID companies that is "working" with walmart on the actual implementation of RFID. Let me tell you that there is no foreseable ROI in the near future. Currently at a cost of about 25 cents a tag, it is much too expensive to be worth it for anyone. The technology is in its infancy so there are so many problems we have encountered so far.
One of the problems is the tags. Not only do they cost so damn much, but they are also not very high quality. There's a feature called "locking" which allows you to set a number on the tag and not allow it to change, but when using this we have too high a failure rate to be effective (10-30% depending on the tag type). So we had to turn off the locking, meaning its much easier to change the unique number associated with the tags (which will be a problem when tags hit the retail sector) and now we only get around a 1-2% failure rate. But when doing high volumes, even this small percent is expensive to deal with.
Another is the hardware. Part of the tag writing problems we have seen may be due to the tags and/or the reader/writer units. But right now, some tags get created and written to with no problems, but when they go by a reader, the reader just does not see a number on that tag, meaning as i said before its either a bad tag or some sort of incompatibility/problem with the reader unit. Currently we are trying to get the tags applied cost effectively, but unfortunately its pretty much boiling down to using people to grab tags from a RFID printer and hand-apply everything.
We have also been having trouble verifying all the product on a pallet, and certainly cannot expect to read 100% of product 100% of time. Some product is easy to see, but depending on the density/material in the materials on the pallet, it can be very difficult to read many of the tags.
Software is another hinderance. While the company i have been working with has had its large share of problems in the last few months, they are getting better, but still are not perfect. And unless things work perfect, it can cause so many problems. One small chink in the software can make it inoperable (essentially crashing the software a-la Windows), but the software is slowly getting more and more stable.
The fact that Walmart madated this is certainly causing issues, especially for smaller companies and products that companies make almost no money on anyway. For us, we have a very expensive product so tagging at the case level is not too big a deal (it still has/will cost us millions of dollars to do), but just remember theres lots of companies that make almost no profit on the case level and that 25 cents for a tag eats pretty much all of their profits. RFID isn't going away, theres just too much potential. RFID can certainly work as a technology, as seen in the success of toll-tags like EZ-Pass and Smart-Tag. And many of these problems would have arisen anyway in the future, its just that the Walmart mandate basically caused the problems to happen faster.
I just went over costs with a local RFID vendor, and the costs are not as cheap as I was led to believe. Couple this with proxity challenged systems, and it's another solution looking for a problem the way I see it. Maybe later, but not now, thanks.
Sooner or later, RFID is going to be a reality in Walmart, with other retailers to follow. Why? Because Walmart is the 800 pound gorilla of the retail world. And what the gorilla wants, the gorilla gets. Its only a matter of time. Resistance is futile.
The lead-in for this story made it sound like suppliers are standing up to Walmart on philosophical grounds, when nothing could be further from the truth.
I want a new quote. One that won't spill. One that don't cost too much. Or come in a pill.
I don't know who picked out the equipment for the self-checkouts at Walmart, but it's gotta be the worst available. Mis-scans constantly, thinks stuff is not in the bag when it is, made for midgets. (I'm 6'5" and it's a major pain after bending over the 50th time to put a single jar of babyfood in the bag that's only two feet off the floor.) And nothing like standing in line for 10 minutes just to watch the person in front of you have to get the attendant over three times in a row just to get one item scanned.
:) ) at Krogers/Bakers grocery stores. The Kroger scanners ROCK! They work pretty much flawlessly. The bagger is at a more realistic height (rather than assuming that EVERYONE is in a wheelchair), and you don't stand in line for 10 minutes just to watch the person in front of you have to get the attendant over three times in a row just to get one item scanned.
Between either waiting in line for a "real" (attended) checkout lane (Which there are less and less of since cheap walmart is pushing everyone to the self-checkouts) and waiting in line for the crappy self-checkout to work, I am seriously attempting to avoid Walmart whenever I can lately. It's too big of a pain in the ass. It takes 2 minutes to get into the store, pick up the few items I need (I'm talking about man-type shopping, not female shopping where they stare at everything and take hours to pick up a few items), then stand 10 to 15 minutes just to pay for it.
I think that if it takes longer to pay for it than to find the item and walk to the checkout, it should be free. I don't have time to stand around because Walmart is too damn cheap to make it convenient to do business with them.
Compare to the elf-checkout (er, that should be Self-checkout
My company designs and sell equipment to the producers of corrugated and solid fiber packaging. We don't deal with the IT aspects of RFID. However, there are a number of implementation issues which are affecting this part of the supply chain.
Increasingly, recycled paper fibers are being used to make boxes in the U.S. Some of that is scraps or mistakes from the box plants, some is recovered material.
This stuff is dumped into a chemical bath to seperate the paper fibers, adhesives, inks, etc. then run through various filterations to make sure only the paper fibers are recovered. That's one big part of the problem. RFID tags aren't necessarily removed. They must be large enough that they won't slip through with the paper fiber. If they do go through, the paper will be messed up which can damage the machinery which works with it and also the tags might still be active.
Another issue is related to signal strength and resiliency. There's been work with conductive inks. The idea is to print an antenna pattern on the inside of a box to which the RFID tag is attached. This is supposed to help the tag have a greater detection range. However, regulations and technologies for using conductive ink are different than regular inks. Metallic inks are powdered metal suspended in a carrier. Those little pieces of metal aren't as easy to flush from printing machines as clay or organic-based colorants.
There are also stringent regulations concerning the manufacture of paper products used for foods and medicines. They cannot exceed very minute limits of metallic content. Little specs of metal can come from the automatic sharpening of rotary knives which happens during conversion from paper rolls to corrugated or solid fiber board. Imagine the problems which would happen from conductive inks...
I know that they are considered to be top-of-the-pops in logistics, but when you achieve 40% failures in stock maintenance and merchandise flow I wouldn't call that state of the art, I'd call that outright shoddy (even considering that accuracy _might_ get to 95% one day)
By calling up the psychic hotline (9$99 a minute) they probably achieve more accurate results..
(But then again, maybe it's just an engenious way to piss of their suppliers).
ich bin der musikant
mit taschenrechner in der hand
kraftwerk
This completely eliminates the advantage for the consumer, which is fast checkout without the hassles of going through a poorly trained human. At Kroger's, for instance, it is perfectly possible to get out of the store without any significant interventions. The few times I have ben to Wal*mart, I have never been able to get out without hassle. Not only do you have the normal thug at the door, but the atttendent seems much more willing to assume malice on the part of the consumer.
I assume that this assumption that most of the customers are thieves derives from the fact that Wal*Mart executives are theives. This would also likely mean that the executive presume tha the suppliers are thieves, which is why every item has to be tagged. The only thins that can be trusted are computers.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
So here we have an RFID implementation in a controlled environment - one in which everyone is babying the system along and trying to make things work.
If the system is this unreliable in the warehouses then imagine it in the consumer world (ie checking out a whole buggy of products at a time), where the complexity, volume, and general misuse will be amplified. Throw into that mix people actively trying to circumvent or sabotage the system, and things look pretty dismal.
Dan East
Better known as 318230.
It's hard to make the case that RFID will help track inventory when you can't reliably find 40% of it."
Sounds like Kmart to me.
When I was out Christmas shopping with my brother, he made sure his Canon EOS 1D was out of view before we locked his truck.
Walking across the parking lot, it occurred to me that people who are Christmas shopping quite often have gifts they bought locked in their cars. So all a thief needs to speed his holiday "shopping" is a RFID reader with a directional range extender antenna. Sit it in back seat, perhaps with an accomplice/operator, and cruise up and down the crowded parking lot, pretending to look for a parking space, while actually scanning all the cars. The guy in the back can read off what each car has, and when you find one with lots of pricey gifts, they can stop and break in, or mark it down for later robbery.
For that matter, if the thieves were of more the mugger variety, one guy could sit in a parked car near a mall entrance, and scan the people walking out, and contact the mugger via cell phone telling him who to target.
And I am sure that is just scratching the surface.
I'm actually an employee, and let me tell you that the inventory system in place is pure junk. Although I'm sure we'd all love a new wonderful technology to help take care of the current problem(and it is a problem for productivity and thus price of product), we're definately doing better than 60% right now, I'd say closer to 80%. But is that really good enough for the world's number one retailer? I, and every single one of my fellow employees and managers, don't think so.
---Excuse the bad English, I'm American---