Slashdot Mirror
Wal-Mart's Faltering RFID Initiative
itphobe writes "Baseline magazine has up an in-depth look at Wal-Mart's years-old RFID initiative. Things apparently haven't gone so well for the retail giant. 'The lack of any obvious concrete gains has raised questions as to whether Wal-Mart should delay or freeze its RFID plans. For now, however, Wal-Mart says it will stay the course ... By January 2006 the company hoped to have as many as 12 of its roughly 130 distribution centers fully outfitted with RFID. That effort stalled at just five distribution centers. Instead, the company is now focusing on implementing RFID in stores fed by those five distribution centers so it can gain a bigger window into its supply chain.' Overall the article focuses on the original intentions of the RFID project vs. their implementation. It also discusses several of the technical elements required to adapt RFID for the US juggernaut."
Having worked IT for JCPenney, we heard a lot about RFID. The concept behind RFID is the holy mantra of supply chain logistics IT staff - VISIBILITY!!!!! However bicycles are a perfect example of semi visible. Picture a pallet of these, all with little RFID tags here and there. Then the RFID reader squirts out a radio signal which bounces merrily around (Mathematica, do a graph of this one!). It might miss some bicycles and have trouble reading others. So POOF, there goes the validity of supply chain visibility.
And lets not even talk, much anyhow, about a pallet full of cans of soup. RFID visibility is not good amongst cans. If its supposed to always be on a visible side, how do you target the one in the middle? What about mis-stacking with RFIDS hidden? Besides cans provide an example of economics. I understand that Wal Mart pays something on the order of six cents per soup can. If RFID is ten cents. Do you want to "pay" more than a can of soup, 1/24 of your cost for visibility. Perhaps not when profits are measured to much smaller decimal points.
Good luck,
J