Analysts: Wal-Mart RFID deadline could be tough to meet

Computerworld - The majority of Wal-Mart Stores Inc.'s top 100 suppliers are expected to have RFID projects in the works by January. But whether they will be in full compliance with the requirements Wal-Mart laid out for them is another matter.
Industry analysts and consultants predict that Wal-Mart's top suppliers will face difficulties meeting the retailer's January RFID deadline because of the immaturity of the technology and the challenge in devising a near-term business case.
Wal-Mart "challenged" suppliers to tag 100% of the product cases and pallets they ship to its three Dallas/Fort Worth-area distribution centers with radio frequency identification tags by January 2005, according to Gus Whitcomb, a spokesman for the Bentonville, Ark.-based retailer.
"We asked them to come back and tell us what was doable," Whitcomb said. "Many will be tagging 100%."
But Wal-Mart is also requiring suppliers to ensure 100% readability of the tags, Whitcomb said. That directive will pose additional challenges given the current state of the technology for tags and readers, several analysts said.
"Nobody has figured out how to bend the laws of physics. So especially those dealing with liquids and metals are having real problems," said Kara Romanow, an analyst at AMR Research Inc. in Boston. She predicted that "very few" of Wal-Mart's top 100 suppliers will make the January deadline.
Jonathan Loretto, global technology lead for RFID at Cap Gemini Ernst & Young, said getting 100% reliability "is a bit of an art form." He said that multiband tags and readers that help users get accurate read rates with liquids and metals are now moving to the trial stage and that the technology will slowly move toward the goal of 100% reliability.
"The biggest challenge is how do I make money out of this, because the technology will get sorted out," said Loretto. "It's a matter of time. If you have the wrong strategy and implement [RFID] wrongly, it doesn't matter if the right technology comes along, because you will have effectively crippled your business, and that is harder to undo."
Loretto predicted that only about 25% of Wal-Mart's top 100 suppliers will be in full compliance with Wal-Mart's January directive to ship all pallets and cases to its distribution centers with 100% readability of the tags. But he said he expects that 65% will be in a state of partial compliance by the deadline.
Jeff Woods, an analyst at Stamford, Conn.-based Gartner Inc., said some companies are still figuring out what the requirements are. He said they're uncertain what type of data they will