Wal-Mart details its RFID journey

Computerworld - GRAPEVINE, Texas -- Retailer Wal-Mart Stores Inc. continues to build momentum around its radio frequency identification (RFID) tag initiatives, adding new uses for the supply chain technology and getting more suppliers and partners to comply with its RFID mandates.

Wal-Mart first went live with RFID in January 2005 after doing pilots at distribution centers in Dallas, said Carolyn Walton, vice president of information systems at Wal-Mart and a panel member at this week’s RFID World conference here.

At first, she said, Wal-Mart had more than 100 suppliers tagging products. It now has more than three times that number involved, feeding RFID-tagged goods to 500 Wal-Mart facilities through five distribution centers. The company expects the number of stores capable of handling RFID-tagged items to double to 1,000 by January 2007, with 600 suppliers employing the technology by then.

Walton noted that Wal-Mart has seen a return on investment -- even without any extensive process changes. Among the benefits: Out-of-stock items that are RFID-tagged are replenished three times faster than before, and the amount of out-of-stock items that have to be manually filled has been cut by 10%. “We see this a continual process in an effort to focus on bringing our customers what they want,” she said.

One of the ongoing projects in the proof-of-concept phase, which is still under way, involves adding sensor tags to perishable items such as fruit. With a special tag, Wal-Mart can track just how long a crate of bananas has been in transit and can ensure that it’s sold when the fruit is ripe. That means the company does not have to discount the fruit as often or toss it out altogether.

Another project Wal-Mart intends to pilot this year involves boosting the efficiency of unloading boxes from trucks. Each Wal-Mart truck carries about 7,000 boxes that have to be organized and unpacked, a time-consuming task made more onerous by the fact that some items need to go right to store shelves. To address that issue, the company plans to equip associates with wearable devices that will detect a high-priority box of goods that can be unloaded immediately.

Collaboration with the partners using RFID data is key, especially with promotions that rely on time-sensitive goods, said Walton. Wal-Mart can look at the sales of a given item, store by store, and determine whether something didn’t sell well because it wasn’t on the floor on the best day of the week or timed with an advertising campaign. That makes it incumbent on Wal-Mart to sit down with its partners and plan how best to move products, she said.