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Q&A: Sara Lee wrestles with RFID, looks for benefits

The company is taking a 'slap and ship' approach, for now

By Carol Sliwa
September 10, 2004 12:00 PM ET

Computerworld - Sara Lee Corp. is testing radio frequency identification (RFID) tags on some product cases and shipping pallets to meet a mandate that RFID technology be used on goods sent to Wal-Mart Stores Inc.'s Dallas-area distribution centers starting in January. Ray Hagedorn, who works in Cincinnati as vice president of business solutions for the IT department in the Sara Lee Foods division, recently spoke with Computerworld's Carol Sliwa about what Sara Lee has learned about RFID. Excerpts follow:
Which applications will make use of the data that you gather through RFID? We're a major supplier [to Wal-Mart], and we had to focus on January. If we got too caught up in breaking down the processes and everything else like that at this particular juncture, we were going to waste a lot of time prematurely. So we said, "Let's narrow our focus. Let's learn about the technology."
Are you mostly taking a "slap and ship" approach now? Absolutely. And if everybody would be honest with you, that's what they're doing.
How much did you spend on the RFID tags you're using? It was 35 cents a tag. As we look at our newer models, it's going to be south of 35. I'm not sure exactly what it is yet.
Are tags being read at the accuracy rates that Wal-Mart expects? Yes. At a case-by-case basis, as I go down through our process, I validate that case. A tag is on it. I encode the tag and then I immediately validate that, and I capture those statistics. If it doesn't read, I can pull that out and put another tag on until we get it read. That gives us our 100%.
It sounds time-consuming. Oh, absolutely.
Wasn't RFID supposed to automate the process? It's not ready for high volume.
What advice would you give your peers? It's early. Don't make huge investments. Get started, pick your point, learn. Pick a partner in your business [operations], because you can't do it [all] as technologists. We have our logistics group very involved with us every step of the way. In fact, we share co-management of [the RFID project].

Have you done any integration? Oh absolutely. We have integration going backward. We're just not using the data. We don't know what to do with the data yet.
What are some problems with RFID technology? The tags, without question. From the middleware side, this is still early in its evolution. There are many vendors out there right now that have middleware that is integrated into their standard offering of product, and they also have some things



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