September 29, 2003
(Computerworld)
UPS currently uses bar code scanning systems to track the 13 million packages it delivers on an average day. But CEO Mike Eskew last week said he views the adoption of radio frequency identification (RFID) technology by the company as being close to inevitable.
However, Eskew didn't put a time frame on when UPS will embrace RFID tags, which proponents say can store more detailed information about items that are being tracked than conventional bar codes can.
In July, UPS officials said the company was evaluating whether RFID technology could help make its supply chain management service more efficient . But at last week's technology summit, Eskew wouldn't commit to any specific plans. Usage of the technology by UPS "will happen when it can be embedded in the ink that creates [shipping] labels," he said.
Eskew noted, though, that Wal-Mart Stores Inc.'s plan to require its top 100 suppliers to start using passive RFID tags on shipping pallets by 2005 could take the technology to the stage where it "reaches a critical mass" of users. Bentonville, Ark.-based Wal-Mart announced its embrace of RFID devices in June.
Eric Morley, director of supply chain operations at Best Buy Co. in Richfield, Minn., said at the UPS conference that the electronics retailer plans to launch an RFID test project in the second quarter of next year.
Morley added that although Wal-Mart wants to drive the price of RFID tags down to five cents each, the higher-margin electronic items Best Buy sells could support a per-device cost of 50 cents.