October 17, 2005


Wal-Mart has given out a status update on its RFID project.

Researchers at the University of Arkansas found a 16 percent reduction in out-of-stocks. Additionally, the study also showed that out-of-stock items with EPC (Electronic Product Code) tags were replenished three times faster than comparable items using standard barcode technology. Equally important, Wal-Mart experienced a meaningful reduction in manual orders resulting in a reduction of excess inventory.

“This is no longer a take-it-on-faith initiative,” said Linda Dillman, executive vice president and CIO for Wal-Mart. “This study provides conclusive evidence that EPCs increase how often we put products in the hands of customers who want to buy them, making it a win for shoppers, suppliers and retailers.”

The 29-week study analyzed out-of-stock merchandise at 12 pilot stores equipped with RFID technology and 12 control stores without the technology.

In addition, Target and Wal-Mart are sharing.

Target and Wal-Mart, two of the largest retailers in the United States, are sharing Electronic Product Code (EPC) data with 13 manufacturers as part of a pilot. The data is being transmitted in a standardized format via an Internet-based electronic data interchange called applicability statement 2 (AS2). The manufacturers have requested anonymity, but they include some of the largest consumer packaged goods (CPG) manufacturers supplying Wal-Mart and Target.

UPDATE: Here's an article (and another) about the University of Arkansas RFID Research Laboratory.

Posted by Kevin at 9:11 AM

September 20, 2005

Without a Mandate

What if Wal-Mart hadn't mandated RFID? Would companies be persuing the technology? Stores.org says no:

During a roundtable discussion of RFID at AMR Research’s Spring Conference, analysts took an informal poll of the 40 participants seated around the table. The assemblage, representing a cross section of retailers, CPG players and high-tech electronics manufacturers, was asked to indicate if their companies would be exploring RFID were it not for the Wal-Mart mandate.

Only three of the 40 people raised their hands.

Posted by Kevin at 9:28 AM

April 20, 2005


Here's an interesting little tidbit about the University of Arkansas studying Wal-Mart's deployment of RFID. From the RFID Journal:

Apr. 18, 2005�Research underway at Wal-Mart stores by the University of Arkansas may soon provide insight into how much impact RFID deployments may have in decreasing retail out-of-stocks.

"This is a major, major project across a large number of stores, for a long period, with data collected very frequently and across all products," says Bill Hardgrave, an associate professor and the executive director of the Information Technology Research Institute at the Sam M. Walton College of Business, University of Arkansas, in Fayetteville, not far from Wal-Mart's headquarters in Bentonville. "By the midsummer we should have some preliminary insights," he says.

Reducing out-of-stocks�a problem that impacts retailers and their suppliers around the world at an estimated rate of around 8 percent of items�has long been touted as one of the key benefits and driving forces behind deploying RFID in the retail supply chain. But the claim has largely been theoretical because of the limited deployment of radio frequency identification, the multiple causes of out-of-stocks and the multiple reactions that consumers have when a product they are looking to buy is unavailable.

"Reducing out-of-stocks or improving product availability is probably the single biggest area of potential consumer benefit from the use of RFID EPC," says Milan Turk, the director of global customer e-business at Procter & Gamble, a founding member of the Auto-ID Center and a supplier to Wal-Mart. "We need to use pilot activity to understand and validate how it works and how big the benefit is."

Posted by Bob at 1:12 AM

March 16, 2005

Dealing with RFID

How three companies tried to meet the January deadline for RFID, with a frank admission:

Matthews admits the costs of RFID are now greater than the benefits to his company. Pacific Cycle hopes to get a better view of the supply chain from manufacturing all the way through to the display space at stores. But "as we get into Generation 2 [technology] and costs come down, we are hoping that in another year-and-a-half to two years we will start to get a real return off of it," says Matthews.

Posted by Kevin at 11:40 AM

January 7, 2005

RFID = Too Much Data?

Our previous posts on RFID (1,2,3,4,5) failed to note the important role the Department of Defense is having on current RFID implementation:

Wal-Mart isn't the only organization with a January 2005 deadline. Although the U.S. Department of Defense has been working with RFID technology for more than a decade, the department has selected two pilot depots - one in California and another in Pennsylvania - to use the technology to hasten getting equipment, food and clothing to war theaters.

"Everybody's putting on those tags because of mandates by the Department of Defense and Wal-Mart," says Dr. Can Saygin, assistant professor of engineering management and systems engineering at UMR. "But companies don't know what to do with the data because the tags are going to tell you they are there every split second. If you start storing the data, you're going to need a lot of memory and capability to process the data and make sound decisions."

This is a serious problem, if you intend to store all that data permanently, which seems rather pointless to me.

Posted by Kevin at 11:09 AM

December 29, 2004

Company on Track Rolling Out RFID

Drudge had a lttle snippet that said Wal-Mart's suppliers weren't going to have RFID ready to go on Jan. 1st. He posted an article that refuted the technology roll-out was delayed significantly, but that no longer seems available. If I remember correctly, 65 out of the top 100 suppliers were ready not the 40 suggested below. The New York Times Article which appearantly caused the commotion is here:

A year and a half ago, Wal-Mart served notice that it expected its top 100 suppliers to be shipping goods to it with new radio tagging technology by Jan. 1, 2005.

While it may still be true, as the saying goes, that the best way to predict the future is to create it, Wal-Mart's experience so far has served as a reminder that creating the future is not all that easy.

With Jan. 1 just days away, the technology is not yet ready to meet the needs of either Wal-Mart or its suppliers. The tags, which are typically about the size of a credit card and contain an antenna and microchip encased in plastic, receive query signals from scanning devices called readers. Using the energy captured from those signals, they broadcast a snippet of code identifying the goods to which they are attached.

To date, most of Wal-Mart's suppliers have not figured out inexpensive ways to automate the printing and application of the tags. Although read rates are improving, no one who uses the technology has systems that can reliably read the information 100 percent of the time in factories, warehouses and stores; Wal-Mart said the rate was around 60 percent in its stores.

The rest of the article is in the extended entry.

Nor is the data currently integrated well enough with other technology to initiate changes in manufacturing or shipping schedules that could actually save the large sums of money that would make the investment worthwhile.

"The progress has been much slower than many people anticipated, and in some cases it's stalled," said Andrew Macey, vice president of the Sapient Corporation, a technology consulting firm in Cambridge, Mass.

Wal-Mart's official position is that it is working closely with suppliers, meeting its goals and learning valuable lessons that will pay off as the technology continues to roll out. But analysts who regularly survey major consumer goods companies said that most participants were cooperating with Wal-Mart out of fear of offending the retailer and were, as much as possible, putting off investments in the technology.

"The big manufacturing companies have advocates for the technology who are very positive, but the people on the floor who are implementing it are much more negative," Kara Romanow, an analyst at AMR Research, said.

Wal-Mart's goal was to wring billions of dollars from the supply chain by using the tags to keep shelves filled with whatever consumers were buying, cut back on shipments of other goods and combat theft.

The mandate was soon defined in narrower, more practical terms as supplying tagged cartons and pallets, not individual items, to a limited number of stores through just three Texas distribution centers by the Jan. 1 deadline.

Wal-Mart said recently that more than 100 suppliers would be tagging bulk shipments to the three Texas centers next month. But only 40 will be tagging everything they send. Of the remainder, two have been so tied up in a complete overhaul of their entire information technology infrastructure that they have put off attempting to introduce radio tagging. Some suppliers will be tagging as little as 2 percent of the goods going to the centers.

"We think the average supplier will be tagging about 65 percent of the volume they ship to the three centers," Linda Dillman, the chief information officer of Wal-Mart, said.

AMR, the research firm, said it had found that companies were investing $1 million to $3 million to comply with Wal-Mart's program, far less than the $13 million to $23 million that AMR had estimated in August would be needed for fully integrated systems that generated useful data.

Some companies delayed getting started for so long that they are now having trouble getting tags, according to the analysts and Wal-Mart. That problem is expected to recede next year as tag manufacturers expand their production lines. An important stimulant to that came last week, when a next-generation standard for tags and readers was ratified by EPCglobal, a nonprofit industry group. Heavyweights like Texas Instruments and Philips that had not made the first-generation tags plan to enter the market with the newer technology.

Although the progress has been slow, it has an air of inevitability. Radio tagging, known as RFID (for radio frequency identification), has been spreading through the economy for decades in applications like automated toll collection, tracking tags for animals and wireless cards controlling access to buildings.

But the technology was not widely publicized until Wal-Mart announced its deadline. Subsequent decisions by other merchants like Target, Albertsons, and Best Buy to push for radio tagging made it unmistakable which way the wind was blowing, at least among retailers.

The movement toward radio tags on consumer products gathered momentum when the Defense Department also set a Jan. 1, 2005, deadline for its major suppliers of a broad range of general merchandise and endorsed the tag and scanner standards being developed by a consortium of retailers and major suppliers like Procter & Gamble and Hewlett-Packard.

In addition, drug companies are expanding pilot projects of applying radio tags to pharmaceutical shipments. The Food and Drug Administration has set 2007 as its goal for general use of the technology. Separately, Boeing and Airbus are working together on standards for tagging the 5,000 or so aircraft parts that are most frequently handled by airline maintenance crews.

Wal-Mart and other retailers, and many manufacturers, are excited about the technology because the tags can store more information than bar codes, and large numbers of them can be scanned at one time. In addition to its top 100 suppliers, Wal-Mart is working with 38 others that have volunteered to be in the first wave of vendors complying with its mandate.

But the pilot testing this year has offered evidence that, before most businesses can justify big investments in the technology, its costs must fall sharply and the scanners must be able to read tags faster and in more varied conditions. To drive down costs, manufacturers want the recently adopted American standards to be made compatible with those being developed elsewhere.

Still, if the size of the challenge became apparent in 2004, so were the ways in which it could be tackled. Wal-Mart and others say that, in 2005, not only will tagging be expanded, but there will also be a sharp increase in the testing of software and business strategies that use the data captured from the tags.

"Companies understand what RFID can do," said Marco Ziegler, a partner at Accenture. "Now, they will find more opportunities to make it pay."

Posted by Bob at 3:23 PM

November 14, 2004

Wal-Mart Gift Registry Kiosk's Offer Access to the Internet's Operation Dear Abby

*Updated 3x*

However one may personally feel about the U.S. led war in Iraq, for those not already aware of it and whom are inclined to do so, anyone may use Operation Dear Abby to send an e-mail to *AnyServiceMember* (i.e., generally speaking) of each of the five branches of the U.S. military (one branch at a time, depending on which one you may select) and, as I understand it anyway, whether they may be serving in Iraq or elsewhere, including here within the U.S.A. and, also includes those whom have been injured and hospitalized of course (note that message text is limited to only 1000 characters, including spaces).

What Does this Have to do with WalMart, You Ask?

Due to an associates suggestion about whether the company could help out in making Operation Dear Abby accessible to those whom may lack Internet access, in rather short order Wal-Mart made:

[...] it possible for customers to access operationdearabby.net through the gift registry kiosk. In its first seven days it was available, 123,467 messages had been sent through the gift registry.


Read about it in full via the Wal-Mart Foundation Website, here.

For additional information concerning Operation Dear Abby, read the following items:

What More Can I Do to Support Our Troops?

By the way and, most importantly, if you find yourself wondering what *more* you could do along these same or, even better, other lines in supporting our troops and their families, click here for additional information.

In addition, The Art of the Blog has posted a blog post with an ever growing and updated compilation of links to all sorts of resources they have come across from one place or another, here [via Verns blog, here].

In fact I particularly like the link for the Website set up for people have a way to Send Pizza to our Troops (yet while I don't mean to give into cynical doubts at all, am just hoping it is the real deal and they are making good on delivering every time to the regions they state our troops are currently be served via their arrangements: i.e., certain areas of the Gulf and Middle East).

Had originally come across Operation Dear Abby earlier today when I paid a visit to Crickets blog. Her blog post (here) on the subject has additional insights concerning the program in general. [Thanks Cricket!]

*Note*: added link to AARP Magazine Mail Call article; added link to *recent* Houston Chronicle Dear Abby column; expanded the resource links portion concerning what more people can do ..., which is now under the heading of What More Can I Do to Support Our Troops?: last updated on Monday, November 15, 2004 at 2:59 AM [EST].

Posted by Morgan at 10:05 PM

November 13, 2004

WM Return Policy Upsets Deadbeat Shopper

If you've written a bad check at Wal-Mart, do not expect to be able to return merchandise. Donna Talarico became irate and embarrassed when WM wouldn't accept a smelly coat return because she floated a bad check in 1997:

I headed off to my nearest Wal-Mart, 40 minutes from my rural home. After waiting patiently in the customer service line, I joked, �Bet you can guess why I am here from the stench!� The woman responded, �My dear, eew, what is that?� and made another woman smell it too. She asked for my ID, proceeded with the return procedure and then gazed up at me. �I�m sorry, ma�am, we cannot take this back. You have a bad check with Wal-Mart, you have to call this customer service number.�

This was a huge embarrassment. In a day of debit cards, I have not written checks in years for in-store purchases. I did not remember having a bounced check at Wal-Mart. At this point, getting the $10.88 back was not important. I felt like they were making me out to be some scumbag looking to get money. It�s not like I was doing something illegal, like stealing a DVD player and then trying to get store credit. For cripes sake, they had a stinky coat in their hands they smelled with their own snouts. I paid money for a product I was not going to use, and had a right to get it back. I told them to keep it, or donate it to someone. Can you believe they would not even let me GIVE it back? She said I owed Wal-Mart money, I couldn�t return an item, and handed me back the coat. I threw it in the trashcan in the customer service department to prove a point- I did not care about the money; I just wanted rid of coat, and figured there was something else I could buy with the measly $10.88. They shook their heads, probably thought I was being difficult. But, I wasn�t going to keep the �stinkin� thing.

On the way home, I called the customer service line to inquire- closed for the weekend. I did call this morning, Monday, and found that I had a bounced check in 1997- when I was a sophomore in college, my first year in my own apartment, and with my own checkbook. Ooops. I was eighteen and made a mistake. The amount? About $20.00. I am sure I was charged a fee from my bank at the time, and almost a decade later, I am sure that $20.00 was written off as a loss for the Waltons. The past came back to haunt me- one bounced check at a discount chain eight years ago. I am not a teenager anymore, but a young professional with a career, a house, and the means to buy a real leather coat.

She thinks WM is greedy because she wrote a bad check!

Posted by Kevin at 2:01 PM

October 29, 2004

RFID to Sam's Club & Consumers

The future is already here:

Wal-Mart Stores Inc. is extending radio-frequency identification to its chain of Sam's Club outlets, a move that could put RFID tags in the hands of consumers.

This fall, RFID will be put to use in a Sam's Club store at the southwest corner of Highway 121 and Ohio Drive in Plano, Texas. Like other club outlet chains, Sam's Club sells much of its goods in bulk--in cases, for example--so customers can take advantage of volume discounts. That means there's a good chance customers will fill their shopping carts with RFID-tagged products....

Meanwhile, Wal-Mart's use of RFID in its flagship stores continues. By January, Wal-Mart says it will expand RFID deployments from one to three distribution centers in Texas and increase the number of participating stores from seven to more than 130. Most will be located in northern Texas, the remainder in south-central Oklahoma.

Posted by Kevin at 9:53 AM