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Monday, September 13, 2004

Wal-Mart's CIO talks about the potential for RFID to revolutionize the retailer's "take-care-of-the-customer" processes via Informationweek

Wal-Mart Stores Inc. CIO Linda Dillman presides over 2,500 IT projects this year alone, which, even when combined add up to less than 1% of Wal-Mart's annual revenue. (Wal-Mart reported revenue of approximately $256.3 billion in its most recent fiscal year, ended Jan 31, 2004.) Of these initiatives, Dillman says the much talked-about radio-frequency identification project, though significant in terms of cost, isn't the most expensive thing the company has going on, not "by a long shot." In response to a question - are people making too much about RFID, the walmart CIO has this to say,"Yes. Our RFID team, until about three months ago, was five people. We almost doubled Simon Langford's team by adding four people. [Langford is Wal-Mart's global RFID strategy manager.]". She says that the widley held belief that by deploying RFID technologies, Walmart can save seven billion every year by deploying RFID technology - this is equivalent to Walmart's annual profits amazed her.So what is the Walmart mandate to suppliers - she explains this as,"The mandate for our top 100 suppliers (U.S. companies) in November (2003) was to evaluate their products to determine what made sense to tag, and come back to us by February (2004) with their merchandise-tagging plan. It took us a little longer to get through all tagging plans. Some suppliers will tag 100% of their product, and others 2%. In aggregate, the total volume will be a little more than 60% going through those facilities in January. It's three distribution centers--less than 3% of our distribution centers; and 150 stores, less than 5% of our stores and clubs. That felt like the correct amount to really give suppliers some incentive to review their organizations". Like in any other project,she says,"With RFID, the biggest challenge is communication--trying to keep our suppliers less confused based on whose article they read last. You have no idea how much time that consumes. They're calling every week, nearly every day. I spend a lot of time talking with suppliers". If Linda and her team pulls this by early 2005 as planned, this would be counted as the biggest accomplishment in recent times in the business world.
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