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Thursday, March 17, 2005

Walmart RFID Mandate -Status Not Encouraging!!

Wal-Mart mandated that by January 2005 its top 100 suppliers must apply passive RFID tags based on EPC-global standards to cases and pallets headed toward three specific Distribution Centers (DCs) in Texas. Virtually all manufacturers of consumer goods will eventually be impacted by this because Wal-Mart’s moves in RFID are being copied by other retailers. ARC Research’s Steve Banker reports based on discussions with companies that were actively investing in EPC (Electronic Product Code) RFID that public reporting on the status of Wal-Mart’s RFID efforts has been highly misleading. The impression that all Wal-Mart SKUs bound for three of the retailer’s Texas Distribution Centers from the top 100 suppliers will be RFID tagged starting January 1st is incorrect There had been negotiations between Wal-Mart’s top 100 suppliers and the retail behemoth and WalMart has shown more flexibility than many anticipated.
Different suppliers negotiated a wide range of agreements. The largest tranche of supply would cover 700 Stock Keeping Units (SKUs) to start with and even very large companies,will be shipping less than a dozen. Steve concludes,"The focus right now is on Wal-Mart and the question people are asking is, "What is the status of your effort?"The more interesting questions should be directed at Wal-Mart’s suppliers.Those questions are, "How successful were you in your negotiations with Wal-Mart? What does it take to do well in those negotiations?" My Take: This again proves the idea that it would be very difficult to get things done based on stiff deadlines. I am a little suprised that this large scale non-adherence to deadline did not get that much attention compared to the frenzy in the media in the run up to the implementation. This is disappointing story for RFID tag manufacturers, readers and solution providers who were expecting huge opportunties to encash both during the course of implementation and planned additional rollouts and rollouts in other retailes , expected to push for RFID following Walmart's footsteps.

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