“We’re already seeing results,” declared Linda Dillman, Wal-Mart Stores’ executive chief information officer. “This technology has huge potential to help us all.” She cited the following statistics regarding the chain’s RFID efforts at three distribution centers in the Dallas area:
• 104 Wal-Mart stores
• 36 Sam’s club stores
• More than 14ꯠ pieces of hardware
• More than 23ꯠ tagged pallets
• More than 664ꯠ tagged cases received
One major plus Dillman noted: “There is ‘visibility’ within 30 minutes of movement,” she said, referring to the capability to track product. “We expect to have up to 600 stores and 12 distribution centers [RFID-enabled] by October 2005.”
Ian Robertson, Hewlett-Packard’s RFID program director, said the company, which first looked at RFID in 2002, found value with RFID even before retailer mandates were announced. “It’s important to understand your own operations,” he said. “Business operations skills are essential.” When HP first started its RFID program, read-rate errors were in excess of 30%. “Now our failure rate is below one percent,” he said. “And we have yet to not read a tag that we have successfully written.” This year, HP plans to move “RFID down into manufacturing. We’re happy with what we’ve seen in RFID.”
What about return-on-investment? Off-stage, even keynote speaker Mike O’Shea of Kimberly-Clark Corp., one of Wal-Mart’s Top 100, wondered about that. Director-corporate AutoID/RFID strategies & technology for K-C, O’Shea believes that ROI will come with critical mass, yet asks rhetorically, “Can [anyone] tell me what that volume is?”
With Gen 2 standards approved and manufacturers responding, the consensus is that the goal of faster reads and better tag performance is forthcoming. As is greater interoperability for tags and readers—“anyone’s tags will work with anyone’s readers,” said Texas Instrument’s director for UHF-retail supply chain, Tony Sabetti, adding “anywhere in the world—that’s the vision.”
Gen 2 and increasing tag volumes are steps toward the elusive goal of the 10¢ or less tag. RFID tag and reader vendor Alien Technology forecasts that in 2006 its Gen 2 Class 1 tags will be 7¢ each before label converting costs are added.
