RFID tag and equipment shortage?

If Wal-Mart had insisted that all its top 100 suppliers ship all products into the Texas distribution centers with RFID tags on boxes and pallets, a shortage of RFID tags could ensue.

That was the conclusion of consultant ARC Advisory Group. However, ARC found that many of Wal-Mart's top suppliers will ship only a limited number of products with RFID tags.

"Thus, the prospective shortage may not be as severe as feared," says Steve Banker, ARC's supply chain management service director. "Rather than a firm deadline for all suppliers, Wal-Mart has engaged in a series of ad-hoc negotiations, and they have proved willing to listen to suppliers [that] had valid reasons for moving at a more deliberate pace."

However, some RFID suppliers, particularly Alien Technology, said they are sold out of Class 1 (rewritable) labels and that customers should expect a three-month delay. Other producers report a backlog of orders, and some potential customers are concerned that shortages will drive up costs.

RFID equipment shortage, too?

Tag availability isn’t the only challenge. RFID Antenna has also learned from one key RFID “smart label” applicator vendor that an equipment shortage should also be expected. We spoke in mid-October with the vendor’s RFID specialist, who has been involved with a number of the Wal-Mart top 100 RFID company installations and was aware of others. He said that a number of the top 100 had not yet made any equipment purchases for RFID deployment.

“They are still figuring out what they’ll be doing,” he says, “but they’ll run into the fact that there simply won’t be equipment for them in time for the January 1 [Wal-Mart] deadline,” he says. With a 12-week lead time, vendors simply won’t have the time available for delivery when they receive a purchase order, he explained.-AO, RL

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