RFID tag 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 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.

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