RFID ambitions the retail giant sends a strong signal that their plans
for RFID is alive and well. To date Wal-Mart has been slow to penalize
suppliers that were tardy implementing RFID but that has all changed.
For the first time a division of Wal-Mart, Sam’s Club, will required
its suppliers to apply RFID tags to pallets by Jan. 31 or face a
service fee for every pallet shipped without a pallet tag. The fee
will be $2 per pallet starting Feb. 1 and increasing to $3/pallet on
Jan 1, 2009.Make no mistake that Wal-Mart has done exactly what it wanted to accomplish when it announce its RFID mandate. At the time of its announcement RFID Technology was immature and very expensive. Suppliers were upset and for a good reason. 100% read accuracy was very difficult to attain and the RFID passive tags were $.70/ea. Wal-Mart knew that they needed to accelerate the development of the next generation of RFID hardware and create the demand so hardware providers had the economies of scale to quickly drive down RFID tag and RFID reader prices. Fast forward to Jan 2008 and RFID tag prices are around $.10/ea and the Gen2 standard has become widely accepted. 100% pallet & case level readability is easily achievable.
What’s next for the retail giant? Well with RFID tag prices heading lower Wal-Mart is considering just when to push the RFID tagging requirement down to the item level. That decision has already been made at Sam’s Club. They will require suppliers to apply RFID tags at the item level for shipments to the DeSoto DC and related stores by Oct. 31, 2009.
Wal-Mart has executed its RFID grand plan with perfection and has shown why it has the most efficient supply chain in the world.
