Rfid in Walmart Essay

In June 2003 Wal-Mart get-go announced its plan to implement RFID technology in its emerge train by January 2005 this caught mevery of the suppliers unaw bes. Though the plans envisaged compliance from the top 100 suppliers, nigh 129 suppliers jumped into the fray, afraid of being left behind in the race. RFID technology was invented in 1969 and patented in 1973 after thirty long years WalMart has demanded its implementation. Expectations atomic number 18 high, unfortunately RFID technology is still in its infant s tracke. In November 2003, Wal-Mart in one carapace once more asserted its sine qua nons.The following were explicitly spelt out 1. What the EPC (Electronic return Code) would be, 2. What class of chips they would accept, and 3. Which distribution centres would start accepting RFID deliveries. Much has happened since then. To its suppliers, Wal-Mart has spelt the requirement of 96-bit EPC with a Global Trade Identification number, which is an international standard . The notes are judge to operate in ultrahigh frequency spectrum (868 MHz to 956 MHz). The plan is to standardize the categorize 1 Version 2 of the EPC specification RFIDJournal. Com.The EPC global, a joint endanger between Uniform Code Council and EAN (European Article Number) International, is developing this particular standard. This tag testament carry the 96-bit serial publication number and give be field-programmable. This will enable the suppliers to write serial numbers to the tags, when they apply the tags to the products. The EPC-compliant tags in UHF band consists of 1. EPC data format on 2. One of the existing converse protocols, Class1 or Class0 two main the parts chip Note Class0 and Class1 specifications differ. Class0 is a factory programmable tag while Class1 permits the end users to write a serial number on it.They are non interoperable. A multi-protocol reader is required to read some(prenominal) tags. The Class1 Version2 that is being pursued is expect ed to incorporate both specifications of Class0 and Class1. This Version2 will be a glob solelyy accepted protocol. As of now Wal-Mart is already tracking pallets and cases from suppliers coming to one distribution centre. The plan is to flip ones lid to other suppliers soon and roll out the technology regionally crossways the US . By the end of this year, the intention is to track all pallets, and cases of all products from the top 100 US suppliers, and by late 2006, from all US suppliers.Wal-Mart will then begin rolling the technology out internationally. The change magnitude demand has already set Manhattan Associates working on new software package that will allow companies to plug RFID technology to warehouse management system, on all platforms. Wal-Mart dreams of achieving a great RFID enabled, fool proof, error free, transparent supply chain. To this end, RFID readers are being installed at distribution centres and lineages and buying equipment for printing tags. The o utlay of investments in new technology every year will be covered in the normal capital budgetWhy WalMart is adopting RFID? The practical application of RFID deeper into sell operations than case or pallet- direct tracking is not unfeignedly an Asset Protection driven proposal. The ability to better track SKU level items, smooth out merchandise flow, and prevent out-of-stocks while eliminating non-productive, avail-draining overstock situations is a main tenant of retail. The better Walmart, or anyone passel get at doing that, the much control they have in their merchandise investment and the more profit can be squeezed from each dollar invested.With improved profit to investment ratios along with cost-controlling measures such as improved productivity for computer storage level associates, a company can use the gain to au revoir on in savings to their clients, which is the real secret to success. Asset protective cover will benefit from the improved operations as well. Shr ink is unac numbered for invested dollars. A retailer invests in merchandise to sell and somewhere along the jumper lead from factory to store it is lost, somemagazines physically, sometimes in the handling and history process.The ability to quickly verify actual quantities of items in a store not only enables the retailer to replenish the stock at the skilful rate of sale, it alike eliminates countless hours of searching for the products in backrooms, overstock cuffes, risers and any number of other places merchandise finds to hide in a store. When the count is exact as the product is received, matches the invoice with precision, and is then accurately bring in until it is sold, shrink can theoretically become just a gravely memory. There is still theft to consider, however RFID moroseers some improvements in that discover as well.The key is real-time neckledge of the status of key merchandise. Associates can react to missing one item, instead of hundreds or thousands of dollars worth, before they know in that respect is a problem. Concerns have been expressed over hiding and tags could be used to identify concealed items, but that is not the path to success. If you clutches to react to a theft, you still must(prenominal) deal with the situation and there are several pitfalls in apprehending shoplifters and processing internal theft situations. So the bottom line is that it is about immediately identifying loss and taking active measures to prevent further loss.To those expressing concern over the proliferation of technology like RFID in retail, the challenge is to keep the concerns on a productive level. Retailers are not motivated by big brother-like intentions. They are striving to become as efficient as possible in their operation to shave off every non-productive penny invested. It is how they can beat their competition in set giving the consumer the benefit of lower prices and the shareholders the benefit of improved profits. There are r eal concerns relative to unintended consequences of the misuse of technology.Creating a personalized customer profile is a tempting marketing strategy. Imagine knowing exactly what every customer who comes in the doors wants to buy, maybe even before they do. Questions of privacy must be addressed openly and a retailer must make efforts to prevent the misuse of data. This new era is where the victor retail LP leader can make a significant contribution. One day, silver registers may be obsolete. Currency could be exchanged virtually and disposed directly to people through some kind of biometric authorization.The role of the LP professional will look much different when that day arrives. Getting from where we are to that point will be an interesting ride. WalMart and RFID The Test Phase From sign experiences of roll out of EPC in select distribution warehouses and stores, there is reliance that the concept will be a long-term success. Experiments with various tag types and tag p lacements are underway to see how they impact readability on various products in a non-laboratory environment. Goods shipped to the stores with RFID tags are recorded once at their reach .By simply waving the scanner at the boxes they are able to know what is inside without having to open anything. Even before the arrival it is possible to know where everything is, which helps to reduce loss during shipment. The tags are read again before they are brought to the sales floor , no reader is installed at the sales point, though. They are read finally at a box crusher after all the items in the case have been put on the store shelves. Their software monitors the different items sold to the customers and the number of cases brought to the sales floor.This generates the teaching which items will soon be depleted from the shelves? Automatically, almost instantly, a count is generated of items that need to be picked from the backroom to replenish the store shelves. To reduce the amount of time spent at the backroom Wal-Mart has developed a handheld RFID reader. This acts as a kind of Geiger counter that beeps when a worker gets close to the item he or she needs to pick. It is intended to initially provide this in the victor seven stores and then deploy them in rest of the 140 stores in a phased manner during the year.Wal-Mart has also established a retail link extranet with all its suppliers. This enables them to share data from all RFID read points with their suppliers. When a case is brought out to the sales floor, the status reads Q being put on the shelves , when at the trash compactor the status changes to Q on shelf . Thus within 30 minutes the suppliers get updated on the movement and location of their goods. Suppliers are also learning how to match tags with products and where to place tags for optimum readability. This initial experience will keep them ahead of their competitors.