Posted on 10/10/2003 8:43:19 AM PDT by NotQuiteCricket
Next month, Wal-Mart Stores Inc. is expected to bring its top suppliers to its headquarters to fill in some details about its mandate that they implement radio-frequency identification tags on cases and pallets destined for the retailer's stores by January 2005.
Some of the questions suppliers hope will be answered are which of Wal-Mart's distribution centers will be ready to accept RFID shipments; whether Wal-Mart will require suppliers to subscribe to the Electronic Product Code Registry, which assigns EPC numbers to identify a manufacturer, product, and serial number; and whether compliance will include support of new communications protocols.
By some accounts, Wal-Mart has handed down the bulk of the details. "About 90% has been defined," says Paul Crist, VP of global sales and marketing for Provia Software Inc., a maker of supply-chain software that includes tools to help companies meet Wal-Mart's edict. Wal-Mart wants suppliers "to be designing systems late this year, early next year, piloting them by second quarter, and then ramping up in the fourth quarter in selected data centers," says Patrick Sweeney, CEO of Odin Technologies Inc., which also offers software to help companies participate in the Wal-Mart initiative.
"When it comes to process flow, it's pretty clear what we need to do," says Simon Ellis, supply-chain futurist at Unilever Group. Like Wal-Mart, Unilever is a member of the Auto-ID Center, a partnership of businesses and research universities that has been defining RFID standards. "The only question I still have is where within Wal-Mart's network they want to start this--which distribution centers," Ellis says. For instance, if Wal-Mart decides to start receiving tagged pallets in the Northeast, Ellis would start at Unilever's Northeast warehouse rather than its Southwest warehouse.
That's not a huge concern, he says, but others say lack of some information could jeopardize suppliers' ability to meet the deadline. A recent AMR Research report questions whether compliance includes supply-chain communication and automation, which could be the difference between a $5 million and $23 million price tag. If Wal-Mart requires only that suppliers implement tags and readers, the cost could be $5 million to $10 million.
It's also unclear if companies will need to subscribe to the Electronic Product Code Registry, which can cost up to $200,000. And Wal-Mart hasn't specified if it will require suppliers to support the Object Name Service or Physical Markup Language protocols or let them continue using the established Abstract Syntax Notation protocol for communicating and finding electronic product codes among computers.
A Wal-Mart spokesman says the November meeting will address all concerns suppliers might have, and that the 2005 deadline is still on. Wal-Mart wants all of its suppliers to be ready for RFID in 2006, he says, and will itself have RFID readers in all its distribution centers as well as in its more than 2,900 stores by the 2005 deadline. "It's tough," he says, but "we're up to it."
Procter & Gamble Co. says it will begin using RFID with Wal-Mart in major markets by next spring, and Unilever says it, too, will meet the deadline.
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