NEW YORK -- Radio frequency identification technology is starting to show tangible benefits, according to the CIO of Wal-Mart and leading European retailers.
The product identification and tracking technology is helping to keep Wal-Mart shelves stocked, and curbing loss of retail products that are lost as they travel through supply chains.
"Start testing RFID," Dillman said. "Don't wait."
Bentonville, AR-based Wal-Mart Stores, Inc. this month will have100 suppliers in compliance with the massive retailer's RFID requirements.
Wal-Mart has already identified a two-day gap in the supply chain of one of its suppliers thanks to RFID technology, Dillman said.
It also discovered that, on any given Saturday, one of twelve products is out of stock, without employees knowing.
Now employees track down missing products using a hand held device that beeps with increasing frequency as they gets closer to the desired product.
By the close of January, the company will have RFID deployed in 104 Wal-Mart stores, 36 Sam's Club outlets, and three distribution centers.Dillman's advice is to take small steps toward RFID "This is going to take a long time," she said. "It is hard."
How it works
Colin Cobain, IT director for Tesco PLC, one of the UK's largest supermarket chains, said his organization is using RFID to track high-priced goods.
The company is using RFID in one distribution center and 14 stores. Here's how it works: At the distribution center, items are set in a tray, which is then tagged with a RFID chip. The trays are then shrink wrapped to a pallet, which is also tagged.
When the pallets arrive at retail outlets, an alarm is triggered if the tray has been altered in any way during transport. The products are locked in a storage room, and workers using PDAs are notified as the shelves need stocking. It is a limited trial that is addressing a single problem—the disappearance of pricey products.
"You can't do everything today," said Cobain. "It's about how you can change business practice."
Doug Buchanan, a regional manager for Westchester, Penn.-based QVC Outlet, a division of QVC, Inc. said that QVC is likely to use RFID at some point. Buchanan, who attended the retail event to learn more about RFID results, said he is concerned about lost or stolen merchandise.
"Right now there is just bad tracking [of products]" Buchanan said.
San Francisco-based Gap, Inc. is also piloting RFID said conference attendee Wayne Riley, director of store operations information technology. RFID may help it to better keep products on the store shelf. "RFID can help us know where inventory is and keep track of it so that we don't lose out on sales," he said.
But not everyone is ready for RFID. Heli Uusisuo, sales director for SOK Corporation, a Helsinki-based retailer, said the company is aware of RFID, but it is not a big priority. "We will look at it in the future," she said. "Not yet."