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Wal-Mart's Faltering RFID Initiative
Posted by
Zonk
on Thu Oct 04, 2007 04:43 PM
from the under-chipped dept.
from the under-chipped dept.
itphobe writes "Baseline magazine has up an in-depth look at Wal-Mart's years-old RFID initiative. Things apparently haven't gone so well for the retail giant. 'The lack of any obvious concrete gains has raised questions as to whether Wal-Mart should delay or freeze its RFID plans. For now, however, Wal-Mart says it will stay the course ... By January 2006 the company hoped to have as many as 12 of its roughly 130 distribution centers fully outfitted with RFID. That effort stalled at just five distribution centers. Instead, the company is now focusing on implementing RFID in stores fed by those five distribution centers so it can gain a bigger window into its supply chain.' Overall the article focuses on the original intentions of the RFID project vs. their implementation. It also discusses several of the technical elements required to adapt RFID for the US juggernaut."
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Firehose:Wal-Mart's Faltering RFID Initiative by Anonymous Coward
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Wal-Mart Pushing Suppliers For RFID 35 comments
Weather Storm brings us an InformationWeek article about Wal-Mart's push for suppliers to RFID tag their product shipments. Wal-Mart seems to have lost patience in waiting for its suppliers to adopt the inventory tracking initiative. From InformationWeek:
"The retailer says that beginning Jan. 30, it will charge suppliers a $2 fee for each pallet they ship to its Sam's Club distribution center in Texas that doesn't have an RFID tag. The charge is to cover Sam's Club's cost to affix tags on each pallet, says a Wal-Mart spokesman. The retailer hasn't taken such a strong-arm approach yet with the more than 15,000 suppliers that still haven't complied with its request to tag pallets and cases headed for its Wal-Mart stores. Instead, it seems focused on turning its 700-store Sam's Club warehouse-outlet division into an example of RFID supply chain technology in action, down to requiring item-level RFID in 22 distribution centers by 2010."
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good strategery, Wal-Mart (Score:3, Funny)
Ah, yes, because we all know how well "staying the course" works out.
Re: (Score:3, Insightful)
5 cent tags (Score:5, Interesting)
But the price seems frozen at 10 cents. And that is the cheapest tags in HUGE quantities. For a small business like mine, 20 cents seems to be the current rate.
Re:5 cent tags (Score:4, Insightful)
The reasonable cost-per-tag really depends on what you're tagging. If you're tagging flat panel TVs 20c/tag is perfectly reasonable. If you're doing item-level tagging on tupperware, even 5c/tag is too much. Unfortunately ultra-cheap items where the manufacturer's margins are super tight are the norm in Wal*Mart stores, so for most of them, 10-20c is way too much.
Re:5 cent tags (Score:5, Informative)
Have you ever seen work at a warehouse, or at the back of many retail stores? The number of mis-scans, duplicates and such can be pretty significant. Companies account for this by doing physical inventories, which have a substantial labor cost. And those physicals end up disagreeing with sanity check recounts by up to 2%! In a store that has a significant cost per item, a 5 cent tag would be a cheap price to pay to get rid of most of the physical inventory costs and increase the efficiency of inventory control. At $20c, it eats into margins too much for most.
Intimate Walmart/RFID info (Score:2, Interesting)
Re: (Score:3, Funny)
Re: (Score:3, Informative)
Re: (Score:3, Funny)
Re:Intimate Walmart/RFID info (Score:5, Insightful)
And lets not even talk, much anyhow, about a pallet full of cans of soup. RFID visibility is not good amongst cans. If its supposed to always be on a visible side, how do you target the one in the middle? What about mis-stacking with RFIDS hidden? Besides cans provide an example of economics. I understand that Wal Mart pays something on the order of six cents per soup can. If RFID is ten cents. Do you want to "pay" more than a can of soup, 1/24 of your cost for visibility. Perhaps not when profits are measured to much smaller decimal points.
Good luck,
J
Re:Intimate Walmart/RFID info (Score:5, Informative)
That's why the industry wants a multiple-nines read rate on tags. Missing a tag is a big deal. On some items (like a pallet of bikes) getting 100% almost every time is easy (a bike in a box is mostly air). On other items (like cans of soup) it's extremely hard. Wal*Mart is unlikely to demand that individual soup cans get tagged, but they might want cases tagged, but even then it's hard because it's soup -- mostly metal and water, two things that don't play well with RFID tags.
One thing to remember is that these companies aren't run by complete idiots. If they pay 6c per can of soup they won't demand that every can be tagged. They also won't trust that the number of RFID tags they've scanned is the number of items shipped. Instead they'll have a shipping manifest that says "300 widgets". If the RFID scanner says it found 300 individual RFID tags, then they can be pretty confident that they read all the tags and that their order is complete. If instead it says 293 they'll know they either have to try to scan it a few more times, or if that doesn't work they'll have to disassemble the pallet and figure out if there really are only 293 widgets or if there are 7 that aren't getting read. If the system works well enough that most of the time it says 300 widgets when there really are 300 widgets it could be useful, but 300 widgets == 300 tags == $30-$60, which is a lot, depending on what's actually on the pallet.
Watch out for falling FAIL. (Score:2)
So they slipped a little (Score:2)
RFID and Loss Prevention (Score:3, Interesting)
Convenient stores could make it really easy to find products with a proper RFID search system with kiosks in the store. That would work out in a way that could make it really easy for customers to find stuff. However the problem comes down in that you end up becoming too efficient... when you have a sale and you are retail giant you want the sale to bring in customers to buy the higher GM products... not the sale items! That loses you money when customers can actually FIND the stuff that is CHEAP. Far better to keep it the way it is there... so that doesn't work out and store giants like Wal-Mart are backpeddling.
The loss prevention use of RFID is great but theives can bypass any form of security and disgruntled employees don't usually care if someone is stealing 100% of the time... 70% of the time the employee will let even a theif leave the store when the excuse the theif gives COULD make sense... so it's lose/lose there... even with sophisticated loss prevention measures that would use RFID to track products leaving the store. Customers can come up with a valid-seeming excuse to get past so called last-chance methods for loss prevention like receipt checker employees. "Oh I bought this last week and I had a question about it..."
The best way to have loss prevention it seems is to move to a web or an ORDER ONLY system like you see at stores where employees bring out the products to the customer -- but even those types of stores suffer from theft. Customer can't get to products, customer can't steal em!!
RFID while it sounds good, and while it has great potential is stuck being a lose/lose... from the profit standpoint. Customers would profit from it, but they also stand to lose out... so w/e
Re: (Score:3, Informative)
tight ships have less to gain (Score:4, Insightful)
But we're talking wal-mart.
They already were running a really tight ship, keeping every possible cost down, tracking everything with keyboarding and bar codes already, plus any wasted time tracking pallets was mostly blue-vest people at $8 an hour.
At some point, the waste and inefficiency just isn't there anymore and spending billions of dollars to save millions is pure management stupidity.
there's nothing wrong with the ship, it's the captain that's messed up.
Out in 30 seconds? I don't think so... (Score:3, Insightful)
I'm not quite sure how RFID is supposed to make the checkout person bag my items any faster. Or is that not the slowest part of the whole process? It's not like we're losing a whole lot of time waiting for barcodes to be scanned, unless you're buying pears and they have to key it in manually.
On an unrelated rant, I'm pretty sure the idea with utopia is that you can't get there. And I can think of a lot better utopia than a Wal-Mart checkout line.
Re:Out in 30 seconds? I don't think so... (Score:4, Interesting)
The longest part about checking out for me is waiting for some luddite to stop futzing with writing a check and use a check card or cash instead. The second longest part is another luddite standing in the "self-check out" that doesn't understand what to do, especially when they have bulk items or fruits and vegetables that need to be weighed.
RFID isn't going to solve either of those problems.
Re: (Score:3, Insightful)
Re:Out in 30 seconds? I don't think so... (Score:4, Informative)
So either you don't bag at all(bring in your own) or bagging will be quicker because it can be done without the scanning piece of the process.
It's Wal-marts utopia, not yours. However you are right about never achieving utopia, except for fleeting moments. contrary to what that spokesman said, the will never reach there utopia because there will be the elderly, the disabled, the newbs, the noobs, and returns. The management at Wal-mart knows this.
Re: (Score:3, Interesting)
Re:Out in 30 seconds? I don't think so... (Score:4, Insightful)
2. That's why you get a receipt on your way out.
- Alaska Jack
Wait wait wait a second here... (Score:5, Funny)
After reading that, I became extremely paranoid and started wrapping myself in tinfoil every day. But then I realized the RFID could be in the tinfoil itself. So I rewrapped that tinfoil in other tinfoil. They told me I could kill it with microwaves, so I took the tinfoil I was wrapping the other tinfoil in and put that in the microwave. That didn't really work out to well. Now I've been walking around looking like some 1950's space alien comfortable that my previous purchases of BVDs would be safely hidden beneath my shorts and you're telling me that these guys can't even read an RFID out in the open?
You guys are just big jerks you know that?
Weren't failure rates the biggest problem? (Score:3, Interesting)
Re:Fun with RFID (Score:5, Funny)
The undergrad library at $Canadian_University had magnetic strips in all the books, and exit turnstiles under the mag strip scanners. If the scanner detected a strip it locked the turnstile and set off an alarm.
I peel a strip out of a book and slip it into my buddy's backpack. I distract him a bit as it get close to class time and then say "Holy kerap, you're going to be late for your lab" Buddy takes off for the exit at a dead run.
BEEEP...CLICK...WHAM! The scanner triggers, the alarm goes off, and the turnstile locks, all at the same moment. Buddy hits it at full speed, folds in half at the hips and then flies through the air like something from an ESPN highlight clip.
I snuck the strip out of his bag at our next class, and he never did figure out what happened.