A recent article by the Wall Street Journal reports that Wal-Mart's push for RFID is showing signs of "fizzling."
Long known as a pioneer in developing ultra-efficient, cost conscious distribution practices, Wal-Mart has now begun requiring its suppliers to use RFID tags as a way to further streamline processes. However, as the WSJ reports, "Tests using the tags aren't showing any savings, and suppliers forced to invest in the relatively expensive technology are grumbling."
Responding to the report, Robert A. Hankin, President of HIBCC stated, "Although unfortunate, these findings are not surprising. Wal-Mart's experience is consistent with the concerns HIBCC has expressed, most recently in our 2006 advisory to our industry. While RFID may prove highly practical for certain applications, it should not be viewed as a generic replacement for current technology. These findings further underscore the point that RFID is not a driver for healthcare to adopt the retail model."
The promise of RFID technology is its capability of transmitting via radio waves vast amounts of product data from the chip located inside the tag to electronic readers. When successfully implemented, this allows individual products to be scanned remotely and in bulk quantities. This process provides an advantage over traditional bar codes which require the more labor intensive practice of a manual, one-to-one scan.
The retail processes for RFID, including the Wal-Mart pilot, have thus far focused on the EPCglobal approach. However, as other industries look at this emerging technology, many have chosen to pursue alternative strategies. In 2006, the Joint Automotive Industry (JAI), a collaborative of the global automotive industry, announced that it would "not recommend usage of EPC" and would "work toward open system standards."
The WSJ notes that Wal-Mart continues "pushing" RFID technology as means to increase efficiency and save money for both its manufacturers and itself. As the search for these improved processes continues, "suppliers are saying RFID isn't it."
To view the full text of the Wall Street Journal article, please visit: www.wsj.com. The article was originally published February 15, 2007 and was written by Gary McWilliams.
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