In its second-largest acquisition, Amazon buys the company for $970 million.
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Store deliveries often come in the middle of the day during the crunch of sales activity, making it difficult for managers to quickly get new hot-selling items onto shelves while also properly checking in products on the loading dock, says Hunter Harris, vice president of retail market development for Yantra. “Many times store managers will rush to get the best-selling incoming products on the store shelves, then check later for mistakes made in checking products in at the loading dock that disrupt inventory records,” he says. But with RFID quickly recording products and updating back-end inventory records, store managers will have the best of both worlds of displaying products quickly as well as avoiding errors in inventory systems, he says.
Langford and others say the retailing concepts that RFID addresses are not hard for managers and employees to learn, since RFID presents them the same kind of information on web pages and electronic alerts that they would otherwise have to gather from different points along the supply chain by scrambling with phone calls, faxes and e-mail. “Training in using RFID technology is more of a briefing,” Langford says, adding that Wal-Mart will schedule RFID briefings along with routine training procedures for other store systems. The Retail Industry Leaders Association (formerly the International Mass Retail Association), in conjunction with RFID advisory firm ePC Group and Sun Microsystems, has developed a web-based RFID training course that advises retail managers on the necessary infrastructure and procedures required by RFID, as well as the technology’s capabilities and limitations. The course takes about 50 minutes and costs $100.
“The whole idea of RFID is to minimize the work patterns of associates so they can go about their everyday jobs,” Langford says “This will enable us to deliver much better service, and have products in stock when customers visit our stores. And as the technology matures and comes along with more sophisticated tags, that will just add on top of that.”
No. 1 priority
As more retailers get involved with RFID and see upfront how it works in pilot projects, the technology’s acceptance will grow among a broader number of companies with plans to implement it, experts say. “Some people have the view that RFID is rocket science and will be difficult to implement,” says Higgins of BearingPoint. “But once they get involved at the root level, some of the mystique goes away and people think it’s doable.”
In fact, some think that not only is it doable, it must be done. Mullen says he’s made RFID the No. 1 priority among technology projects at Birds Eye. “I have embraced this technology because it will give us a competitive edge,” he says. “I believe the ROI on this will be there in spades.” l
Tagging the future with RFID
Development of RFID technology will also produce tags capable of doing an increasing number of useful things, says Simon Langford, Wal-Mart Stores Inc.’s RFID strategy manager, adding that customizable tags will be able to monitor and emit detailed information on the shipment record of a tagged product. A shipment of frozen meat, for example, is likely to carry a battery-attached tag that would be programmed to wake up every 15 minutes to record the product’s temperature.
“Today, when we get a trailer of frozen food, we may know that the trailer itself maintained a chill compliance, but we don’t know if a case of items had been left in the sun while being transferred from another trailer,” Langford says. “With new temperature-taking tags, we’ll be able to read them to see if products ever went up in degrees of temperature.” Such sophisticated tags could be costly, perhaps up to $1.50 per tag, but worth it to track highly valuable goods or, in the case of frozen foods, to assure that goods maintain quality levels and avoid liability for damaged goods.
RFID tags are available in two basic types: Class 0, which operate as pre-programmed read-only instruments that can only be used for pre-assigned products, and Class 1, which users can program with information for use with any of a wide range of products. A third type of tag, Class 1 Generation 2, which is expected to be available next year, will accommodate all radio frequencies as well as coding for international shipments under standards being developed by the Uniform Code Council and its European counterpart, EAN International.
In Wal-Mart’s RFID pilot projects, where it has worked with a limited number of suppliers, tags and readers for the most part have worked well together, Langford says. But that could change as large numbers of suppliers, including foreign, begin to participate. “Interoperability of tags and readers hasn’t been a problem in pilots, but when you bring on more than 100 manufacturers, interoperability will be an issue,” says Mike O’Shea, director of corporate auto-ID RFID strategies and technology for consumer products maker Kimberly-Clark Corp. Fortunately, he adds, the development of RFID standards on more new-generation tags is expected to coincide with the timing for broader rollouts of permanent RFID projects next year.