May 20, 2004, 12:00 AM

RFID doesn’t require big IT staffs, Target and Wal-Mart say

Senior executives from rivals Target and Wal-Mart shared a Retail Systems stage to advise other merchants about the ease of getting started with RFID programs. “It’s an easy program to get people involved in,” Target CIO Paul Singer said.

Kurt Peters

Executive Editor

In an unusual display of cooperation, senior executives from rivals Target Corp. and Wal-Mart Stores Inc. shared a Retail Systems Conference stage this week to advise other merchants about the ease as well as the importance of getting started with RFID programs. “It’s an easy program to get people involved in,” Target senior vice president and CIO Paul Singer said.

His counterpart at Wal-Mart, executive vice president and CIO Linda Dillman, noted that Wal-Mart runs its RFID program with a staff of five dedicated employees. “They’re a core team of five people excited about the technology,” she said. Singer and Dillman joined representatives from consumer products goods manufacturer Kimberly-Clark Corp. and Hewlett-Packard Co. in a panel discussion before an audience of more than 1,000 retailers, suppliers and technology vendors.

“If the largest retailer in the world can operate an RFID program with five people, then you can too, even if it’s just with one dedicated person,” Singer said, adding that Target maintains an RFID team similar in size to Wal-Mart’s. RFID, or radio frequency identification, uses radio frequency technology in a system of RFID tags and readers to track shipments throughout a supply chain. The system is designed to transmit shipment data over the web to managers at retailers and suppliers, who can use it to better plan for disruptions and avoid being out of stock in stores.

The members of the panel cautioned, however, that it’s best to roll out RFID plans with a limited number of near-term goals. Wal-Mart decided to narrow its initial focus down to improving the way it works with suppliers to track and move cases and pallets through its supply chain, Dillman said.

“You have to keep RFID in proper scale to avoid scope creep,” said Mike O’Shea, director of corporate Auto ID/RFID strategies and technology at Kimberly-Clark. “There’s a tendency among RFID users to bite off more than they can chew, to fix all the problems in their supply chain with RFID.”

The most important goal of RFID, Dillman said, is getting better visibility of shipments to avoid being out of stock of items that shoppers want to purchase. One of the first steps toward reaching that goal, she added, is using RFID to give in-store managers real-time looks at what they have in their own warehouses. “We want to know what is in the back of our stores,” she said.

Singer cautioned, however, that even RFID will not be a magic wand but will require its users to carefully monitor its data and implement effective delivery and merchandising plans. Even with the extensive improvements inventory management has implemented over the past several years, retailers still struggle with out-of-stock problems. “It’s still alarming to me the amount of time we’re out of stock,” he said.

 

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